Market Report: Now it's MAM's turn to be pushed into the limelight

The powerful fund manager Mercury Asset Management, which played a pivotal role in the pounds 3.9bn Granada takeover of Forte, is being pushed back into the stock market limelight.

There has been discreet buying and the price, after drifting aimlessly, gained 10p to 866p, a 22p advance this week.

Since the demerger from what is now SBC Warburg, MAM has been seen as a take- over target. With the Gartmore fund management group and the Clerical Medical insurance mutual on the market MAM tended to slip into the take over mist.

The shares, at a 963p peak in October, have lost their enthusiasm. But with NatWest absorbing Gartmore and Halifax accounting for Clerical Medical, MAM is back in the bid arena.

The fund management ambitions of cash-rich NatWest are unlikely to be satisfied by Gartmore; hence the suspicion that it could shortly descend on MAM, which is currently valued at around pounds 1.6bn.

The feeling that a mega bid was near was once again going the rounds. The recent lack of take over activity is regarded in some quarters as the lull before the storm.

BT, still in deep trouble with its industry regulator and sinking to new lows, is seen as the major part of the deal; Cable and Wireless is the other party.

Putting the two together will create huge problems. Because of C&W's controlling stake in Hong Kong Telecom and its ramshackle network of overseas interests it is suggested any merger could only be completed through a reverse takeover - with C&W bidding for BT.

The combined group would command a stock market valuation of approaching pounds 35bn, making it easily London's largest capitalisation.

BT slipped 2p to 234p while C&W fell 4.5p to 477.5p.

The arrival of Orange took attention away from BT and Cable. Orange did not reach the 250p many predicted but the mobile telephone group went from a 205p fixing to 244p, closing at 237.5p. Trading was busy with Seaq putting turnover at 75.5 million shares. British Aerospace joined the Orange celebrations with a 13p gain to 868p.

Helped by the Orange issue, an Iceland share buy back and heavy trading in a few off-beat tiddlers, the market had a busy time with turnover topping 1bn shares for the second time this month.

The FT-SE 100 index improved 11.5 points to 3,672.4 and the supporting FT-SE 250 index put on 11.2 to a peak of 4,305.7.

The BSE disaster, at least for the time being, took a back seat with some food producers managing modest rallies.

Drug groups had a mixed time; British Biotech surged 133p to 2,483p but Glaxo Wellcome shaded 4.5p to 831p as the Japanese group, Sankyo, delayed the launch of a diabetic drug for which Glaxo is European licensee.

Kingfisher jumped 21p to 554p on the better-than-expected figures but Pilkington lost 8p to 198.5p on its profit warning and job losses.

Oils were strong, inspired by the continuing strength of the crude price and the confident sounds emerging from a US conference. Enterprise Oil jumped 19p to 442p while Lasmo rose 5p to 189p. British Petroleum, helped by another Colombian oil find, strengthened a further 8.5p to 577p.

JD Wetherspoon, the pubs chain, added a further 27p to reach a new peak of 859p. Williams de Broe expect profits this year of pounds 12m with pounds 14.6m next.

Tom Cobleigh, another pubs group, tumbled 33p to 212p on the disclosure its building programme was running two months behind schedule.

Nurdin & Peacock, the cash and carry chain, rose 6p to 168p as speculation intensified that SHV, with 14 per cent, will bid for control. It is upset with the N&P management and already owns the Makro cash and carry group. Booker, reporting today, could also make a play for N&P.

United Utilities gained 19p to 597p with Credit Lyonnais Laing claiming it was the most undervalued utility share. Analysts have been called to a meeting today when UU is expected to announce big job losses, property sales and a management buyout of its retail business.

Aromascan, the "electronic nose" group, slumped 42p to 126p on a warning of increased losses and Filtronic, which makes mobile telephone equipment, lost a further 38p to 315p following Tuesday's cautious comments.

Quicks, the car dealer, motored 6p higher to 156p with year's profits up 17 per cent to pounds 4.6m. Around pounds 5.8m is expected this year.

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