Market Report: Footsie swings as bid fever runs rampant

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The Independent Online
OLD FASHIONED takeover fever gripped the stock market. A steady flow of deals - and rumours of more to come - provided much of the action as Footsie, in a volatile session, swung more than 150 points.

Four groups admitted for the first time that they were involved in corporate action, several others were caught in bid speculation, and there were rumblings in some established takeover situations.

Electra, the investment trust, confirmed it had been approached by 3i group and its shares spiralled 119p to 682.5p; 3i firmed 14p to 631p. Adwest Automotives revealed it was involved in talks that could lead to a 150p a share offer and jumped 60.5p to 134p.

Condom maker LIG received an "unsolicited" approach, jumping 35p to 163.5p, and Gremlin, a computer games group, surged 26p to 100p after spotting possible predators.

And then, after the market closed, it became apparent that the rumoured Federal-Mogul strike at LucasVarity, the car components group, could be near. Lucas had contented itself with repeating an earlier statement that strategic discussions with various groups continued. Then Federal, the US group which took over T&N, said it was considering a 280p a share offer but Lucas refused to talk. Strong through the session, Lucas ended 29.5p up at 244p.

Mirror, the newspaper publisher where a boardroom split has appeared as one offer remains on the table and others hover, rose 9p to 207p; Trinity, a rejected suitor, hardened 22p to 449.5p.

Portsmouth & Sunderland Newspapers jumped 150p to 1,650p after admitting it had received approaches following the smash-and-grab bid from Johnston Press.

GRE, the insurer, added 9.25p to 378.5p as the market awaited the Royal & SunAlliance terms. Royal, seemingly on hopes that its not particularly popular offer will be topped, rose 19.25p to 484.5p.

Field, a packaging group, improved 21p to 337.5p as a second US offer was signalled. The company has agreed a 320p a share bid from Chesapeake; now Shorewood Packaging may counter.

House of Fraser jumped 8p to 92p with rumours persisting of a strike. Shami Ahmed, creator of the Joe Bloggs jeans empire, is circling with Chelsfield property group, which firmed 12.5p to 276p.

Securicor, as the rumour was revived it was in talks with BT over its Cellnet stake, gained 17.75p to 579.25p.

Other stories included a GEC bid for Philips' and Siemens' medical electronic operations, and of a BG assault on Monument Oil & Gas, up 2.25p to 36p. The speculation also engulfed Telspec, an electronics group that advanced 11.5p to 69.5p, and Vaux, the hotelier on the verge of selling its breweries, 11p at 244.5p.

Servisair, the aircraft support group, was little changed at 216p after Framlington, one of its main shareholders, lifted its stake to 9.76 per cent, buying shares above the 200p level of the Amey offer.

Sears was little changed at 356.5p as Philip Green's vehicle moved to 52.9 per cent of the shares but, underlining that not all bid stories end happily, the Lady in Leisure fitness group fell 27.5p to 95p against a 246.5p peak.

Footsie ended 19.7 points higher at 5,880.9. Supporting indices were mixed, with bid action helping the mid cap to a 6.1-point gain to 4,835.2 but the small cap relapsed a further 1.7 points to 2,091.4.

Cable & Wireless Communications gained 27.5p to 780p as Morgan Stanley lifted its target price to 850p, but its Cable & Wireless parent softened 7.5p to 849p although Henderson Crosthwaite calculated that even without Hong Kong Telecom the shares were worth 820p.

Banks were weak. Although a windfall tax on profits was ruled out, the market offered little support with Royal Bank of Scotland down 47p to 1,025.5p and National Westminster Bank 38p to 1,110p. HSBC had the additional constraint of unease over China as well as Hong Kong's banks and lost 43p to 1,606p.

Thistle Hotels fell 6p to 106.5p. Worries about its involvement in London hotels seemed to do the damage.

Jarvis, the construction and rail maintenance group, gained 23.5p to 570p. It met analysts on Friday and is due to see fund managers. Kwik Fit, the tyres and exhausts chain, rose 26.5p to 417.5p with Warburg Dillon Read suggesting 500p.

Rage Software improved a further 2.5p (after 4p) to 14.75p with Seaq putting turnover at 28.6 million shares. The company is negotiating with Microsoft about distributing its latest football game.

Internet interest was back, with InterX, the former Ideal Hardware, launching a new Internet service and gaining 42.5p to 372.5p. Geo Interactive, with the start of an e-mail service, was up 11.5p to 51.5p. On-Line gained 30p to 127.5p.

Struggling Laura Ashley, up 2.75p to 14.75p in brisk trading, was said to be the target of some recovery funds and Monsoon, the fashion chain, was in tatters as it produced its first profits fall for 13 years. The shares, floated at 198p less than a year ago, fell 7p to 46.5p, a low.

SEAQ VOLUME: 937.2m

SEAQ TRADES: 68,123

GILTS INDEX: 116.77 -0.40

HARD PRESSED Waverley Mining, where Ofex-traded Corporate Resolve is bidding for a stake, was the subject of three big trades, strengthening suspicions that a bid for full control is on the way.

Bank nominee companies were active: one picked up 4.11 per cent and another 6.93 per cent to take its interest to 11.53 per cent. And obscure Patersons of Greenoakhill acquired 13.03 per cent. Waverley shares held at 6.5p.

STOCKBROKER Redmayne Bentley has put the shares of Singer & Friedlander, one of the few London merchant banks not in foreign ownership, on its buy list.

The shares have underperformed both Schroders and Close Brothers, two other UK-owned investment banks, and its main rivals. Redmayne is shooting for profits of pounds 58.6m for last year and pounds 63m for this year. The shares are 101p against 185p last year.

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