MARKET REPORT : Albright float price gets bogged down

The FT-SE 100 index fell 9.8 points to 3,071.3 but the FT-SE 250 index gained 16.7 to 3,462. Turnover was 706.7 million shares with 24,010 bargains. Gilts were little changed.

The soggy state of the stock market has forced Barclays de Zoete Wedd to dramatically cut back the flotation price for the Albright & Wilson chemical group.

As the market closed it was suggested BZW had decided to settle for a 150p offer, pricing the group at £470m.

When Albright's candidature was first disclosed in December hopes were high it could command a 200p issue price, giving the group a £600m-plus capitalisation.

The BZW decision to reduce its more exotic hopes has, it is understood, won the support of institutional investors.

They have expressed their willingness to support at the much lower level.

It is expected the prospectus will be published tomorrow.

At 150p, Albright shares will be on a 5 per cent yield and 11.7 times historic earnings. The shares are being sold by Tenneco, a US industrial group that took control in 1978.

It is one of Britain's oldest chemical group, dating back to 1851. One of the long standing jokes at Albright is that God allowed the group to prosper on phosphates but handed the rest of the chemical industry on a plate to Imperial Chemical Industries.

Albright has been hit by this week's weakness of the market and a sudden disenchantment with new issues.

Share floats are out of fashion as many investors have been forced to lick their wounds as seemingly high-flying shares have come to grief.

On Monday, Eurovein, an engineer, offered a profit warning, sending the shares crashing 51p to 86p. The shares, which arrived at 141p in November, fell another 2p to 84p yesterday.

Such performances have made the market exceedingly cautious. In the past few weeks a number of new issues have been pulled.

Albright's decision to push ahead, at a time most of the new issue attention is being directed at National Power and PowerGen, will, even at the cut- price level, severely test investor appetite for newcomers, even if represented by such profitable and venerable institutions as Albright.

The rest of the market was dominated by utilities as Michael Heseltine, President of the Board of Trade, cleared the hostile Trafalgar House £1.2bn takeover bid for Northern Electric.

Northern shares surged 116p to 1,091p in busy trading.

The clearance, in effect, signals an open season for electricity and water bids. Hanson is thought to be a possible predator at Yorkshire, up 73p to 884p. Seeboard, up 28p to 463p, is said to be in the sights of a French group.

With their huge cash-generating ability the electricity groups offer mouth-watering attractions, particularly to a cash-hungry conglomerate, as Trafalgar has demonstrated.

Defensive deals among electricities is clearly a likely development; so are mergers with cash-demanding water companies which would, from an industry viewpoint, have the advantage of soaking up much of the surplus cash being generated and keep civil servant-style methods out of the hands of hard-nosed businessmen.

Among waters higher were Northumbrian 46p to 754p, Severn Trent 21p to 521p and Thames 10p to 489p.

The generators, surprisingly, failed to draw any joy from the Northern clearance with National Power down 5p at 472.5p and PowerGen off 7p at 497p.

The market was subjected to a two-way pull. Inflation and interest rate worries, together with the deteriorating pound and the Government's growing confusion over Europe, left the blue-chip FT-SE 100 index down 9.8 points to 3,071.3. But the utilities content fattened the supporting FT-SE 250 index 16.7 to 3,462.

Williams Holdings, the conglomerate, edged forward 1.5p to 334p following what was described as a positive meeting with BZW. The Eurotunnel promotion lowered P&O 6p to 594p.

Govett, the fund manager, held at 286p. It says it will "vigorously" defend the High Court action brought by Govett American Endeavour fund.

British Petroleum, strong ahead of results, fell 7p to 419p when they appeared; Reuters, on figures, lost 8.5p to 438.5p.

Reed International was unsettled by a Lehman Brothers downgrading, falling 22.5p to 737.5p.

Vodafone had a tense session with stories buzzing that it intended to change some of its dealership arrangements. The shares were little changed at 188p in brisk trading.

Parkdean Leisure, a caravan sites group, held at 139p. There is talk of a takeover bid below the market price. Some suggest 130p.

Sutcliffe Speakman, the engineer which has had an erratic record, slumped after it warned that profits would fall below the £1.6m the market had expected. The shares closed 10p down at 17p.

Unit, the pallets group, was suspended at 31p. It is making a £1.2m cash call to help fund two property deals. On the Irish exploration market Celtic Gold fell 4p to 12p. In a reverse takeover it has acquired Fisher, a loss-adjuster.

European Colour, the chemical colour maker, edged ahead 1p to 68.5p. There is talk of a significant deal soon. One suggestion is that EC, which has made strong progress under Mike Armitage, is about to acquire a big competitor. Some wonder if it could be near to clinching a deal with Sun of the US, which has considerable interests in this country.

Fairline Boats, maker of luxury cruisers, stuck at 421p. The standstill agreement with Renwick, a Devon group controlled from South Africa, has expired. Renwick has 29.9 per cent and Newington is thought to be prepared to sell its remaining 25 per cent interest. Talks, it is said, have resumed between the two parties and an announcement is likely soon.

