MARKET REPORT : Veba generosity swamped by C&W sellers

Veba, the German industrial group which has forged a trading link with Cable and Wireless, must be wondering whether it has an over-optimistic view of the telecommunications group's prospects.

It ended its C&W buy-in, picking up a further 120.6 million shares through Natwest Securities. The buying completed Veba's stated intention of lifting its stake to 10.5 per cent.

Last week when they bid for a 5 per cent stake the Germans let it be known they were prepared to pay up to 435p a share. Such was the institutional stampede to enjoy their generosity that the deal was completed at 395p.

Yesterday, as the Germans sought the remaining 5.5 per cent, they again said they were prepared to stretch to 435p. In the event the scramble to accept was so strong that they completed the buying at 384p with, once again, the offer oversubscribed. Aftertouching 388.5p the shares ended at 379p, up7p.

No doubt the Germans were able to console themselves with the thought they were genuine long-term investors, not indulging in short termism like so many of the selling institutions.

The Veba/C&W deal is an impressive £4bn link that should take the two deep into the German telecommunications industry and provide a base for a European drive.

The City likes the deal. But it is not overwhelmed by C&W's prospects. It frets about the deteriorating Hong Kong situation, the fierce mobile telephones competition and the group's problems in the UK market.

Profits in the year to March are expected to come out at £1,150m, up from £1,084m.

The rest of the stock market survived the latest interest rate increase in some style. The FT-SE 100 index rose 17.4 points to 3,034.7, helped along by New York's positive response to the higher US rates.

Turnover was helped by two programme trades and a Hanson-inspired revisitation of takeover speculation.

The ageing conglomerate is making no secret of its desire to expand. Argyll, the Safeway supermarket chain that has emerged as one of the market's favourite Hanson targets, put on 6p to 275p in brisk trading.

Costain, the builder, where Hanson and P&O are said to be interested, added 1.5p to 24p. It is, in effect, up for sale. Yorkshire Electricity, which is seen by some as the Hanson utilities punt, eased 7p to 762p in a generally dull electric market. But Northern, with Trafalgar on its back, gained 17p to 961p.

TSB, the banking group which has also been linked with Hanson, recovered a further 5.5p to 248.5p.

Scottish & Newcastle slipped 2p to 505p on worries about the impact of the floods on its Dutch Center Parcs holiday centres; Inchcape remained under pressure after its recent profit warning, dipping a further 11p to 301p. The shares have fallen nearly 100p since the profit setback was signalled.

Drug shares remained in form. Wellcome, on its results, climbed 7p to 1,005p and Glaxo, the bidder, 20p to 646p. Zeneca jumped 19p to 901p as bid speculation resurfaced.

Rolls-Royce had another difficult session as stories reappeared about Boeing cutbacks. The shares dipped 1.5p to 157.5p. The failure to announce expected Indian power contracts is probably more important.

British Aerospace rose 11p to 481p with Henderson Crosthwaite again recommending the shares as a buy. It believes the group's break-up value is 800p a share. The restructuring of the civil aircraft side is seen as marking a "major turning point in the company's long-term recovery prospects with the possibility of civil aircraft profits in 1997 after years of losses".

BAe's profits are expected to be £185m for last year, doubling to £300m this year. By 1997 around £500m is expected.

Siebe, the engineering group, rose 12p to 519p following a positive meeting with Henderson; Compass, the contract caterer, improved 3p to 324p on Smith New Court support.

Tadpole Technology was unchanged at 195p as Albert E Sharp, the company's stockbroker, repeated its forecast of £2m profits this year with £10.5m next.

"Investors are unlikely to see a more opportune moment to acquire shares," James Warhurst, an analyst, suggested.

Ramco Energy continued to strengthen on bullish Greig Middleton comments, and APTA Healthcare, a nursing homes proprietor, held at 18p as Charles Stanley made optimistic noises following the recent acquisition.

The stockbroker forecasts profits for the year ended April reaching £850,000, jumping to £2.4m next year. Analyst Richard Slape looks for £3.6m in 1998.

Bensons Crisps crumbled 12p to 18p after it produced a £6.7m loss against a £302,000 profit. The snack maker is being revamped, closing its Newport, South Wales, plant and concentrating production at Kirkham, Lancashire. A £4.6m cash call - a 7 for 4 placing and open offer at 16p - could leave Arlen, the electrical group run by. Grenville Howard, with 11 per cent of the shares.

Allied Leisure, the tenpin bowling group, improved 3p to 20p following a sharp trading recovery. But some wonder whether the revamped group will soon lose its independence. One name in the frame is Bass, the brewing giant, which could see Allied as a useful add-on to its own operations. At 20p Allied looks a sitting duck. In 1990 its shares reached 118p.

