Market Report: Hint of anxiety on Zeneca deal

THERE WAS just a hint of anxiety in the stock market about the pounds 48bn drugs merger between Astra of Sweden and Zeneca.

A Swedish pension fund is due to decide next week whether to support the deal. It has around 4 per cent of the Astra capital.

If it should come out against the merger, there are worries that, with Astra's small shareholders, a blocking vote could materialise, as Zeneca needs at least 90 per cent of the capital to win the day.

Sources close to Zeneca believe such an event is highlyunlikely. It is pointed out that the pension fund invariably follows the wishes of a company's employees and the Astra workforce is in favour of the merger.

The fund was supportive of an earlier big drugs get together, the American- Swedish alliance which resulted in Pharmacia & Upjohn. It has come out against major deals - Renault and Volvo was one - but then the car workers were far from happy about the suggested merger.

It is thought many small Astra shareholders will accept the terms, although their lobbying organisation is against it.

The giant merger is due to be completed next month and despite the scare stories from Sweden is expected to go through. The two companies have seen more than 150 institutional investors in the past few weeks and it is thought they received encouraging responses.

In a letter to its shareholders, which could indicate some anxiety about their attitude, Astra said the Zeneca deal was the best way forward and could unlock the US market for its drugs.

Stephen Ewing at WestLB Panmure said Astra shareholders "would be mad" not to accept the deal. Zeneca shares firmed 17p to 2,629p in busy trading.

The rest of the market failed to hold best levels. At one time, on the back of the overnight Wall Street surge, Footsie was up 115 points to 6,185.2, just 10.4 below its trading peak. It closed 85.3 higher at 6,155.2, only 23.8 below the all-time high, hit last July.

Results also helped the early progress. National Westminster Bank was at one time up 104p but had to settle for a 45p gain at 1,319p. Unilever, on its pounds 5bn handout, was treated even more harshly. At one time up 33p, it ended 1p lower at 624.5p as some cash-rich institutions wondered whether they really wanted yet another cash injection.

Railtrack, ahead of tomorrow's railway summit, reversed a further 29p to 1,403p.

Corporate action was again a major influence. BSkyB rose 18.25p (after 31.5p) to 536.75p on the possibility of a link, perhaps even a merger, with Canal+, the French pay-TV group.

Coutts Consulting, where bid talks were confirmed, rose 7p to 35.5p and BS, the old Bristol Stadium, raced ahead 25p to 145p after reporting bid negotiations were taking place.

Allied Leisure, up 2p to 27.5p, and European Leisure, 1.5p at 70p, at last admitted talking merger - stories of a deal were circulating last month - and printer Wace inked in a 5p gain to 76p as Allied Graphics, a US group, said it might counter an agreed offer from another American business, Schwak. The bidding war started when Photobition made an offer which Schwak topped with a pounds 94.6m shot.

Kenwood Appliances rose 5p to 99p as speculators prowled, with some aggressive funds increasing their holdings, and blistered sausage-skin group Devro climbed away from its 12-month low, up 18.5p to 163p, with a little help from the boys in dark glasses.

Arm, the chip maker that came to market nearly a year ago, rose a further 55p to a 2,040p peak following an investment lunch hosted by ABN Amro. Acorn, the computer group nursing a big Arm stake which it plans to sell, firmed 5p to 163.5p.

Ladbroke, up 1.75p to 272p, was also helped on its way by ABN, and Vodafone improved 33p to 1,172p as Merrill Lynch lifted its profits expectations.

Gallaher was puffed 3.5p higher to 423p with BT Alex.Brown hanging a buy sign on the shares.

On the under-card, Drew Scientific improved 21p to 97.5p after it obtained the approval of the American Food and Drug Administration for a heart disease test.

NXT, the maker of flat panel loudspeakers, jumped 52.5p to 481.5p in busy trading, after saying it had signed 24 new licensees in the past four months. The group, the old Verity, says it has developed a new transparent, wafer-thin speaker.

Easynet climbed 26p to 261p after linking with Eidos, the computer games group, to provide an Internet service caused Eidosnet.

Profits warnings lowered Total Office 14p to 38.5p and Oxford Asymmetry showed once again that the market is not prepared to take prisoners when its forecast profits failed to impress. The highly rated shares lost 59p to 499p.

SEAQ VOLUME: 922.5 million



CALLUNA, the computer group, was the most actively traded under- card share, with Seaq putting volume 9.7 million as the price fell 4p to 23p. After the close came the reason; year's results will be "substantially below" market expectations and there was a hint that a cash call was being considered. The group, which has a computer security system, hit 38.5p last summer and has been 96p.

