Carpet float stories nudge Asda higher

MARKET REPORT The FT-SE 100 index slipped 3 points to 3,038.2 and but the FT-SE 250 index rose 2.3 to 3,396.4. Turnover was 658.7 million shares with 21,879 bargains. Government stocks were easier.
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Asda, the supermarket chain, captured the stock market's imagination as stories strengthened that it was on the verge of floating its Allied Carpets associate.

The shares, which have edged ahead this week, rose a further 1p to 69p, nudging their 12-month high.

Allied, once a quoted company, was merged with Carpetland Carpet Centres two years ago. Asda retained a 40 per cent interest, reserving the right to increase its holding to 50 per cent if the group was floated or sold.

Carpetland was formed in 1991 to buy outlets from the bankrupt Lowndes Queensway chain. It was making profits at the time of the merger, whereas Allied was in the red. The merger created the UK's biggest carpet retailer with more than 200 outlets.

According to the more optimistic souls, the carpet retailer would enjoy a stock market valuation of more than £200m. But even if they are right, they will apparently have to wait a while. For although Allied is aiming for a floatation it is unlikely to arrive on the market before the autumn and, according to sources close to the company, may wait until the spring of next year.

The rest of the market had a lacklustre session with the FT-SE 100 index slipping 3 points to 3,038.2. Although encouraged by the Government's narrow Euro vote victory, it was unsettled by the failure of the long signalled takeover bid for Yorkshire Electric to appear.

The is a strong body of opinion expecting Yorkshire to collect a bid from any one of a string of would-be predators, ranging from Hanson to an unidentified French group.

Still, if the market registered disappointment, Yorkshire took the rebuff in good heart, with the shares nudging ahead 3p to 848p. Other electricities were firm, although the generators turned in another unimpressive display.

Wellcome had a busy session as stories that the elusive white knight had at last been spotted buzzed around. It was not one knight, but two, in the form of a joint counter-bid from Bayer, the German chemicals group, and Zeneca, once part of Imperial Chemical Industries.

Bayer quickly denied any involvement but Zeneca refused to dismiss the stories.

The excitement lifted Wellcome 7p to 1,035p; Zeneca, with profits on display, slipped 13p to 867p and bidder Glaxo put on 11p to 663p.

Despite Zeneca's reticence the market was clearly unconvinced by the possibility of an Anglo-German counter-strike. But some nurse a nagging suspicion that Wellcome may yet be able to produce a champion that will at least force Glaxo to pay more.

There was also talk of a counter-bid for AAH, currently resisting a £377m offer from Gehe of Germany. The shares rose 4p to 434. Fisons duly produced its signalled scientific instruments disposal, lifting the shares 17p to 146p.

On the brewing pitch, Whitbread dipped 4p to 538p. Stories circulated after the market had closed that the group had dropped out of the bidding for Courage, the UK's second largest brewer which has been put on the market by its parent, Foster's Brewing of Australia. The Whitbread departure leaves the field clear for Scottish & Newcastle, unchanged at 497p.

Tate & Lyle, the sugar group, fell 7.5p to 427.5p as NatWest Securities turned cautious. The securities house is worried about the impact of its US operations on next year's profits.

Financials had another attack of the Baring jitters, with some worrying about the possible ramifications of the merchant banker's collapse. Hambros fell 5.5p to 216.5p; Kleinwort Benson 19p to 581p and SG Warburg 15p to 683p.

There is growing intrigue about the future of the quoted Baring investment trusts. For example, Baring Tribune stuck at 303p against an asset value of 365p. It is said that at least 25 per cent of its capital is held by Baring employees, most of whom must be willing sellers.

The trust, therefore, looks particularly vulnerable. In the jungle which the once staid world of investment trusts has become it would be surprising if it - and the other Baring vehicles - had not already caught the attention of one of the more aggressive investment trust groups or entrepreneurs looking for a quoted vehicle.

Lonrho rose 1.5p to 148p following the latest boardroom upset with the ousting of Tiny Rowland.

Hard pressed Benson Crisps firmed 2p to 18p as it at last found a new finance director, Neil Hopkins-Coman.

But OMI International, the electro-hydraulics group, crashed 12.5p to 15.5p on the sudden departure of chairman and chief executive Gil Williams. A cautious trading statement added to the gloom.

British Data Management was another casualty, slumping from 193p to 142p. A sharp decline in interim profits did the damage.

Buckingham International, the stricken hotel group, halved to 0.75p. The ruling Jivraj family is taking the company out of its quoted misery with a bid of 2.4p for every 10 shares and 0.1p for every 10 subscription shares. Six years ago the shares nudged 100p.

Newcomer Colleagues, a direct marketing group, made an impressive debut. Placed at 115p the shares closed at 126p.

Properties were flat. British Land, raising £210.7m through an open offer and placing at 352p, fell 3p to 365p. Countryside Properties, a builder, lost 4p to 94p after its chairman, Alan Cherry, said interim profits might be lower.

Latest to find its way into the takeover frame is APV, the troubled engineering group. The shares moved forward 4.5p to 67p in occasionally brisk trading. In January it was forced into a restructuring exercise, costing £32.5m.

Hectic late trading in Alvis, with Seaq putting volume at more than 3.5 million shares and the price gaining 9.5p to 55.5p. An encouraging trading statement caused the excitement. The defence equipment group said orders for the year to January, excluding its Singapore associate, amounted to £145m. Last year it made profits of £5.83m.

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