Market Report: Full house for Rank as shares soar on bid talk

RANK GROUP, the cinema-to-bingos conglomerate, won the stockmarket Oscar yesterday amid renewed hopes of a pounds 2bn-plus bid.

Shares in the owner of the Hard Rock Cafes and Odeon movie theatres soared a glitzy 15.5p to 239p in big volume of over 6.5m on whispers that a break- up bid was finally on its way. Well-informed dealers said that the perennial takeover target could fall to a management buyout offer financed by a UK venture capitalist or a US leveraged finance specialist.

A cash-rich British venture fund, such as Cinven or Candover, and American financial powerhouses such as KKR could be interested in taking Rank private. Trade bidders - like the Canadian giant Segram and some of the UK brewers - were also mentioned.

The hot gossipers speculated that Rank's long-suffering shareholders, which include the activist fund manager PDFM, will be happy to accept a cash bid north of 300p a share, valuing the leisure group at over pounds 2.3bn.

According to the rumour, the group's new chief executive, former Ladbroke man Mike Smith, will be asked to front the MBO with a brief to slim the company down after the completion of the deal.

Rank's new masters would probably want to dispose of the rather quaint Mecca bingo halls, Tom Cobleigh pubs, and even the Hard Rock burgerdromes. Butlins holidays and Grosvenor's provincial casinos could also go.

The disposals would leave Rank with a pile of of cash and a much-needed focus on its cinema operations, which include the Deluxe video duplication company, the Odeon chain and half of Universal Studios in the US.

The sell-off could also free up resources to expand in other areas such as the National Lottery. Rank was beaten by Camelot in the original auction and could return to the fray if the current operator is dropped at the end of its contract in 2001.

Yesterday, Camelot reported a 19 per cent fall in profits but shareholders Cadbury Schweppes, Racal Electronics and De La Rue did not budge. The chocolate group swirled 3.25p higher at 426.5p and Racal, results today, rose 10.5p to 386p. However, the day's jackpot went to De La Rue. The banknote printer scored a 17.5p advance to 319p - within a whisker of their 12-month high, despite a plunge in profits. Brokers said the earnings fall had been discounted and pointed to a brighter future for the troubled De La Rue.

The rest of the market finished modestly higher after a day of two halves. The FTSE 100 closed 23.8 up to 6250 after bouncing up and down at Wall Street's command. The US market's pre-weekend advance led the blue-chip index to a 128 point gain in the morning. But the rally ran out of steam when the Dow opened sharply lower after some interest rate-negative economic figures. The undercard was steadier, with the midcap finishing 28.6 better at 5667.7 and the Small Cap ending 2.9 up at 2549.6.

Rentokil Initial was in demand once again. The cleaning group mopped up a 12p rise to 264.75p as the recent slide tempted a few bargain hunters. Talk of a share buyback was also heard. The oxygen group BOC inhaled a 36.5p rise to 1,104.5p as dealers muttered that the multi-billion pound merger with US rival Praxair is back on.

Carlton shot to the top of the leaders' board after a Goldman Sachs buy note. The TV group was 27p higher to 524.5p after the broker praised the ONdigital venture with Granada, up 19p to 1,297p.

Analyst support also helped Rolls-Royce and Tesco. The jet-engine maker powered 10.5p ahead to 273p after HSBC said "strong buy". The supermarket moved 3.75p up to 185.5p as Credit Lyonnais pushed it ahead of Friday's annual meeting.

Pub groups were active. Allied Domecq sparkled 20.5p higher to a 12-month high of 619p despite denying talk of an imminent strike by Pernod. The market is convinced that the French drinks giant will move after the sale of Allied's pubs to Whitbread, up 18.5p to 1,129.5p.

Rival Diageo jumped 15.5p to 672p on hopes of news on its advertising programme, while Bass surged 15.5p to 936.5p on talk that it will bid for the bowling alleys owned by First Leisure, up 10.5p to 226p.

Drug stocks were not too excited by revived talk of a merger between Glaxo Wellcome and SmithKline Beecham. Traders paid more attention to a Morgan Stanley downgrade and Glaxo ended just 1p ahead to 1,753p, while SB fell 17.5p to 796.5p. AstraZeneca, down 40p to 2,441p also suffered from Morgan's bearishness.

Among the losers, COLT Telecom shed 44p to 1,274p on fading speculation of a bid from MCI Worldcom. AB Food fell 13.25p to 461.5p, despite share buying by the controlling Weston family, on fears of a European probe into the sugar market. Stagecoach travelled 3p lower to 203p amid worries that it might make a huge acquisition to avoid falling out of the FTSE 100 next week.

The car group Lex Service roared 30.5p ahead to 592p on talk of a pounds 900m bid from Ford. Blue Circle followed suit, cementing a 20p rise to 406.75p after two Greek buys, while Express Dairies jumped 5.5p to 118p after good results and the purchase of the UK unit of Irish rival Glanbia.

The inventions company BTG lost 14p to 251p amid rumours of a delay in some key contracts. Fading bid talk hit cement maker Rugby, down 4.5p to 108.5p and sausage-skin maker Devro, 5p off to 126.5p.

TV company GalaxyMedia was the star of the minnows, rising 7p to 39.5p after saying it will change the terms of the reverse takeover of programme producer Sport News Group. The stock was suspended after close until approval of the new terms.

Burnden Leisure lost 5.5p to 16.5p after its Bolton Wanderers failed to win promotion to football's top flight, while electronic parts distributor Northamber fell 31.5p to 97.5p after a profit warning.