SHARES OF Waterfall, the bars and snooker clubs chain, held at 59p with little investment interest apparent. Yet it could soon be engulfed in bid action if the confirmed Allied Leisure/European Leisure talks produce a merger. EuroLeisure has a hostile 23 per cent stake in Waterfall, which last year had abortive merger talks with the Springwood leisure group. Waterfall touched 108p last year.

Start your day with The Independent, sign up for daily news emails
ebooksAn introduction to the ground rules of British democracy
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

SThree: Experienced Recruitment Consultant

£20000 - £40000 per annum + OTE + Incentives + Benefits: SThree: Established f...

SThree: Trainee Recruitment Consultant

£20000 - £25000 per annum + OTE 40/45k + INCENTIVES + BENEFITS: SThree: The su...

Recruitment Genius: Collections Agent

£14000 - £16000 per annum: Recruitment Genius: This company was established in...

SThree: Trainee Recruitment Consultant

£20000 - £25000 per annum + OTE 40k: SThree: SThree are a global FTSE 250 busi...

Day In a Page

Refugee crisis: David Cameron lowered the flag for the dead king of Saudi Arabia - will he do the same honour for little Aylan Kurdi?

Cameron lowered the flag for the dead king of Saudi Arabia...

But will he do the same honour for little Aylan Kurdi, asks Robert Fisk
Our leaders lack courage in this refugee crisis. We are shamed by our European neighbours

Our leaders lack courage in this refugee crisis. We are shamed by our European neighbours

Humanity must be at the heart of politics, says Jeremy Corbyn
Joe Biden's 'tease tour': Could the US Vice-President be testing the water for a presidential run?

Joe Biden's 'tease tour'

Could the US Vice-President be testing the water for a presidential run?
Britain's 24-hour culture: With the 'leisured society' a distant dream we're working longer and less regular hours than ever

Britain's 24-hour culture

With the 'leisured society' a distant dream we're working longer and less regular hours than ever
Diplomacy board game: Treachery is the way to win - which makes it just like the real thing

The addictive nature of Diplomacy

Bullying, betrayal, aggression – it may be just a board game, but the family that plays Diplomacy may never look at each other in the same way again
Lady Chatterley's Lover: Racy underwear for fans of DH Lawrence's equally racy tome

Fashion: Ooh, Lady Chatterley!

Take inspiration from DH Lawrence's racy tome with equally racy underwear
8 best children's clocks

Tick-tock: 8 best children's clocks

Whether you’re teaching them to tell the time or putting the finishing touches to a nursery, there’s a ticker for that
Charlie Austin: Queens Park Rangers striker says ‘If the move is not right, I’m not going’

Charlie Austin: ‘If the move is not right, I’m not going’

After hitting 18 goals in the Premier League last season, the QPR striker was the great non-deal of transfer deadline day. But he says he'd preferred another shot at promotion
Isis profits from destruction of antiquities by selling relics to dealers - and then blowing up the buildings they come from to conceal the evidence of looting

How Isis profits from destruction of antiquities

Robert Fisk on the terrorist group's manipulation of the market to increase the price of artefacts
Labour leadership: Andy Burnham urges Jeremy Corbyn voters to think again in last-minute plea

'If we lose touch we’ll end up with two decades of the Tories'

In an exclusive interview, Andy Burnham urges Jeremy Corbyn voters to think again in last-minute plea
Tunisia fears its Arab Spring could be reversed as the new regime becomes as intolerant of dissent as its predecessor

The Arab Spring reversed

Tunisian protesters fear that a new law will whitewash corrupt businessmen and officials, but they are finding that the new regime is becoming as intolerant of dissent as its predecessor
King Arthur: Legendary figure was real and lived most of his life in Strathclyde, academic claims

Academic claims King Arthur was real - and reveals where he lived

Dr Andrew Breeze says the legendary figure did exist – but was a general, not a king
Who is Oliver Bonas and how has he captured middle-class hearts?

Who is Oliver Bonas?

It's the first high-street store to pay its staff the living wage, and it saw out the recession in style
Earth has 'lost more than half its trees' since humans first started cutting them down

Axe-wielding Man fells half the world’s trees – leaving us just 422 each

However, the number of trees may be eight times higher than previously thought
60 years of Scalextric: Model cars are now stuffed with as much tech as real ones

60 years of Scalextric

Model cars are now stuffed with as much tech as real ones