Since the group announced a pounds 219m rights issue a week ago, the shares have climbed from 128p to 141p after touching 144p. And, in heavy trading, the nil-paid rights have more than doubled to 37p.
It is the activity in the rights shares that is prompting some to ponder whether the long-suspected takeover bid is about to materialise.
There is a suggestion that some speculators were wrongfooted when rights dealings started on Thursday. But the more intriguing explanation is that a would-be predator is, under the camouflage of the rights, building a secret shareholding that would not have to be declared until the rights shares were taken up.
It could be significant that on the first day of rights dealings there was a scramble to pick up 5 million shares offered by Schroders. The keen bidding seems to have provoked much of the follow-through interest.
Lasmo is not short of potential suitors. The French Total oil giant is often mentioned. Another candidate is Enterprise Oil, down 4p at 445p.
PowerGen, the privatised generator, is another name in the frame. It has made no secret of its desire to grow in the oil and gas industry and fuelled speculation about its ambitions by appointing SG Warburg to operate alongside Kleinwort Benson as its stockbroker. PowerGen fell 7p to 495p.
Lasmo has looked vulnerable since its disastrous takeover of Ultramar, an exercise that more than halved the value of the combined group.
It was forced to make boardroom changes, and then came what many regard as a rescue rights issue.
But the oil group was not the only subject of bid talk. Laura Ashley, which is losing its chief executive Jim Maxmin, climbed 6p to 86p with a number of big trades going through. The group, with a poor profits record, no longer has the protection of the founding Ashley family.
The rest of the stock market remained under the interest rate whip. A volatile New York performance destroyed any hopes of a recovery and by the close the FT-SE 100 index was nursing a 29.7-point fall at 3,098.3.
In early trading, hopes lingered that despite the US increase British rates could still be nudged lower. But disappointing earnings growth quickly undermined such thoughts.
Government stocks had another stressful session, with falls nudging pounds 1.
Warburg, hit by a Barclays de Zoete Wedd downgrade on Tuesday, had to contend with more bearish influences. The sharp setbacks suffered by two US investment houses, Bankers Trust and Citicorp, were seen as illustrating just how difficult trading has been for securities houses so far this year.
With Credit Lyonnais Laing putting Warburg on its sell list, the shares gave up 48p to 690p, a two-day fall of 62p.
Others hit included Hambros, down 13p to 365p, and Smith New Court, off 7p to 350p.
Among clearing banks HSBC lost 12p to 745p as UBS and Warburg put out sell signals.
Hogg, the insurance broker where takeover talks are on, gained 2p to 224p with Swiss buying evident.
British Aerospace lost 4p to 467p as overseas shareholdings remained at their ceiling of 29.5 per cent.
But Rolls-Royce flew 2p higher to 195p, continuing to draw strength from the United Technologies results. The US group owns Rolls' big rival, Pratt & Whitney.
Deepening losses at USAir lowered British Airways, with a near 20 per cent interest in the US airline, 10p to 406p.
Vodafone perked up 4p to 500p as two investment houses, Henderson Crosthwaite and NatWest Securities, suggested the market had over-reacted to the launch of the Hutchison Orange system. The shares rose 4p to 500p.
Wellcome was unsettled by option activity, falling 13p to 514p. London International Group continued to suffer from its expected restructuring, retreating a further 7p to 114p. Eurotunnel, figures today, lost 20p to 476p. A rights issue, thought to be about pounds 750m, hovers.
Lonrho lost much of its Ashanti-inspired gain with NatWest urging investors to take profits. The shares fell 7p to 147p.
The housebuilder Bryant improved 6p to 164p. Kleinwort upgraded. For this year it lifted its forecast by pounds 3m to pounds 34m and it revised next year's estimate by pounds 2m to pounds 47m. The securities house has pencilled in pounds 51m for 1996.
The instrument maker Boosey & Hawkes sounded a confident note in the gloom, gaining 75p to 1,350p on its five-for-one share split.
City Site Estates, the Glasgow property group, jumped 10p to 80p as Julian Tregor and Brian Myerson's UK Active Value Fund snapped up 9.74 per cent. The stake was part of a 14.48 per cent interest unloaded by Scottish Provident. Messrs Tregor and Myerson, famed for their involvement at Liberty and Greycoat, apparently feel CSE is an undervalued property play.
Linton Park, the fishing to plantation group, rose 18p to 378p. The gain reflected recent fine figures but a 200,000-share purchase by the unquoted Lawrie Group helped. Lawrie, controlled by the Camellia investment group, lifted its Linton holding to 64.67 per cent. Some wonder whether the Camellia spread is to be streamlined, with a bid for Linton the first move.
The FT-SE 100 index fell a further 29.7 points to 3,098.3 and the FT-SE 250 index 23.3 to 3,782.6. Turnover was 675.5 million shares with 25,790 deals recorded. The account ends on Friday with settlement on 3 May.
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