While the market scored a victorious century, buyers kept Colt's line busy for most of the day and the stock ended 68p better at 1,403p, not far from its 1,437p all-time high.
The rumour doing the rounds is that Colt is lining up a merger with a rival to capitalise on its extraordinary success.
Floated three years ago at around pounds 250m, Colt has grown into a blue-chip with a market value of over pounds 8.5bn without posting a single penny in profit. The soaraway increase was due to a simple reason. Investors love the company's plans to link large European cities with a network of fibre-optic cables to offer phone and Internet services to business users and have piled into the loss-making group's shares.
Their faith may about to be rewarded. According to yesterday's whispers, Colt could be about to pull the trigger on a tie-up with a European or UK rival. The continental names in the frame are the usual German suspects: Deutsche Telekom and Mannesmann.
But the more interesting choice would be a link-up with Energis, up 54p to 1,727p. The UK business telecom group is believed to be building a stake in new entry Kingston Communications, up 6.5p to 334.5p and dealers believe a three-way merger is a possibility. Energis, Kingston and Colt are all in the high-margin business telephony and have complementary geographical strengths.
A combined group would have a sizeable presence in both the UK and European markets. Moreover, an all-British merger would be a bulwark against the predatory instincts of the likes of Deutsche Telekom, which has long been rumoured to be interested in Energis.
The cable groups vied with their telecom peers for the title of most bid-friendly sector. News that NTL could sell a minority stake to France Telecom and use the cash to bid for Cable & Wireless Communications caused a 23.5p-rise to to 720p in CWC's stock. The pounds 8bn price tag put on CWC sent rival and mooted merger partner Telewest Communications to the top of the FTSE 100 risers with a 26.25p jump to a best-ever 319.25p.
Retailers were also in the bid frame. Speculation that Kingfisher, down 8.5p to 721p, was to bid for Safeway, up 2.5p to 239p, was given another spin. A more intriguing whisper was that Kingfisher could bid for PC-seller Computacenter, up 36.5p to 567.5p, and add it to its Comet chain.
This rumour bonanza, combined with a benign set of US inflation data, triggered a stormy rally among blue-chips. The FTSE 100 closed 101.9 higher at 6,575.0 within a whisker of the day's peak. The positive sentiment spread to the undercard, with the FTSE 250 ending 13.9 higher at 6075.5 and the Small Cap finishing 4.3 better at 2746.8.
The big hitters were all out in force. Financials roared ahead on bullish research and bid rumours. Illiquid Schroders soared 99p to 1525p as Merrill Lynch said "accumulate" and whispers of a Goldman Sachs strike persisted. Legal & General cashed in a 9.75p rise to 165.25p in high volume on bargain hunting and revived talk of a bid, possibly from Lloyds TSB, up 49p to 879.5p.
Reuters made the headlines, climbing 56p to 903p after the successful US flotation of its Internet software division Tibco. The sharp rise in Tibco's shares price valued the information giant's 63 per cent stake at over pounds 780m.
The market's two largest stocks threw their weight behind the rally. BP Amoco, the biggest of the lot, drilled a 26p advance to 1,285p after unveiling $10bn of asset disposals and a set of tough financial targets. Vodafone Airtouch, the second-biggest blue chip, rose 33p to 1,334p after Goldman Sachs lifted its price target to 1,600p.
Granada beamed 36p higher to 663p. The market believes that the recent stake in Liverpool Football Club may soon be followed by other buys. Whispers of a disposal were also heard. In the football sector, Loftus Road, the owner of Queens Park Rangers scored a 4p advance to 14.5p after receiving bid approaches, while Nottingham Forest firmed 1p to 36.5p on talk of an imminent takeover offer.
Among the fallers, Marks & Spencer shed 11p to 377.5p as the predicted grim trading update triggered downgrades. Analysts' downgrades upset drug giants SmithKline Beecham, down 14.5p to 825.5p and AstraZeneca, 39p lower at 2306p. However, pharmaceutical midcapper Medeva shot up another 7.5p to 143p on talk of a bid from rival Shire, down 3.5p to 580p. Sector peer Skyepharma firmed 4.75p to 53.25p on vague bid whispers.
J Sainsbury, down 4.25p to 396.25p, was on the reject shelf after analyst Paul Smiddy at Credit Lyonnais said "reduce" and reduced his forecast. Next, 27p lower to 751p, was also hit by CL's bearishness.
Pub group Greenalls frothed 11p higher to 379p. Rumour has it that Whitbread, up 18p to 947p could have a go after pulling out of the race for Allied Domecq's pubs. Wolverhampton & Dudley, down 2.5p to 616p, could also bid for Greenalls, after Greene King trumped its bid for Morland, up 14.5p to 530p, with a 512p-per-share offer.
First Group, the transport giant, sped 17.5p up to 329.5p after a roaring trading update. However, the IT group Admiral plummeted 45p to 800p on fears that the forthcoming interims will be poor. Discount retailer Matalan was hammered 37.5p lower to 917.5p by profit-takers, while JJB Sports was kicked 19p higher to 337.5p by hopes of improving sales.
Bookie Surrey Group was the tiddlers' safe bet. The stock firmed 1p to 3p on rumours that the takeover by Sports Internet could be pitched at around 5p-per-share.
Electronic group Feedback surged 23p to 75.5p on talk of major contract wins.
London Clubs moved 11p higher to 172.5p on revived rumours of a 225p bid from Far Eastern investors, while Jarvis Hotels booked a 9p rise to 150.5p amid on-going speculation of a tie-up with French giant Accor. Printing supplier Litho plunged 11p to 138p after a profit warning, while the construction group Vibroplant subsided 4.5p to 61p after the collapse of MBO talks.
SEAQ VOLUME: 1.1bn
SEAQ TRADES: 77,763
GILTS INDEX: 105.98 -0.78
THE INSURER Britannic yesterday found itself victim of the automated trading system for the second time in two months. Shortly after the opening bell, a careless trader inputted an order of 3,700 shares at the absurd level of 427.5p, when the market price was around 1,000p. The stock plummeted 65 per cent and was suspended. The daft order, which mirrored a similar mistake made in May, was cancelled and Britannic closed 55p better at 1030p.
KEEP AN eye on WF Electrical. The distributor of electrical products buzzed 24p higher to 524p yesterday as bid rumours started to circulate. Some cunning buyers believe that WF might have attracted the attention of a bigger player which could launch a bid at a sizeable premium. Sector peer Volex was mentioned, although other UK and overseas rivals could also enter the fray. WF's results, due out next week, should throw some light on the issue.