Investors line up L&G as next takeover candidate

A 900p-a-share offer for the Legal & General insurance giant was the hot tip after the stock market had absorbed the pounds 3.1bn blockbuster Granada bid.

Not surprisingly, the strike for Forte produced an array of rumours about likely bid candidates with many bewhiskered old faithfuls forced back into the limelight.

For a long while Forte was regarded as a prime bid target. But in the past few years the catering and hotel group seemed to lose its takeover appeal as it trimmed down to cut its debt mountain.

Still, in a year that has seen a succession of mega-bids with some old favourites falling, the market anticipates much more corporate action.

Rumours of a big insurance strike have strengthened in recent weeks with L&G and Royal Insurance the names put forward.

The L&G buzz was the dominant influence in late trading. The shares, up 13p at 695p, are at a high and many believe, without a bid, are expensive. L&G has pounds 36bn of funds under management. National Westminster Bank has made no secret of its desire to build its investment management side and is regarded as a possible bidder.

A continental strike is also rumoured. Allianz, the German insurer that bid unsuccessfully for Eagle Star a decade ago, could be interested and there is even talk of a German bank, perhaps Deutsche Bank, moving in.

Royal rose 12p to 386p and Commercial Union 9p to 635p. Prudential gained 6.5p to 430p. Banks, helped along by the Whitehall clearance of Lloyds Bank's offer for TSB, were again in demand, with talk of bids and deals capturing the imagination.

Lloyds jumped 21.5p to 871p and TSB 7p to 415p. NatWest, negotiating the sale of its US banking arm, put on 5.5p to 692p.

Standard Chartered, the sector's current takeover favourite, gained 20p to 572p and Bank of Scotland 6p to 272p. Abbey National advanced 19.5p to 621p and Barclays 17p to 810p.

The day's star performer was, not surprisingly, Forte which surged 72.5p to 347.5p. Its satellite companies, Alpha Airports and Savoy Hotel, joined in the fun. Alpha rose 13p to 114p and Savoy came to life with the 'A' shares up 142p to 1,025p on the possibility of independence. The high- voting 'B' shares were unchanged at 1,800p.

Most leisure groups drew strength from the bid. Brewers with hotel interests firmed; Bass was up 4p to 686p and Vaux 7p to 269p; Ladbroke, at one time thought to be Granada's target, ended 1.5p higher at 138.5p after touching 148p.

Pearson and Yorkshire-Tyne Tees Television, two companies thought to have been in Granada's sights, fell with Pearson off 11p at 648p and Yorkshire 16p to 612p. Granada fell 48p to 649p.

The takeover excitement gave the FT-SE 100 index another record-breaking day. It jumped 28.3 points to 3,632.4 with another trading peak in New York also helping sentiment.

Vodafone, the mobile telephone group, had a torrid time with American investors, who had more than 40 per cent of the group at the last count, said to be keen sellers. With Seaq putting volume at 56.5 million shares the price collapsed 23p to 216p.

It seems many of Vodafone's hitherto loyal US followers were unsettled by the cautious trading statement, pointing to tighter margins. MAID, with its US offering completed at 242.5p, touched 290p, closing at 250p.

Cable & Wireless, seen as the most vulnerable blue chip to a hostile takeover strike following the boardroom departures, gained 37p to a year's high of 466p.

National Grid, in its when-issued form, traded up to 237p with volume put at 22.1 million shares. The price closed at 228p.

Guinness remained under the weather, although LVMH denied it intended to cut its 20 per cent shareholding. The shares lost 9p to 458p.

Courtaulds, the chemical group, jumped 39p to 399p following better-than- expected figures, but Inchcape tumbled another 12.5p to 255.5p, a year's low. Fears it will be forced to cut its dividend are growing and sentiment was also ruffled by the latest downgrading, with NatWest Securities lowering pounds 10m to pounds 140m. Hillsdown Holdings, the food group, slipped 2p to 156p as the market became aware of a possible downgrading from Barclays de Zoete Wedd.

Opec's decision to roll over the 24.52 million barrels a day production ceiling sent Shell to 801p, up 8p, and British Petroleum to 506.5p, also up 8p.

