Investors line up L&G as next takeover candidate
Thursday 23 November 1995
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.
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.
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