Funnybones dealers renamed the telecom giant Cable and Weightless after the stock soared 81p to 974.5p in very good volume of more than 26 million shares.
The higher-than-usual turnover prompted several market watchers to unearth stories of a big deal. They noted the C&W rise came despite a fall in the overall market and other telecom stocks.
Sector leader Vodafone AirTouch shed 14.75p to 312p after Mannesmann said the company is worth 350 euros compared with Vodafone's 253 euro- per-share bid. Rival BT lost 668p to 1,358.5p on profit-taking. These falls made C&W's strength look even more suspicious. According to market sages it is only a matter of time before a European or US rival launches an offer for the group. Usual suspects such as Deutsche Telekom, France Telecom and US giants MCI and Bell Atlantic are said to have been sniffing around for a while and something could break in the near future.
A related rumour attributed C&W's move to the likelihood of a disposal of its strategic stake in Hong Kong Telecom. Smaller rivals Energis, 142p higher to 2569p and COLT Telecom, 13p better at 2,708p, were boosted by bid talk and a positive recommendation from heavyweight broker Salomon Smith Barney.
Telecom equipment maker Marconi, the old GEC, rang up a 92.5p rise to a best-ever 1,090.5p on growing bid talk.
The poor showing by the big telecoms and the banks contributed to the market's third consecutive fall. The FTSE 100 dipped 41.5 to 6619.4. Lingering fears of a rate hike today compounded the blue-chip plight and not even a firm opening in the Dow was able to save them.
Volume was a hefty 2 billion shares as brokers tidied up their books with some big placings.
The struggling videogame retailer Electronics Boutique fell 2.25p to a yearly low 37.75p as broker Merrill Lynch sold a packet of over 16m shares, around 4.5 per cent of the company, below the market price. Dealers speculated that following EB's recent profit warning and ejection from the FTSE 250, its US namesake Electronics Boutique had reduced its 19 per cent stake and there could be more to come. Other mooted sellers were fund managers Wenger and Hill Samuel.
EB's misery was compounded by whispers that game-maker Eidos, up 95p to 5980p, was preparing to by-pass retailers and sell Lara Croft & co. on the Net. Chemical underperformer Hickson International, 2p lower to 34p, was also hit by a share sale. Shareholder Britannic Assurance was said to have got rid of its 8 per cent stake at a cut-price 29p. Sugar maker Tate & Lyle lost a bitter 7.75p to 417.5p after a 2.4 per cent stake changed hands in a rumoured derivatives-linked trade.
Away from the share sales, media stocks continued to shine. Music group EMI climbed 51p to 610p as market tuned in to rehashed rumours of a bid from a foreign giant. Talk of booming sales of on-line music also helped. Pearson, the Financial Times publisher, gained another 143p to a best- ever 1,781p on vague talk of a strike from Rupert Murdoch's News Corporation or of a tie-up with US web behemoth AOL. The whispers dwarfed news of the disposal of some of Pearson's FT Business publications to smaller rival Informa, up 12p to an all-time high of 615.5p.
Fellow publisher EMAP jumped 88p to 1311p as bid talk refused to die down. Satellite broadcaster BSkyB beamed 62p higher to a record 875.5p on continued talk that French conglomerate Vivendi could up its stake to implement a merger between Sky and Canal+, whose shares in Paris soared.
Kingfisher, 46p higher to 608.5p, sparkled among retailers after an upbeat trading update. No such luck for Reckitt Benckiser. Confirmation of a profit warning with the trading statement pushed the maker of Lemsip and Finish 128.5p lower to a five-year nadir of 593.5p. Smaller rival McBride held at 76.5p on recent directors' share-buying and talk of good sales. Banks were in the doldrums, led by Lloyds TSB, down 38.5p to 725p, after Merrill cut forecasts. Abbey National, down 43p to 976p, and Barclays, 69p lower to 1619p, were also weak. A two-way pull left British Aerospace 5.25p lower to 406.5p in heavy volume amid talk of deals in the near term.
A series of nasty falls in front-line stocks pushed the FTSE 250 index 29.5 points down to 6246.6. Anglian Water followed the sector trend, gushing 80.5p lower to 520p after posting poor interims and passing the dividend. Hyder, interims today, should be equally poor and could even unveil a rights issue. The shares lost 14.5p to 352.5p. Rivals Severn Trent, 49.5p lower to 651.5p, United Utilities, 38.5p down to 517.5p and Thames Water, 47.5p to 764p, drowned in the same flood of selling.
The pump-maker Weir sloshed 32.5p lower to 224p after a surprise profit warning, while palm-top computer maker Psion, down a huge 367.5p to 2638p, was destroyed by the Internet tie-up between Ericsonn and Microsoft.
Drug group Powderject fell another 62.5p to 767.5p after Tuesday's product delays despite budding bid rumours.
But phone parts maker Filtronic rebounded from Tuesday's profits alert with a 85p rise to 1917.5p. Meetings with institutions and whispers of licensing deals sent inventions group BTG 82.5p higher to a best-ever 890p.
The Small Cap ignored its peers' woes and climbed 20.6 to another record of 2983.4.
Irish telecom group Stentor soared 39p to 92.5p after a deal with US giant Cisco. Richard Branson's cosmetics and clothing chain Victory Corporation firmed 3p to 8.75p amid talk of an imminent deal, while software tiddler Staffware jumped 180p to 995p on talk of an Net tie-up.
SDL, the provider of software to translate web sites, followed up its fantastic market debut with another 86.5p rise to 474p. Cash shell Firth Holdings came back from suspension with a 6p fall to 13p despite rumours of a reverse takeover.
The completion of a rights issue sent trade group Middlesex Holdings 1.05p up to 2.95p in gigantic volume.
SEAQ VOLUME: 2bn
SEAQ TRADES: 121,187
GILTS INDEX: 106.33 +0.01
BIRCHIN International, formerly financial publisher Rushmere Wynne, is doing well. Transformed by management guru Dr Colyn Gardner into an operator of luxury training centres, it is close to completing a successful pounds 4.82m cash call. The proceeds will be used to buy two mansions from ICI. Other whispers suggest Birchin, whose shares have gone from 0.75p to 2.25p in a month, could be a takeover target.
ANOTHER DAY, another rumour of a Net deal. Yesterday it was the turn of computer services group Azlan. The stock soared 19p to a 12-month high of 136.5p amid talk that it could soon jump on the web bandwagon. According to anoraky dealers, Azlan could be close to a major deal involving a large e-commerce provider. A web contract could be the icing on the cake for Azlan, whose shares have more than doubled from a yearly low of 52.5p in March.