Grand Metropolitan's shares soared yesterday as investors scrambled to buy stock amid a rumour, which began on Wednesday night in New York and flowed into London yesterday morning, that it was about to sell its Burger King hamburger business for over pounds 2bn.
Almost 34m shares were traded in the international food and drinks firm in London, which is three times the highest level of any other day this year and virtually seven times the normal daily turnover.
Stock Exchange officials contacted the company soon after dealings started, but decided there was no need for the company to make an official statement despite signs that a disorderly market in the shares was developing. GrandMet shares swiftly rose 20p and peaked at 459p, up 36.5p, before easing in late afternoon dealings to close at 443p, up 20.3p on the day.
GrandMet did, however, take the unusual step of informing any callers that it was not selling Burger King. But this was to no avail as dealers remained convinced that something was afoot at the company which has surprised the market with acquisitions and disposals several times in the last few years.
The last example was the purchase of Pet Foods just before Christmas, coming just a few months after ramming the message home to investors that it would concentrate on organically growing its business which also includes the giant IDV drinks company and the Pillsbury food company in the US.
GrandMet's unofficial denial of the Burger King rumours only succeeded in spawning several other lines of speculation spanning a break-up take- over bid being made by Philip Morris or KKR in the US, and one suggestion that GrandMet itself would dismantle itself.
A spokesman for GrandMet declined to comment on any of the other rumours. He believed that the race for shares could be partly attributed to fund managers "who don't believe we are not selling Burger King. But if it is true then they don't want to be short of stock."
He said: "We have said several times we are not selling it, and we are not going to sell it."Reuse content