Market report: Hillsdown's splinter plan lures the predators

HILLSDOWN Holdings may not be allowed to undertake its promised three-way split. In busy trading the shares rose 4p to 198.5p, a 12-month high, as speculators banked on Unigate or others bidding for all or part of the group before the demerger scheme is finalised.

Early this month Hillsdown admitted its house- building, food and furniture blend was not working and its best way forward was to break itself into three. Each of the divisions is capable of attracting a predator but it is the food operation which seems destined to be swallowed quickly.

Unigate, down 2p at 654p on Lehman Brothers caution, has admitted its interest in the group, particularly the food side. It made a 207p a share offer which was rejected.

There is a strong belief Unigate will return with a 215p offer. If it is successful it will probably sell on the house-building and furniture activities.

Northern Foods, unchanged at 216.5p, is believed to be keen on the food operations but may not be prepared to consider the house-building and furniture sides.

The rest of the stock market experienced a lacklustre session although supporting shares were once again allowed to make the running. Footsie ended 15.1 points higher at 5,970.7. At one time it was up 87.

The mid cap index hardened 23.1 to a new 5,920.9 peak and the small cap index was also at a high, up 4.3 at 2,792.7.

National Power, up 19p to 579p, was charged by talk of a pounds 10bn US-led consortium bid. There was also a two-way pull with SG Securities cautious and Credit Lyonnais positive.

Mirror, the newspaper group, jumped 25.5p to 243.5p on the German interest and the admission of merger talks, now ended, with the Trinity newspaper group. The Mirror excitement pulled other media shares higher with Pearson up 48p to 1,111p and United News & Media 36.5p to 889.5p. Pearson also scored from talk of a US listing.

Cadbury Schweppes was up 25p to 957p on talk of Lehman Brothers interest and Ladbroke rose 6p to 351p, reflecting renewed suggestions of a deal with Hilton Hotels of the US and Dresdner Kleinwort Benson interest.

Halifax was boosted 32.5p to 875p as US buying materialised ahead of the shares inclusion in the Morgan Stanley share index.

Billiton, the resources group, fell 5p to 156p as it became apparent DKB had been unable to sell-on around half the shares it acquired when a South African mutual fund cut its stake.

Transport shares, riding high lately, retreated as DKB made cautious noises. Stagecoach fell 23.5p to 1,344p.

More, the advertising group. edged ahead 16p to 1,138.5p after the seemingly defeated French bidder, Decaux, said it would make a 1,120p a share offer if its bid was cleared.

PhoneLink added 5.5p to 50.5p on speculation of closer ties, possible even a merger, with its Dutch associate Reggeborgh Participates which has 7.9 per cent.

MFI, off 3p to 76.5p and Carpetright, 8p to 323p, continued to suffer on the retail front.

British Steel hardened 2.75p to 163.5p as Salomon Smith Barney signalled a 190p target and Lasmo, with a new Moroccan licence, rose 8.5p to 297.5p with Morgan Stanley suggesting a 350p price.

Greenwich Resources, one of the Falkland Island oil plays, rose 4p to 40.5p with gold concessions in Venezuela adding to the cheer. Desire Petroleum ended 30p up at 445p and Westmount improved 30p to 275p.

Bula held at 1p. It is placing 35.5 million new shares at 1.127p each lifting the number of shares in circulation to a remarkable 1.65 billion; the company is capitalised at around pounds 20.4m.

Dragon Oil fell 2p to 46p on worries about the planned sale of 46 per cent of the capital.

Charlton Athletic scored a 15p gain to an 80p peak following its elevation to the Premiership but Sunderland, the beaten play-off finalists, crashed 97.5p to 415p.

United Biscuits softened 1p to 279p. It is expected to hold an investment presentation this week. Inchcape, on CSFB support, put on 3.5p to 233.5p.

Ionica, the telephone group seeking a supportive investor, seemed to have difficulty even getting a dialling tone. The shares, once 421p, fell 11.5p to 24.5p in often busy trading.

PowerScreen, the troubled engineer, fell 36p to 133.5p after a large trade at 133p.

A profits warning lowered Capital Industries 16.5p to 147.5p.