Bid-happy investors bank on takeover at Schroders

MARKET REPORT

Schroders, the family controlled merchant bank, outpaced the rest of the stock market. Its voting shares soared nearly 7 per cent to 1,465p and its non-voters just over 6 per cent to 1,135p as the usual array of takeover bid stories swirled around.

With Barings, Kleinwort Benson and SG Warburg falling victims to overseas strikes the remaining independent City merchant banks have acquired a rarity value.

Of the four leading "gentlemanly, honourable, blue-blooded British merchant banks" only Hambros and Schroders have market roles; Robert Fleming and NM Rothschild have retained unquoted status.

Hambros and Schroders suffer every so often from bouts of market speculation. Last week the vulnerability of Hambros was underlined by the appearance on its share register of Regent Pacific, an aggressive Far Eastern fund management group.

Schroders has the protection of a family shareholding hovering just below 50 per cent. Despite the recurring flurries, the more considered market view is that the family is unlikely to be persuaded, in the present climate, to sell.

Other possibilities which enthral the market include enfranchisement of the non-voting shares and a suspicion the group will embark on the takeover trail; blue-blooded stockbroker Cazenove is one name often in the frame.

Interim figures are due tomorrow. They are not expected to be far removed from last year's pounds 85.6m. For the year, around pounds 197m, a mere pounds 1.6m increase, is expected.

One of the more bizarre theories behind the share surge was that Schroders is offering such fancy pay and incentive packages to recruit staff that it must be performing far more successfully than some of its followers suspect.

Head of equities is Philip Augar, ex-NatWest Securities. He has made a number of high-profile captures, some from his former house, as the group bids to rebuild its equity arm. His latest recruit, leading equity strategist Paul Walton, is arriving from Goldman Sachs.

The market regained some of Tuesday's fall with the FT-SE 100 index improving 16.8 points to 3,872.7.

Food retailers went south as another of those price war stories went the rounds. Tesco said it was cutting the price of 600 lines. Bill Myers at stockbroker Williams de Broe said: "Although Tesco's move is fairly innocuous the mere fact it is cutting prices won't do sector prices any good".

Tesco fell 9p to 291p; Asda 4.25p to 106p; Safeway 9.5p to 323p and J Sainsbury 8p to 376.5p.

On the cash and carry front, Booker jumped 22.5p to 383p on its surprise takeover bid for Nurdin & Peacock, up 68.5p to 200.5p.

Healthcare group Smith & Nephew added 4.75p to 203.5p allegedly on US buying; the suspicion the US giant, Johnson & Johnson, is keen to strike is never far below the surface. More contracts for Rolls-Royce lifted the shares 6.5p to 230p.

Vodafone, the mobile telephone group, was hit by rumours of more intense competition and talk that NatWest had adopted a more cautious stance. The shares tumbled 15.5p to 223.5p. Maid, the on-line information group, enjoyed a late run with prices of up to 322p recorded. The official close of trading mid-price was 310p.

There is persistent talk of corporate action with Reuters said to be eyeing the group. Merrill Lynch likes the shares. "Maid is on track to become another important UK-based media company in the tradition of Reuters and Reed," it says. A pounds 5.1m loss is expected this year with a pounds 15m profit next.

Yorkshire-Tyne Tees Television fell 32.5p to 1,177.5p as some took the view that the Granada bid, although seen as inevitable, could be a distant event. United Utilities firmed to 602p following analyst meetings. National Westminster Bank, up 10p to 669.5p, enjoyed Credit Lyonnais Laing support and Prudential got a push from ABN Amro Hoare Govett, gaining 7p to 432p.

Proposed staff cutbacks at Lucas Industries, soon to be LucasVarity, nudged the shares 3p higher to 236p and product rationalisation at Unilever was good for a 16.5p advance to 1,308p.

Tullow Oil was busily traded with the shares, fuelled by stories of oil strikes and takeover bids, up 5.25p to 114.25p. Lasmo has emerged as a possible bidder; it fell 2.5p to 195.5p. Ex-Lands, the property group, was another in the bid frame, gaining 1p at 11.75p in busy trading.

But Blenheim, the exhibition group, remained subdued, easing 3p to 331p.