Start your day with The Independent, sign up for daily news emails
News
Sir David Attenborough
people
Life and Style
Young girl and bowl of cereal
food + drink
News
Comic miserablist Larry David in 'Curb Your Enthusiasm'
peopleDirector of new documentary Misery Loves Comedy reveals how he got them to open up
Arts and Entertainment
Henry VIII played by Damien Lewis
tvReview: Scheming queens-in-waiting, tangled lines of succession and men of lowly birth rising to power – sound familiar?
PROMOTED VIDEO
Sport
football
Arts and Entertainment
'The Archers' has an audience of about five million
radioA growing number of listeners are voicing their discontent; so loudly that even the BBC's director-general seems worried
News
i100
Arts and Entertainment
Ready to open the Baftas, rockers Kasabian are also ‘great film fans’
musicExclusive: Rockers promise an explosive opening to the evening
Life and Style
David Bowie by Duffy
fashion
Arts and Entertainment
Hell, yeah: members of the 369th Infantry arrive back in New York
booksWorld War Z author Max Brooks honours WW1's Harlem Hellfighters in new graphic novel
ebooks
ebooksA year of political gossip, levity and intrigue from the sharpest pen in Westminster
News
advertisingVideo: The company that brought you the 'Bud' 'Weis' 'Er' frogs and 'Wasssssup' ads, has something up its sleeve for Sunday's big match
Arts and Entertainment
tv
News
i100
Environment
Dame Vivienne Westwood speaking at a fracking protest outside Parliament on Monday (AP)
environment
Life and Style
tech
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: Market Research Executive

£23000 - £26000 per annum + Benefits: Ashdown Group: Market Research Executive...

Recruitment Genius: Technical Report Writer

£25000 - £35000 per annum: Recruitment Genius: A Technical Report Writer is re...

MBDA UK Ltd: Indirect Procurement Category Manager

Competitive salary & benefits!: MBDA UK Ltd: MBDA UK LTD Indirect Procurement...

Recruitment Genius: Web Developer - PHP

£16500 - £16640 per annum: Recruitment Genius: This fast growing Finance compa...

Day In a Page

Isis hostage crisis: Militant group stands strong as its numerous enemies fail to find a common plan to defeat it

Isis stands strong as its numerous enemies fail to find a common plan to defeat it

The jihadis are being squeezed militarily and economically, but there is no sign of an implosion, says Patrick Cockburn
Virtual reality thrusts viewers into the frontline of global events - and puts film-goers at the heart of the action

Virtual reality: Seeing is believing

Virtual reality thrusts viewers into the frontline of global events - and puts film-goers at the heart of the action
Homeless Veterans appeal: MP says Coalition ‘not doing enough’

Homeless Veterans appeal

MP says Coalition ‘not doing enough’ to help
Larry David, Steve Coogan and other comedians share stories of depression in new documentary

Comedians share stories of depression

The director of the new documentary, Kevin Pollak, tells Jessica Barrett how he got them to talk
Has The Archers lost the plot with it's spicy storylines?

Has The Archers lost the plot?

A growing number of listeners are voicing their discontent over the rural soap's spicy storylines; so loudly that even the BBC's director-general seems worried, says Simon Kelner
English Heritage adds 14 post-war office buildings to its protected lists

14 office buildings added to protected lists

Christopher Beanland explores the underrated appeal of these palaces of pen-pushing
Human skull discovery in Israel proves humans lived side-by-side with Neanderthals

Human skull discovery in Israel proves humans lived side-by-side with Neanderthals

Scientists unearthed the cranial fragments from Manot Cave in West Galilee
World War Z author Max Brooks honours WW1's Harlem Hellfighters in new graphic novel

Max Brooks honours Harlem Hellfighters

The author talks about race, legacy and his Will Smith film option to Tim Walker
Why the league system no longer measures up

League system no longer measures up

Jon Coles, former head of standards at the Department of Education, used to be in charge of school performance rankings. He explains how he would reform the system
Valentine's Day cards: 5 best online card shops

Don't leave it to the petrol station: The best online card shops for Valentine's Day

Can't find a card you like on the high street? Try one of these sites for individual, personalised options, whatever your taste
Diego Costa: Devil in blue who upsets defences is a reminder of what Liverpool have lost

Devil in blue Costa is a reminder of what Liverpool have lost

The Reds are desperately missing Luis Suarez, says Ian Herbert
Ashley Giles: 'I'll watch England – but not as a fan'

Ashley Giles: 'I'll watch England – but not as a fan'

Former one-day coach says he will ‘observe’ their World Cup games – but ‘won’t be jumping up and down’
Greece elections: In times like these, the EU has far more dangerous adversaries than Syriza

Greece elections

In times like these, the EU has far more dangerous adversaries than Syriza, says Patrick Cockburn
Holocaust Memorial Day: Nazi victims remembered as spectre of prejudice reappears

Holocaust Memorial Day

Nazi victims remembered as spectre of prejudice reappears over Europe
Fortitude and the Arctic attraction: Our fascination with the last great wilderness

Magnetic north

The Arctic has always exerted a pull, from Greek myth to new thriller Fortitude. Gerard Gilbert considers what's behind our fascination with the last great wilderness