PROMOTED VIDEO
News
ebooksAn unforgettable anthology of contemporary reportage
Sport
Luis Suarez and Lionel Messi during Barcelona training in August
footballPete Jenson co-ghost wrote Suarez’s autobiography and reveals how desperate he's been to return
Money
Welcome to tinsel town: retailers such as Selfridges will be Santa's little helpers this Christmas, working hard to persuade shoppers to stock up on gifts
news
Arts and Entertainment
Soul singer Sam Smith cleared up at the Mobo awards this week
newsSam Smith’s Mobo triumph is just the latest example of a trend
News
Laurence Easeman and Russell Brand
people
Sport
Fans of Dulwich Hamlet FC at their ground Champion Hill
footballFans are rejecting the £2,000 season tickets, officious stewarding, and airline-stadium sponsorship
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

Compensation and Benefits Manager - Brentwood - Circa £60,000

£60000 per annum: Ashdown Group: Compensation and Benefits Manager - Compensat...

Data Analyst/Planning and Performance – Surrey – Up to £35k

£30000 - £35000 Per Annum plus excellent benefits: Clearwater People Solutions...

IT Systems Business Analyst - Watford - £28k + bonus + benefits

£24000 - £28000 per annum + bonus & benefits: Ashdown Group: IT Business Syste...

Markit EDM (CADIS) Developer

£50000 - £90000 per annum + benefits: Ampersand Consulting LLP: Markit EDM (CA...

Day In a Page

Wilko Johnson, now the bad news: musician splits with manager after police investigate assault claims

Wilko Johnson, now the bad news

Former Dr Feelgood splits with manager after police investigate assault claims
Mark Udall: The Democrat Senator with a fight on his hands ahead of the US midterm elections

Mark Udall: The Democrat Senator with a fight on his hands

The Senator for Colorado is for gay rights, for abortion rights – and in the Republicans’ sights as they threaten to take control of the Senate next month
New discoveries show more contact between far-flung prehistoric humans than had been thought

New discoveries show more contact between far-flung prehistoric humans than had been thought

Evidence found of contact between Easter Islanders and South America
Cerys Matthews reveals how her uncle taped 150 interviews for a biography of Dylan Thomas

Cerys Matthews on Dylan Thomas

The singer reveals how her uncle taped 150 interviews for a biography of the famous Welsh poet
DIY is not fun and we've finally realised this as a nation

Homebase closures: 'DIY is not fun'

Homebase has announced the closure of one in four of its stores. Nick Harding, who never did know his awl from his elbow, is glad to see the back of DIY
The Battle of the Five Armies: Air New Zealand releases new Hobbit-inspired in-flight video

Air New Zealand's wizard in-flight video

The airline has released a new Hobbit-inspired clip dubbed "The most epic safety video ever made"
Pumpkin spice is the flavour of the month - but can you stomach the sweetness?

Pumpkin spice is the flavour of the month

The combination of cinnamon, clove, nutmeg (and no actual pumpkin), now flavours everything from lattes to cream cheese in the US
11 best sonic skincare brushes

11 best sonic skincare brushes

Forget the flannel - take skincare to the next level by using your favourite cleanser with a sonic facial brush
Paul Scholes column: I'm not worried about Manchester United's defence - Chelsea test can be the making of Phil Jones and Marcos Rojo

Paul Scholes column

I'm not worried about Manchester United's defence - Chelsea test can be the making of Jones and Rojo
Frank Warren: Boxing has its problems but in all my time I've never seen a crooked fight

Frank Warren: Boxing has its problems but in all my time I've never seen a crooked fight

While other sports are stalked by corruption, we are an easy target for the critics
Jamie Roberts exclusive interview: 'I'm a man of my word – I'll stay in Paris'

Jamie Roberts: 'I'm a man of my word – I'll stay in Paris'

Wales centre says he’s not coming home but is looking to establish himself at Racing Métro
How could three tourists have been battered within an inch of their lives by a burglar in a plush London hotel?

A crime that reveals London's dark heart

How could three tourists have been battered within an inch of their lives by a burglar in a plush London hotel?
Meet 'Porridge' and 'Vampire': Chinese state TV is offering advice for citizens picking a Western moniker

Lost in translation: Western monikers

Chinese state TV is offering advice for citizens picking a Western moniker. Simon Usborne, who met a 'Porridge' and a 'Vampire' while in China, can see the problem
Handy hacks that make life easier: New book reveals how to rid your inbox of spam, protect your passwords and amplify your iPhone

Handy hacks that make life easier

New book reveals how to rid your email inbox of spam, protect your passwords and amplify your iPhone with a loo-roll
KidZania lets children try their hands at being a firefighter, doctor or factory worker for the day

KidZania: It's a small world

The new 'educational entertainment experience' in London's Shepherd's Bush will allow children to try out the jobs that are usually undertaken by adults, including firefighter, doctor or factory worker