TAKING STOCK

rTwo former Medeva executives could clear the way for takeover action at Lloyds Chemists. Their company, Medihealth, is bidding for Lloyds's wholesaling depots. With the warehouses unloaded, Gehe and Unichem would be allowed to resume their bids. Lloyds held at 496.5p.

rWilliamson Tea has made a rare move - from the main market to Ofex. More than 84 per cent of its shares are held by two groups. At 1,000p, it is valued at pounds 23m.

rSira Business Services, a cleaning group which made no secret of its acquisitive tendencies when it floated in April, is near to buying two localised cleaners and in talks for a national group. It took over a cleaning business in July. Profits last year were pounds 274,000 and around pounds 1m is likely this year.

Suggested Topics
Start your day with The Independent, sign up for daily news emails
Sport
England's women celebrate after their 3rd place play-off win against Germany
Women's World CupFara Williams converts penalty to secure victory and bronze medals
Arts and Entertainment
Ricardo by Edward Sutcliffe, 2014
artPortraits of LA cricketers from notorious suburb go on display
News
newsHillary Clinton comments on viral Humans of New York photo of gay teenager
Arts and Entertainment
The gang rape scene in the Royal Opera’s production of Gioachino Rossini’s Guillaume Tell has caused huge controversy
music
ebooks
ebooksAn introduction to the ground rules of British democracy
Latest stories from i100
Have you tried new the Independent Digital Edition apps?
Independent Dating
and  

By clicking 'Search' you
are agreeing to our
Terms of Use.

iJobs Job Widget
iJobs Money & Business

Recruitment Genius: Sales Assistant / Buyer

£15000 - £17000 per annum: Recruitment Genius: This company offers a range of ...

Recruitment Genius: Customer Service Advisor

£15000 - £16000 per annum: Recruitment Genius: Customer Service Advisors are r...

SThree: Trainee Recruitment Consultant

£20000 - £25000 per annum + OTE £45K: SThree: SThree were established in 1986....

Recruitment Genius: Compliance Manager

£40000 - £60000 per annum: Recruitment Genius: A Compliance Manager is require...

Day In a Page

The Greek referendum exposes a gaping hole at the heart of the European Union – its distinct lack of any genuine popular legitimacy

Gaping hole at the heart of the European Union

Treatment of Greece has shown up a lack of genuine legitimacy
Number of young homeless in Britain 'more than three times the official figures'

'Everything changed when I went to the hostel'

Number of young homeless people in Britain is 'more than three times the official figures'
Compton Cricket Club

Compton Cricket Club

Portraits of LA cricketers from notorious suburb to be displayed in London
London now the global money-laundering centre for the drug trade, says crime expert

Wlecome to London, drug money-laundering centre for the world

'Mexico is its heart and London is its head'
The Buddhist temple minutes from Centre Court that helps a winner keep on winning

The Buddhist temple minutes from Centre Court

It helps a winner keep on winning
Is this the future of flying: battery-powered planes made of plastic, and without flight decks?

Is this the future of flying?

Battery-powered planes made of plastic, and without flight decks
Isis are barbarians – but the Caliphate is a dream at the heart of all Muslim traditions

Isis are barbarians

but the Caliphate is an ancient Muslim ideal
The Brink's-Mat curse strikes again: three tons of stolen gold that brought only grief

Curse of Brink's Mat strikes again

Death of John 'Goldfinger' Palmer the latest killing related to 1983 heist
Greece debt crisis: 'The ministers talk to us about miracles' – why Greeks are cynical ahead of the bailout referendum

'The ministers talk to us about miracles'

Why Greeks are cynical ahead of the bailout referendum
Call of the wild: How science is learning to decode the way animals communicate

Call of the wild

How science is learning to decode the way animals communicate
Greece debt crisis: What happened to democracy when it’s a case of 'Vote Yes or else'?

'The economic collapse has happened. What is at risk now is democracy...'

If it doesn’t work in Europe, how is it supposed to work in India or the Middle East, asks Robert Fisk
The science of swearing: What lies behind the use of four-letter words?

The science of swearing

What lies behind the use of four-letter words?
The Real Stories of Migrant Britain: Clive fled from Zimbabwe - now it won't have him back

The Real Stories of Migrant Britain

Clive fled from Zimbabwe - now it won’t have him back
Africa on the menu: Three foodie friends want to popularise dishes from the continent

Africa on the menu

Three foodie friends want to popularise dishes from the hot new continent
Donna Karan is stepping down after 30 years - so who will fill the DKNY creator's boots?

Who will fill Donna Karan's boots?

The designer is stepping down as Chief Designer of DKNY after 30 years. Alexander Fury looks back at the career of 'America's Chanel'