MARKET REPORT : French romance cools for AWA

The FT-SE 100 index gained 29.8 points to 3,049.3 and the FT-SE 250 rose 0.5 to 3,401. Turnover was 701.1 million shares with 22,624 bargains. Gilts rose more than one point.

Arjo Wiggins Appleton, one of the more intriguing stock market constituents, hugged the limelight as the shares jumped 12.5p to 251p in busy trading.

The paper and packaging group has been the subject of intense takeover speculation since the death of Bernard Dumon, head of the French group, St Louis.

St Louis accounts for 40 per cent of AWA. In recent times it had displayed much more interest in its food operations than its packaging involvements,

Its late chairman died on a trip as he analysed a possible food expansion in eastern Europe.

St Louis is, in effect, controlled byWorms et Cie and the Agnelli family.

They are both thought to be much more keen on further food expansion than developing the packaging side. Indeed, if the price was right, a deal could easily be concluded the market believes.

AWA is seen as vulnerable as the French disenchantment becomes increasingly obvious. The failure of the group to appoint a finance director and the lack of a British boardroom representative are also seen as indications the group cannot be expected to remain independent. In the past week the share have risen from 223p.

Four years ago the £1.5bn merger between Britain's Wiggins Teape Appleton, once part of BAT Industries, and France's Arjomari-Priopux seemed to be one of those Euro-deals born in heaven when it was announced.

But, like so much of the alleged EC influence, the realisation has failed to meet expectations.

The group has committed the cardinal sin of cutting its dividend. And the shares have fallen from a peak of 309p to a low of 127p, before staging a recovery.

It is quite clear that St Louis holds the key to AWP. The struggle regarding St Louis's destiny will ultimately decide whether the Anglo-French packaging and paper group has an independent future.

Its current stock market capitalisation nudges £2bn, an ideal target, some would argue, for that bidder for all seasons, Hanson, to show its hand. If not, perhaps, Bowater would be prepared to take the AWA group out of its misery?

The rest of the stock market had a more enjoyable day with the FT-SE 100 index gaining 29.8 points to 3,049.3. New York's dramatic surge to a peak above 4,000 was the prime factor behind the advance.

Hopes that US interest rates had at last peaked, the Ulster initiative and some encouraging company figures combined to add a little sparkle to what could easily have been another subdued performance.

But electricities, so long the bedrock of an uncertain market, had a dull session as Trafalgar House produced the sort of takeover offer for Northern Electric the market had been dreading. The new offer left Northern 75p lower at 1,053p.

Other electricities gave ground with such takeover favourites as Yorkshire (Hanson) and Seeboard (a French group) giving ground.

The generators had a bright day with National Power puting on 2p at 482p and PowerGen 6p at 519p.

Lucas Industries had a difficult session as US authorities said they would block any future defence deals. At one time the shares were down to 163p; they closed at 175p, off 7p. Seaq put turnover at almost 15.5 million shares, a big volume by Lucas standards.

Cable and Wireless improved 5p to 387p as it confirmed it intends to become a partner with the Japanese giant Nippon in the new-style handy phones, said to be the successor to mobile telephones. C&W is prepared to invest $10m in the venture.

Telegraph, the newspaper group, gained 54p to 434p as Canadian Conrad Black said he would bid for the outstanding shares. Any buyback price has yet to be disclosed.

In May Mr Black, ahead of a sharp price cut by the Daily Telegraph sold shares to institutional investors at 587p.

SmithKline Beecham drew comfort from a US Food and Drug Administration approval of a hepatitis drug; the shares rose 18p to 497p. But British Biotechnology fell a further 23p to 441p in response to last week's surprise admission the group faced delays over one of its cancer treatments. The shares have fallen nearly 150p since the statement.

Airtours, rumoured to have a series of European acquisitions in mind, gained 4p to 419p. There is also said to be the possibility of a rights issue.

Tullow Oil put on 2p to 46p after reporting a "highly encouraging" exploration well in Syria. It holds a 24 per cent interest in the development. The shares have recovered strongly since Tullow revealed what was regarded as disappointing progress in Pakistan, its main development area.Newcomer GET, started as Great Eastern Trading in 1955, made a firm debut. Shares of the electrical components group opened at 128p against a 125p placing price by stockbroker Greig Middleton.

