Delta shares blunder
Friday 25 June 1999
The blunder, one of the most embarrassing mistakes in the bourse's 197- year history, caused hours of confusion in the City's dealing rooms and forced the authorities to cancel several trades to preempt legal action from angry investors.
At 10:12am, the LSE issued a statement saying that the cable and engineering group Delta was in talks which may lead to an offer at a "substantial premium to the current market price".
The news triggered a wave of buying in Delta, which propelled the company's price around 34 per cent higher to over 200p with more than 1.2 million shares traded.
Thirteen minutes later, Delta rushed out a statement denying the talks. The denial caused a sharp sell-off in Delta shares as investors hoping to cash in on a takeover bailed out.
At 10:50am, the LSE issued a correction stating that DBS Management, a small financial services group, was the company in bid talks. At the same time, the Delta shares were suspended. Trading in Delta resumed trading at midday and closed 4.5p higher at 154.5p.
Sources said the confusionwas caused by DBS' decision to use "Delta" as the code-word for its own statement.
The LSE cancelled all Delta trades between 10:12am and 10:50am and ordered brokers to repay investors who had lost money on the deals. The LSE declined to comment.
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