Counter-attack puts sparkle in Northern
Saturday 18 February 1995
Electricities brightened a drab stock market as Northern Electric produced a bag of goodies in a desperate attempt to ward off the hostile £1.2bn take-over bid from Trafalgar House.
Northern responded with a 21p gain to 1,112p. dragging others higher. Seeboard, regarded by many as a likely target for a French assault, rose 12p to 464p, but Yorkshire, frequently linked with Hanson, softened a few coppers to 874p.
Yorkshire was apparently unsettled by suggestions Swiss Bank Corporation, advisers to Trafalgar, had sold all or most of its 8 per cent interest. Rumoured buyer was Salomon Brothers, the US securities house.
SBC claims it built its Yorkshire stake in its role as a market-maker. Its presence at Yorkshire was exposed after the electricity group, worried by the mystery share buying, fired off a 212 notice demanding to know the identity of its new, increasingly powerful shareholder.
Citing its market-making role, SBC has also established a share holding in Northern and, it is suspected, in other regional electricity companies.
Trafalgar, down 2p at 67p, has a week to decide whether to increase its offer. The market expects it to stretch to 1,200p. Its present cash offer is 1,048p.
The Northern spark also generated a little interest in National Power and PowerGen; the pair have looked decidedly forlorn since the Government's share sale got underway. NP rose 6.5p to 473.5p and PG 5p to 495p.
Currency worries unsettled the rest of the market. The FT-SE 100 index lost 6.9 points to 3,044.2. The Government split over Europe, worries about Italy and Mexico and even the prospect of a German steel strike were other inhibiting influences.
But the market still managed to produce a few Friday afternoon runarounds - shares tipped for takeover action.
Meggitt, the engineer where aggressive TT Group has put together a 4 per cent interest, gained 4p to 82.5p in brisk trading. Some felt they detected further buying by TT; others looked for a Monday bid.
United Biscuits, which romped ahead on Friday last week, made a spirited attempt to achieve a repeat performance. In the event it had to be content with a 4p gain to 350p.
BAT Industries, the finance and tobacco group, tumbled 9p to 432p after NatWest Securities switched its recommendation from hold to sell. The securities house has indulged in a sum-of-the-parts exercise and concluded BATs operations add up to 388p a share.
Allied Domecq, the drinks group, felt the impact of a Barclays de Zoete Wedd downgrading. The shares hovered at 498p as BZW, worried by the Mexican crisis, lowered next year's estimate by £12m to £720m.
Aero-engine maker Rolls-Royce slipped 1.5p to 154p ahead of a Henderson Crosthwaite buy note, and Asda edged forward 0.5p to 67p with Hoare Govett nudging its forecast a few million pounds higher to £240m.
Rank Organisation improved 4.5p to 373p, shrugging off NatWest sell advice and concentrating on share-buying by chief executive Michael Gifford. It has been disclosed he has picked up 20,000 at 376p.
Wellcome added 5p to 1,028p as the High Court ruled the Wellcome Trust could accept the Glaxo offer. Medeva held at 176p after Nikko, the Japanese securities house, said it was "well on the way to recovery" following the 1993 profit warning. It forecasts profits of £59.3m for last year and £70.8m this year.
British Biotechnology slumped 99p to 491p following delays in the development of one of its cancer treatments.
Fisons hardened to 119p with talk an analyst had produced a 250p break- up valuation. The group is expected soon to announce the sale of its scientific instruments side as part of a shake-up.
Bluebird, the toy group, rose 12p to 248p on buying for the results, due next month. Smith New Court expect £19.2m against £9.8m.
The decision to stop Eurotunnel selling duty-free drink and tobacco shaved the shares 5p to 294p.
Stanhope, the stricken property group, returned from suspension at 3p, a far cry from the 8p at which trading was halted while rescue talks proceeded. British Land has produced a £3.5m offer.
Enterprise Computer remained suspended. Its promised statement has been postponed until Tuesday.
Regent Inns should produce heady interim figures on Monday. There are hopes the pubs chain will announce £1.8m, against £1m. Forecasts for the year average £3.3m. They are likely to be raised to nearer £3.7m. The shares are 307p. After being suspended at 120p on the backwater market, they arrived on the main market nearly two years ago at 149p.
Hubert Perrodo, chairman of Kelt Energy, the oil and gas group, has strengthened his already powerful position at the company. By converting nearly 70 million preference shares he has lifted his ordinary share holding to more than 75 per cent of the capital. Kelt, once laden with debt, returned to profit in 1992. The shares dipped 1p to 53p.
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