Market Report: High-priced trades stir up interest in Ladbroke
Friday 15 May 1998
The stock market has waited for more than a year for Hilton Hotel Corporation to build a share stake.
HHC operates the US Hilton hotels spread with Ladbroke controlling the portfolio in the rest of the world. As part of an alliance established between HHC and Ladbroke the Americans promised to build a 5 per cent interest in the British group.
The Americans were expected to rely on the issue of new shares. But the latest shenanigans could indicate they have decided to buy through the stock market.
The two trades, thought to involve Dresdner Kleinwort Benson, were for 1 million and 4.25 million shares. They were completed at 340p when the price was nearer 325p.
The consequent interest was enough to make Ladbroke the most actively traded blue chip, with Seaq putting volume at 17.7 million.
The leisure group is, however, still below its 358p peak hit earlier this year. A year ago the shares were 240p.
This week Ladbroke produced a confident trading statement although sentiment had earlier been dented by the referral to the Monopolies and Mergers Commission of the acquisition of the Coral betting shops chain.
Takeover rumours have occasionally wafted around the company. At one time Bass, the brewing and hotel group, was regarded as a possible predator. But its sale of the Coral business would suggest it is no longer interested.
Footsie ended 24.4 points off at 5,948.5; just 30 minutes before the close the fall was 54.6. The worsening situation in Asia, particularly Indonesia, and a resurrection of higher interest rate fears tormented the market. An uneven New York display was another inhibiting influence. Still, the two main supporting indices blissfully ignored such restraints and moved to yet new highs.
Oil exploration shares flared on positive comments from Morgan Stanley and hopes of upbeat drilling reports in the next few weeks.
Morgan's Nick Antill highlighted the possibility of more consolidation and is thought to have suggested a 650p price for Enterprise Oil; 320p for Lasmo; 330p for Hardy Oil & Gas and 70p for Monument Oil & Gas.
His projections lifted Enterprise 22p to 597p; Lasmo 9.25p to 291p; Hardy 15.5p to 273.5p and Monument 1.75p to 63.5p.
Monument said its rights issue had achieved a 95.4 per cent take-up and long time shareholder Electrafina of Belgium now has 26.2 per cent.
Colt Telecom was another to collect a Morgan boost. The shares jumped 257.5p to a 1,940p peak after Morgan set a 2,250p target price target.
Next, the fashion chain rocked by a profits warning in March, fell 7p to 499.5p with finance director David Keens said to be alerting analysts that women's wear sales remained sluggish and overstocking problems had yet to be overcome.
Cadbury Schweppes hardened 17p to 897p as Merrill Lynch repeated its 1,000p target, and Hillsdown Holdings added 5.5p to 186.5p on takeover talk.
Suggestions of a deal between Powell Duffryn, off 10p at 600p, and Mersey Docks, down 6.5p at 602.5p, appeared to be wide of the mark.
Matalan, the retailer, made a strong debut, closing at 275.5p from a 235p placing.
Arlen, the electrical equipment group, gained 4p to 34.25p after duly confirming it planned a number of disposals; Trust Motor advanced 3p to 181p as another bid approach was received. The company has had unsuccessful negotiations over a sale to its management. On Tuesday Nicholas Barr, who led the abortive buyout, quit.
Air London, the air charter broker which has denied any takeover approach, climbed another 40p to 440p, a peak. The shares have nearly doubled since February.
The flame at Ronson, the lighter group, is just about flickering. It expects losses to hit pounds 11.5m; the shares plunged 1.25p (after 2.75p) to 5.75p.
Computer shares had another strong session , gaining 2 per cent. Micro Focus, on figures, jumped 70p to 645p; Parity 36.5p to 821.5p and Admiral 25p to 1,107.5p. But MMT Computing dropped 20p to 1,287.5p after chairman Michael Tilbrook sold 500,000 shares at 1,275p. He is left with 4.7 per cent.
And a profits warnings hit Illion, off 76p at 112.5p.
Distributor Abacus Polar was another mauled by a profits warning, falling 29.5p to 96.5p. Ferguson International tumbled 11.5p to 93.5p in response to a profits slump.
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