The US investment house is believed to have acquired options covering 1.5 million shares and was rumoured to be prepared to double its interest.
With at least one other buyer following the Morgan example, speculation was soon smouldering around the underlying Fisons shares, up 10p at 246p.
The rumour mill was quickly pressed into action. The suggestion that Hanson would pounce on the drugs group was resurrected and others opted for a quick move by Zeneca once it is demerged from Imperial Chemical Industries.
ICI, down 26p to 1,145p on the story, is due to report its 1992 figures later this month. At the same time it is expected to announce details of the separation of Zeneca, its drugs division.
There is a growing suspicion that ICI will avoid a straightforward split of its residual chemical operation and the drugs division.
A deal that would allow an overseas group to buy into Zeneca is one suggestion. Another is a merger with Fisons, creating a group that would have a significant international presence.
The idea that fast-growing Medeva would attempt a reverse takeover, accompanied by a rights issue, also resurfaced. So did talk of a deal with the French group Rhone-Poulenc Rorer.
The latest outbreak of Fisons speculation occurred on a day the market drifted in the wake of the Commercial Union pounds 428m rights issue and the conviction that further heavy cash calls are being prepared.
CU took the rights convincingly in its stride. The shares fell to 580p on the announcement, quickly recovering to close 12p up at 610p.
General Accident, down 26p at 569p, and Legal & General, 14p lower at 431p, remain rights candidates. Barclays, Lloyds and National Westminster have also been thrust into the rights debate together with a spread of groups, ranging from British Petroleum to Glaxo Holdings.
Trafalgar House, up 2p at 88.5p, is expected today to announce a one-for-two call at 62p to raise about pounds 150m.
Reuters, the information group, was hit by US selling following Tuesday's figures. The shares dropped 66p to 1,316p, with UBS Phillips & Drew apparently leading the London bears and Barclays de Zoete Wedd saying the shares were a buy - at l,300p. SG Warburg also put a buy tag on the shares.
Fisons was not the only blue chip to feel the weight of takeover speculation.
The banking groups Standard Chartered and TSB Group made headway, with Lloyds still the favourite to pounce on one of them. Lloyds' results are due tomorrow. Standard put on 21p to 631p as buyers moved in towards the close. TSB rose 9.5p to 171p.
Vickers, the engineering and Rolls-Royce cars group, jumped 8p to 132p on talk of a bid with Charter Consolidated, flush with the proceeds of its Johnson Matthey stake sale, put forward as the likely predator.
Storehouse suffered again from the departure of chief executive David Dworkin. The shares fell 10p to 184p, a 21p decline since the Dworkin-is-a-walkin' rumour started on Tuesday.
Albert Fisher, the food group, improved 3p to 69p as the hovering line of 5.5 million shares was at last taken up. But a 2.5 million line of Hanson, down 1p to 256.5p, continued to overhang the proceedings.
Food retailers found support, with Argyll Group winning approval from an array of investment houses. Warburg drew attention to the sector, suggesting it was oversold on rights issue rumours and what it regarded as unfounded fears of VAT being imposed on food.
ML Laboratories had a torrid session, falling 77p to 1,108p. Milner Laboratories sold 525,000 shares through Hoare Govett and Panmure Gordon. Kevin Leech, ML's chairman, is a director of Milner. There was talk of another 1 million shares seeking a home at 1,100p.
Simon Engineering retreated 20p to 119p as it disclosed a pounds 5m loss on a liner board paper mill being built at Jacksonville, Florida.
National Home Loans firmed 0.75p to 6.25p following its decision to repay two Deutschmark loans on schedule in June.
Tadpole Technology continued to encounter selling pressure as investors, who have seen the shares run up from a 65p launch price, took profits. The shares closed above their worst, down 9p at 272p. Acorn Computers rallied 14p to 129p.
Shares remained weighed down by rights issue worries yesterday. The FT-SE 100 index ended 14.9 points (after 21.1) lower at 2,816.4. The FT-SE 250 index lost 17.9 points to 3,001.9. Turnover was 616.1 million shares, with 30,665 bargains recorded. Government stocks, meanwhile, were firm
The size of the Kingfisher rights issue needed to finance a pounds 1bn takeover of the French group Darty continues to exercise the City's mind. Barclays de Zoete Wedd warns that the retail group will have to write off pounds 880m goodwill on the deal and estimates it will raise pounds 320m from shareholders and issue a similar amount to the vendors. Kingfisher's shares closed down 10p at 516p.
The yearly trek by London-based drink analysts to the Sunderland headquarters of Vaux Group has led to profit downgradings. Kleinwort Benson has trimmed its forecast from pounds 27.5m to pounds 26.7p, with earnings per share falling more steeply from 18.9p to 14.8p. The dividend is expected to be unchanged. The shares fell 7p to 218p with Kleinwort saying sell.
Could gold shares, for long largely ignored, be due for a rally? Prices moved ahead strongly yesterday driven by the scent of rising inflation and the high yields many of the established South African mines enjoy. The gold price, however, rose only dollars 1.5 to dollars 330 an ounce, although New York closed at dollars 333. Among the golds ahead were Kinrose, Southvaal and Vaal Reefs.Reuse content