Market Report: Airtours sells shareholding in Owners Abroad at a loss

IN A surprise move, the Airtours package holidays group has sold its 8.21 per cent shareholding in the rival Owners Abroad. The shares, a legacy from the near- pounds 300m takeover battle that ended on Budget Day, were placed at 117p as the stock market closed.

Airtours built its shareholding at the height of the struggle, paying up to 150p a share. It has lost more than pounds 3.5m on the stake which, with takeover bills, means its Owners Abroad excursion cost at least pounds 11m.

The market had expected Airtours to offer its shares in the 150p tender for 12.5 per cent of Owners due from Thomas Cook and its German owner LTU. Because of entrenched shareholdings Airtours could have expected to receive the tender price for about a fifth of its shares. The Cook offer is due to appear by the end of next week.

It will make the Germans the biggest single influence at Owners, lifting their stake to more than 20 per cent. During the battle they picked up 9 per cent of Owners, paying up to 152p and taking the edge off the Airtours market operations.

Airtours rose 1p to 305p; Owners was unchanged at 124p.

The rest of the market edged ahead with the FT-SE 100 index up 14.5 points at 2,861. Tidying-up trades ahead of the end of the tax year, including bed and breakfast deals, were the main feature, ballooning volume to 734.7 million shares.

Hopes that the Government will be forced to lower interest rates and renewed speculation of another German cut this week helped sentiment.

Nicholas Knight of Nomura, an arch bull, who is predicting the index will hit 3,500 points this year, believes shares are oversold but nevertheless wonders whether the market is in for a period of drift.

British Gas flared 11.5p higher to 314.5p, reflecting the treatment of gas in the Government's controversial coal deal and ahead of a speech tomorrow by Sir James McKinnon, Ofgas chief. Sudden enthusiasm about British Petroleum's oil reserves off the Shetland Islands lifted the shares 2.5p to 311p.

The newcomer Quality Software made a stunning debut. Placed by Hoare Govett at 380p, the shares shot ahead to 510p, closing at 537p. One deal was struck at 570p.

In busy trading, Hambro Insurance Services, a Panmure Gordon offering, closed at 144p against a 138p placing price.

Drug shares had a more settled session with Glaxo Holdings, helped by rumours of share buy-in plans, up 12p at 588p. The Zeneca timetable left Imperial Chemical Industries 15p lower at 1,169p.

Rank Organisation, up 14p at 663p, was spurred by an announcement that its UK holiday bookings were running 7 per cent ahead of last year. Nigel Reed at Paribas suggests the bookings advance is worth 90p a share. The new pricing policy by Euro Disney added another 43p to 1,168p, a two-day gain of 93p.

JA Devenish rose 7p to 293p as the market continued to ponder the fate of the Boddington Group's near 20 per cent interest.

Thorn EMI eased 2p to 888p. It is expected to sell its stake in Thames TV to Pearson, up 6p at 410p. Thames, after soaring 32p, was suspended at 221p.

Gold shares were firm, helped by a stronger bullion price. Vaal Reefs rose 125p to pounds 30.

HSBC, the banking group, climbed 12p to 616p, as Barclays de Zoete Wedd made positive noises. Standard Chartered and Lloyds Bank, also enjoying BZW support, gained 7p to 708p and 12p to 535p.

Sedgwick Group, the insurance broker, shaded 1p to 162p. To finance the takeover of Medisure Group, SG Warburg placed 10.6 million shares at 159p.

BM Group, the engineer, had another uncertain session as worries deepened about losses and banking covenants. The shares, more than 400p last year, fell 6p to 36p.

Avesco climbed 13p to 98p on its pounds 12.1m rights issue and planned demerger of VideoLogic. Acorn Computers edged ahead 3p to 102p. It is due to hold presentations in the City next month.

European Colour rose another 5p to 27p on the interest from David Williams, ex-Mosaic Investments.

Ticketing Group, the Keith Prowse agency, held at 2.25p. Schroder Investment Management has acquired another 10.75 million shares, lifting its stake to nearly 50 million (5.8 per cent); Robert Fleming has 3.68 per cent.

London Financial Investment Group rose 3p to 28.5p following a mysterious 32p-a-share offer. Clayform Properties eased 1p to 11p following the sale of its 75 per cent of Dunloe House Group to Ben Dunne, the former supermarket chief.

The FT-SE 100 index rose 14.5 points to 2,861 and the FT-SE 250 index 4.7 to 3,096.3. Turnover stretched to 734.7 million shares with 43,397 bargains. The three-week account ends on 16 April with settlement on 26 April. Government stocks edged ahead.

A leading Singapore stockbroker, Phillips Securities, has taken a substantial but minority shareholding in Walker Crips Weddle Beck, the London-based stockbroker, established in 1914. Walker Crips Weddle Beck, which remains under the control of its directors led by Larry Byford, is a large private client house with more than 40,000 investors on its books. It has five regional offices.

Expect action soon at Downiebrae Holdings, the Glasgow steel stockholder and flangemaker. Last month Robert Newman, a former director, acquired 29.9 per cent and made no secret of his intention to use the sleepy company as an acquisition vehicle. The first takeover is thought to be near to being clinched. Downiebrae shares rose 5p to 58p. They have climbed from 21p since the Newman arrival.