TAKING STOCK

r Developments are thought to be under way at Jarvis, the once- ailing building and construction group where new management, led by Paris Moayedi, has moved in. The shares rose 1p to 22.25p, valuing the group at pounds 9m. The price has moved between 9p and 29p this year.

After three years of losses Jarvis turned a near-pounds 3m deficit into a pounds 108,000 profit in the first six months of this year and stronger progress is likely in the second six months.

The group is thought to be about to appoint new stockbrokers and expansion moves will follow.

r Telecom Credit Europe, one of the earlier arrivals on the Alternative Investment Market, is rumoured to be set for corporate action. The shares rose 3p to 46p; they have been as high as 53p.

Suggested Topics
Start your day with The Independent, sign up for daily news emails
ebooks
ebooksA celebration of British elections
  • Get to the point
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

Ashdown Group: Editor-in-chief - Financial Services - City, London

£60000 - £70000 per annum + benefits : Ashdown Group: A highly successful, glo...

Ashdown Group: Junior Application Support Analyst - Fluent German Speaker

£25000 - £30000 per annum + benefits: Ashdown Group: A global leader operating...

Guru Careers: Management Accountant

£27 - 35k + Bonus + Benefits: Guru Careers: A Management Accountant is needed ...

Guru Careers: Project Manager / Business Analyst

£40-50k + Benefits.: Guru Careers: A Project Manager / Business Analyst is nee...

Day In a Page

General Election 2015: Ed Miliband's unlikely journey from hapless geek to heart-throb

Miliband's unlikely journey from hapless geek to heart-throb

He was meant to be Labour's biggest handicap - but has become almost an asset
General Election 2015: A guide to the smaller parties, from the the National Health Action Party to the Church of the Militant Elvis Party

On the margins

From Militant Elvis to Women's Equality: a guide to the underdogs standing in the election
Amr Darrag: Ex-Muslim Brotherhood minister in exile still believes Egypt's military regime can be replaced with 'moderate' Islamic rule

'This is the battle of young Egypt for the future of our country'

Ex-Muslim Brotherhood minister Amr Darrag still believes the opposition can rid Egypt of its military regime and replace it with 'moderate' Islamic rule, he tells Robert Fisk
Why patients must rely less on doctors: Improving our own health is the 'blockbuster drug of the century'

Why patients must rely less on doctors

Improving our own health is the 'blockbuster drug of the century'
Sarah Lucas is the perfect artist to represent Britain at the Venice Biennale

Flesh in Venice

Sarah Lucas has filled the British pavilion at the Venice Biennale with slinky cats and casts of her female friends' private parts. It makes you proud to be a woman, says Karen Wright
11 best anti-ageing day creams

11 best anti-ageing day creams

Slow down the ageing process with one of these high-performance, hardworking anti-agers
Juventus 2 Real Madrid 1: Five things we learnt, including Iker Casillas is past it and Carlos Tevez remains effective

Juventus vs Real Madrid

Five things we learnt from the Italian's Champions League first leg win over the Spanish giants
Ashes 2015: Test series looks a lost cause for England... whoever takes over as ECB director of cricket

Ashes series looks a lost cause for England...

Whoever takes over as ECB director of cricket, says Stephen Brenkley
Fishing for votes with Nigel Farage: The Ukip leader shows how he can work an audience as he casts his line to the disaffected of Grimsby

Fishing is on Nigel Farage's mind

Ukip leader casts a line to the disaffected
Who is bombing whom in the Middle East? It's amazing they don't all hit each other

Who is bombing whom in the Middle East?

Robert Fisk untangles the countries and factions
China's influence on fashion: At the top of the game both creatively and commercially

China's influence on fashion

At the top of the game both creatively and commercially
Lord O’Donnell: Former cabinet secretary on the election and life away from the levers of power

The man known as GOD has a reputation for getting the job done

Lord O'Donnell's three principles of rule
Rainbow shades: It's all bright on the night

Rainbow shades

It's all bright on the night
'It was first time I had ever tasted chocolate. I kept a piece, and when Amsterdam was liberated, I gave it to the first Allied soldier I saw'

Bread from heaven

Dutch survivors thank RAF for World War II drop that saved millions
Britain will be 'run for the wealthy and powerful' if Tories retain power - Labour

How 'the Axe' helped Labour

UK will be 'run for the wealthy and powerful' if Tories retain power