Bid rumours turn Manchester United shares sky blue; MARKET REPORT

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Manchester United, preparing for this morning's top-of-the-table clash at Old Trafford with arch-rivals Liverpool, proved the old adage that football is a funny old game. Chief executive Martin Edwards was quoted as saying that the club was a likely bid target and that any proposals would be given serious consideration if offers started at over pounds 400m.

The reports drove United's shares up 61p to a record high of 513.5p, valuing the club at over pounds 318m.

Media and leisure group Granada, brewer Whitbread and Lord Hollick's United News & Media were mentioned as having expressed an interest in buying United, but all three companies denied the story.

Whitbread, brewer of Boddington's, which is marketed as the Cream of Manchester, downed the rumour in one. "The report is complete rubbish. We would love to buy the club but we have as many beer drinkers in Liverpool, Newcastle and Chelsea."

Then, in a highly unusual move, United issued a Stock Exchange statement saying the board was not aware of any bid approaches - this from the same company that conspicuously failed to inform the market when it received an actual pounds 300m bid from video group VCI in May, which coincided with a sharp rise in United's share price.

Yesterday's action on the Manchester United pitch spurred the terraces into life. Private investors piled into the shares while institutions were reported to be rushing for the exits, banking profits on the stock that has climbed from 200p since Christmas.

The blues - chips that is - also enjoyed a high scoring session. Leading shares closed at their high for the day after Wall Street surged 50 points on the back of positive sentiment about the US interest rate outlook after benign retail sales data. The FTSE 100 index ended the week at 4028.1, up 33.4 and just seven points shy of another all-time closing high.

Further US buying pushed satellite broadcaster BSkyB 265p higher at 650p, a new record. Technical analysts also noted that the shares had recently broken through chart resistance at 600p.

BSkyB is also a very tightly held stock. Just four shareholders speak for 72 per cent of the shares, so it does not take many traders to be caught short to squeeze the price higher.

Rolls-Royce roared ahead 7p to 254.5p on hefty volumes of 11.4 million after US plane maker Boeing said the Federal Aviation Administration had granted initial approval to its 777 airliners powered by Rolls-Royce's Trent 800 engines. A buy note from SBC Warburg also helped.

The retail sector was generally buoyant after a survey from the CBI showing a rise in September retail sales, albeit at a slower pace than in August. However J Sainsbury remained shunned ahead of interim results at the end of the month. BZW added to the recent clutch of negative broker comment by issuing a sell note, while switching into Tesco, 4p up at 317p, was also noted.

With only 73 shopping days left to Christmas, brokers' thoughts are turning to the general retail sector, which has underperformed the stock market by 4 per cent since July. NatWest thinks this has been overdone and highlighted several shares, notably Dixons, which rose 23p to 567p, making it the best FTSE 100 performer of the day.

Enterprise Oil firmed 18.5p to 587.5p as analysts returned from a trip to see its Italian operations and Robert Fleming upgraded its net asset value from 600p to 800p.

Out-of-favour Matthew Clark had an eventful session. Shares in the cider group, which recently issued a profits warning citing the adverse impact of "alcopops" on its Babycham, K and Diamond brands, hit a six-year low of 267.5p in early trade. Overnight activity in the options market was blamed. But nerves were soothed after the Stock Exchange said publication of a block trade of 1.95 million shares at 310p transacted on 3 October should not have been delayed until two days ago. The shares ended 4.5p down at 309.5p.

Shares in Alvis rose 11.5p to 131p. Traders noted a number of large buy orders from Europe on hopes that Alvis is close to securing a significant contract with the Ministry of Defence.

Speculation continued to swirl around exhibitions group Blenheim, 1.5p higher at 484p. One story suggested that Anglo-Dutch publisher Reed-Elsevier was getting cold feet about a full bid. Another suggested rival Dutch publisher VNU, which picked up a near-15 per cent stake at 500p in a recent "dawn raid" would re-enter the market next week and buy more shares.