GILTS INDEX: 106.52 -0.87

WEST 175, the AIM-listed producer of cookery TV programmes, could soon be dishing out a couple of acquisitions. Shares in West, where entrepreneur John Gunn has a 23 per cent stake, jumped 12p to a 12-month peak of 123.5p. The firm recently bought large stakes in two New Zealand regional TV stations and it is believed that similar moves are on the cards. The stock was also boosted by news that Apax Partners has become the second market-maker in the shares.

SHIELD DIAGNOSTICS is thought to be close to a major deal.

The biotech company, which yesterday completed its merger with Norwegian rival Axis, should unveil a distribution agreement for its revolutionary test for heart disease over the next few weeks. Shield's partner is believed to be a large US pharmaceutical or biotechnology group. Shares in the UK company rose 7.5p to 442.5p in anticipation of the deal.

Suggested Topics
Start your day with The Independent, sign up for daily news emails
There will be a chance to bid for a rare example of the SAS Diary, collated by a former member of the regiment in the aftermath of World War II but only published – in a limited run of just 5,000 – in 2011
charity appealTime is running out to secure your favourite lot as our auction closes at 2pm today
File: James Woods attends the 52nd New York Film Festival at Walter Reade Theater on September 27, 2014
peopleActor was tweeting in wake of NYPD police shooting
Martin Skrtel heads in the dramatic equaliser
SPORTLiverpool vs Arsenal match report: Bandaged Martin Skrtel heads home in the 97th-minute
Billie Whitelaw was best known for her close collaboration with playwright Samuel Beckett, here performing in a Beckett Trilogy at The Riverside Studios, Hammersmith
people'Omen' star was best known for stage work with Samuel Beckett
ebooksA year of political gossip, levity and intrigue from the sharpest pen in Westminster
Latest stories from i100
Have you tried new the Independent Digital Edition apps?
Independent Dating

By clicking 'Search' you
are agreeing to our
Terms of Use.

iJobs Job Widget
iJobs Money & Business

Carlton Senior Appointments: Private Banking Manager - Intl Bank - Los Angeles

$200 - $350 per annum: Carlton Senior Appointments: Managing Producer – Office...

Carlton Senior Appointments: San Fran - Investment Advisor – Ind Advisory Firm

$125 - $225 per annum: Carlton Senior Appointments: San Fran - Investment Advi...

Sheridan Maine: Commercial Finance Manager

Up to £70,000 per annum + benefits: Sheridan Maine: Are you a qualified accoun...

Sheridan Maine: Regulatory Reporting Accountant

Up to £65,000 per annum + benefits: Sheridan Maine: Are you a qualified accoun...

Day In a Page

Surrounded by high-rise flats is a little house filled with Lebanon’s history - clocks, rifles, frogmen’s uniforms and colonial helmets

Clocks, rifles, swords, frogmen’s uniforms

Surrounded by high-rise flats is a little house filled with Lebanon’s history
Return to Gaza: Four months on, the wounds left by Israel's bombardment have not yet healed

Four months after the bombardment, Gaza’s wounds are yet to heal

Kim Sengupta is reunited with a man whose plight mirrors the suffering of the Palestinian people
Gastric surgery: Is it really the answer to the UK's obesity epidemic?

Is gastric surgery really the answer to the UK's obesity epidemic?

Critics argue that it’s crazy to operate on healthy people just to stop them eating
Homeless Veterans appeal: Christmas charity auction Part 2 - now LIVE

Homeless Veterans appeal: Christmas charity auction

Bid on original art, or trips of a lifetime to Africa or the 'Corrie' set, and help Homeless Veterans
Pantomime rings the changes to welcome autistic theatre-goers

Autism-friendly theatre

Pantomime leads the pack in quest to welcome all
The week Hollywood got scared and had to grow up a bit

The week Hollywood got scared and had to grow up a bit

Sony suffered a chorus of disapproval after it withdrew 'The Interview', but it's not too late for it to take a stand, says Joan Smith
From Widow Twankey to Mother Goose, how do the men who play panto dames get themselves ready for the performance of a lifetime?

Panto dames: before and after

From Widow Twankey to Mother Goose, how do the men who play panto dames get themselves ready for the performance of a lifetime?
Thirties murder mystery novel is surprise runaway Christmas hit

Thirties murder mystery novel is surprise runaway Christmas hit

Booksellers say readers are turning away from dark modern thrillers and back to the golden age of crime writing
Anne-Marie Huby: 'Charities deserve the best,' says founder of JustGiving

Anne-Marie Huby: 'Charities deserve the best'

Ten million of us have used the JustGiving website to donate to good causes. Its co-founder says that being dynamic is as important as being kind
The botanist who hunts for giant trees at Kew Gardens

The man who hunts giants

A Kew Gardens botanist has found 25 new large tree species - and he's sure there are more out there
The 12 ways of Christmas: Spare a thought for those who will be working to keep others safe during the festive season

The 12 ways of Christmas

We speak to a dozen people who will be working to keep others safe, happy and healthy over the holidays
Birdwatching men have a lot in common with their feathered friends, new study shows

The male exhibits strange behaviour

A new study shows that birdwatching men have a lot in common with their feathered friends...
Diaries of Evelyn Waugh, Virginia Woolf and Noël Coward reveal how they coped with the December blues

Famous diaries: Christmas week in history

Noël Coward parties into the night, Alan Clark bemoans the cost of servants, Evelyn Waugh ponders his drinking…
From noble to narky, the fall of the open letter

From noble to narky, the fall of the open letter

The great tradition of St Paul and Zola reached its nadir with a hungry worker's rant to Russell Brand, says DJ Taylor
A Christmas ghost story by Alison Moore: A prodigal daughter has a breakthrough

A Christmas ghost story by Alison Moore

The story was published earlier this month in 'Poor Souls' Light: Seven Curious Tales'