Horace Small Apparel at last responded to takeover interest, gaining 8p at 104p and Filtronic, the new issue star of 1994, continued to advance, gaining a further 6p to 246p as takeover hopes swirled.

Vodafone put on 6.5p to 196.5p with US buying said to be responsible and Amersham International rallied 29p to 836p with US buyers said to be interested.

BSkyB, the television group, had another weak session as fears grew about possible competition in the satellite television industry.

The shares retreated 4.5p to 256p, a two-day fall of 11p.

Syltone, a maker of road engineering projects, firmed 1.5p to 159.5p. Stockbroker Beeson Gregory has adopted a bullish approach. It forecasts profits will hit £3m this year (up from £2.52m) and £3.6m next.

Start your day with The Independent, sign up for daily news emails
  • 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

SThree: Trainee Recruitment Consultant

£20000 - £25000 per annum + OTE £45,000: SThree: SThree Group have been well e...

Ashdown Group: IT Manager / Development Manager - NW London - £58k + 15% bonus

£50000 - £667000 per annum + excellent benefits : Ashdown Group: IT Manager / ...

Recruitment Genius: Sales Consultant / Telemarketer - OTE £20,000

£13000 - £20000 per annum: Recruitment Genius: Scotland's leading life insuran...

Ashdown Group: Training Programme Manager - City, London

£40000 - £45000 per annum + benefits : Ashdown Group: Training Programme Manag...

Day In a Page

Where the spooks get their coffee fix: The busiest Starbucks in the US is also the most secretive

The secret CIA Starbucks

The coffee shop is deep inside the agency's forested Virginia compound
Revealed: How the Establishment closed ranks over fallout from Loch Ness Monster 'sighting'

How the Establishment closed ranks over fallout from Nessie 'sighting'

The Natural History Museum's chief scientist was dismissed for declaring he had found the monster
One million Britons using food banks, according to Trussell Trust

One million Britons using food banks

Huge surge in number of families dependent on emergency food aid
Excavation at Italian cafe to fix rising damp unearths 2,500 years of history in 3,000 amazing objects

2,500 years of history in 3,000 amazing objects

Excavation at Italian cafe to fix rising damp unearths trove
The Hubble Space Telescope's amazing journey, 25 years on

The Hubble Space Telescope's amazing journey 25 years on

The space telescope was seen as a costly flop on its first release
Did Conservative peer Lord Ashcroft quit the House of Lords to become a non-dom?

Did Lord Ashcroft quit the House of Lords to become a non-dom?

A document seen by The Independent shows that a week after he resigned from the Lords he sold 350,000 shares in an American company - netting him $11.2m
Apple's ethnic emojis are being used to make racist comments on social media

Ethnic emojis used in racist comments

They were intended to promote harmony, but have achieved the opposite
Sir Kenneth Branagh interview: 'My bones are in the theatre'

Sir Kenneth Branagh: 'My bones are in the theatre'

The actor-turned-director’s new company will stage five plays from October – including works by Shakespeare and John Osborne
The sloth is now the face (and furry body) of three big advertising campaigns

The sloth is the face of three ad campaigns

Priya Elan discovers why slow and sleepy wins the race for brands in need of a new image
How to run a restaurant: As two newbies discovered, there's more to it than good food

How to run a restaurant

As two newbies discovered, there's more to it than good food
Record Store Day: Remembering an era when buying and selling discs were labours of love

Record Store Day: The vinyl countdown

For Lois Pryce, working in a record shop was a dream job - until the bean counters ruined it
Usher, Mary J Blige and Will.i.am to give free concert as part of the Global Poverty Project

Mary J Blige and Will.i.am to give free concert

The concert in Washington is part of the Global Citizen project, which aims to encourage young people to donate to charity
10 best tote bags

Accessorise with a stylish shopper this spring: 10 best tote bags

We find carriers with room for all your essentials (and a bit more)
Paul Scholes column: I hear Manchester City are closing on Pep Guardiola for next summer – but I'd also love to see Jürgen Klopp managing in England

Paul Scholes column

I hear Manchester City are closing on Pep Guardiola for next summer – but I'd also love to see Jürgen Klopp managing in England
Jessica Ennis-Hill: 'I just want to give it my best shot'

Jessica Ennis-Hill: 'I just want to give it my best shot'

The heptathlete has gone from the toast of the nation to being a sleep-deprived mum - but she’s ready to compete again. She just doesn't know how well she'll do...