Market Report: Pilkington and Norwich Union blossom on bid talk

NORWICH UNION, the insurer, and glass-maker Pilkington, two of the market's oldest bid chestnuts, blossomed again yesterday as a wave of speculative buying revived takeover talk.

The Pilkington rumour was the more consistent of the two. Whispers that the underperforming glass-maker is close to a management buyout or a bid from a private equity group started early in the morning and continued throughout the session.

Quite a few investors put their money where their mouths were and rushed to buy Pilkington, sending the stock to a daily high of 115p, a near 5 per cent hike. A bout of profit taking before the close sent the stock back to 113p - a 2.5p rise on the day, but the bulls of the story were undeterred.

They pointed out that, although the Pilkington bid rumour has been heard many times before, yesterday's volume - a chunky 6.4 million - suggests that something is afoot.

The hot tip is for a management buy-out north of 130p per share but an offer from a cash-rich venture capitalist or even a strike from a sector rival are also possible. Supporters of the story argue that the time is right for a strike. The tough cost-cutting programmes put in place by chief executive Paolo Scaroni are starting to bear fruit and Pilkington is shifting its focus from commodity glasses into more profitable areas.

If potential predators wait any longer, the share price will start to reflect the benefits of Mr Scaroni's strategy and the chance of buying Pilks on the cheap will be gone.

The Norwich Union rumour resurfaced late in the day, when a flurry of buying activity sent the price 22.25p higher to 479p - the best performance in a falling FTSE 100.

Part of the rise was due to news of a $12.7bn bid by the Italian giant Generali for fellow insurer INA, which triggered talk of further sector consolidation.

But Norwich Union was also boosted by domestic whispers pointing to a bid from a bank such as Barclays, down 31p to 1,696p, Halifax, 33.5p lower to 661.5p, or even Lloyds, 8.5p worse to 782p. Allianz was mentioned, even though the German giant had been linked earlier in the day with CGU. In the end CGU dropped 38p to 913p as the Allianz rumours faded.

The rest of the FTSE 100 swerved like a drunken driver as conflicting economic data on both sides of the Atlantic deepened the market's interest rate dilemma. The leading index closed 53 lower at 6,116, after the Dow Jones posted a three-figure opening loss on stronger-than-expected United States retail sales' numbers. The Wall Street plunge wiped out an earlier 81-point gain triggered by a tame set of domestic inflation figures.

The undercard was also hammered, with the FTSE 250 closing 57.6p lower at 5,980.2 and the Small Cap closing 18.3 down at 2,835.2.

Vodafone Airtouch bucked the trend once again, rising 19p to 1,272p amid talk that its joint venture with US rival Bell Atlantic could be announced today. Broker Deutsche believes that a tie-up with Bell could push Vodafone's shares to 1,600p.

Another much-rumoured deal, Scottish & Newcastle's pounds 1.1bn purchase of Greenalls' pubs, duly arrived and Scottish & Newcastle soared 19p to 612p. However, Greenalls dropped 7p to 361p despite the promise of a 160p-per- share cash back. Any lower and a bid for its hotels, probably from Whitbread, 22p lower at 779p, will be on the cards.

Boots fell 23.5p to 743p amid talk of an announcement on its Internet strategy today. Dealers expect the statement to be positive and suggest that the chemist could also update the market on current trading.

Internet stalwart Dixons lost only 2p to 1,131p after Goldman Sachs upgraded and targeted 1,260p. Rival Kingfisher plunged 30.5p to 709p after in-line interims. The market was disappointed at the lack of news on the group's acquisition strategy.

Colt Telecom rung up a hefty 83p loss to 1,268p as dealers fretted at a profit-warning from US rival Global TeleSystems.

British Airways nosedived 4.25p to 382p after CSFB advised a switch into German rival Lufthansa and Goldman went bearish.

Among second liners, the dairy group Express Dairies was the day's best midcapper, milking a 5.5p rise to 130p on talk of contract wins and corporate shake-ups.

Some dealers believe that rival Unigate, down 10p to 365p, might have lost a lucrative milk contract with Tesco - 1.75p lower to 193p. The mishap could mean that Express or Dairy Crest, 4p higher at 292.5p, could replace Unigate as the supermarket's giant supplier. An alternative rumour suggested that the Express board could be in for some major changes that could pave the way for corporate action.

Drug group Medeva shot up 4p to 169p on whispers that the expected 200- 210p offer from Irish rival Elan - 10p higher to 2,025p - could come as early as next week. However, wilder rumours talked of a counterbid from a pharma giant such as Glaxo Wellcome, 28p lower to 1,617p.

Engineer Charter was another in-form midcapper, rising 11p to 356p on hopes of imminent disposals.

Vague takeover speculation sent holiday group Thomson Travel 1.5p better to 106p.

The minnows were excited by bids, real and rumoured. Truck rental group Hill Hire motored 63.5p ahead to 235.5p after receiving a 240p-per-share offer from Bank of Scotland, 19.5p lower at 696.5p.

Computer group Ilion surged 25p to 148p after unveiling a possible 160p- per-share bid from Dutch rival Landis.

Recruiter Quantica firmed 7.5p to 56p on takeover talk. Industrial investor Gartland Whalley & Baker, 1p lower at 92.5p, holds around 43 per cent and could be looking for a buyer. Tradepoint, the electronic share exchange, jumped 16.5p to 169.5p on whispers that Dresdner Bank might take a stake.

Retractable syringe-maker NMT retracted 41p to 118.5p after a disastrous profit-warning, while a bearish current trading statement hit tank-maker Alvis, down 43.5p to 146.5p. Irish explorer Minmet plunged 2.5p to 12.75p after Monday's rise. The stock was puffed on a lunchtime money program on Channel 4. Clinton Cards, 8p higher to a record 314.5p, should appear today.

Cash-and-carry group Booker rose 8p to 137p on talk of directors' share buying. Braver traders said a hostile bid might be in the offing. Oil minnow Desire Petroleum returned from the suspension that followed its merger with Gaelic Resources and immediately lost 23.5p to 20.5p. Wonderstock Rage Software, the computer games maker, lost 0.5p to 32.25p despite good interims and another deal with US publisher Interplay.



GILTS INDEX: 103.26 +0.23

THE DEVELOPER Regalian Properties is back in the bid frame. The stock hit a 12-month high of 32p after a 2.5p rise yesterday as punters whispered about a strike. Mooted predators include Fairview Holdings, recently demerged from Hillsdown, or a privately owned group looking for a listing. Regalian's main attraction is its exposure to the booming London residential market. The group recently started on a major development in Paddington, north London.

SCOOT.COM had a busy day yesterday amid talk of a large discounted placing. The Internet yellow pages group closed 3.75p lower at 42.5p as two City brokers, believed to be Cazenove and Collins Stewart, were said to be looking for a buyer for up to 40m shares. The stake, which could have come from one of Scoot's US investors, is believed to have been placed at a discount to Monday's closing price, although dealers noted strong interest in the offer.

The surrealist comedian at the Q Awards in 2010
Russell Brand arriving for the book launch in East London
peopleRussell Brand cancels his book launch debate due to concerns about the make-up of the panel
Christiano Ronaldo enjoys his opening goal
champions leagueLiverpool 0 Real Madrid 3: Ronaldo and Benzema run Reds ragged to avenge thrashing from their last visit to Anfield
Arts and Entertainment
Awesome foursome: Sam Smith shows off his awards
music22-year-old confirms he is 2014’s breakout British music success
Life and Style
Six of the 76 Goats' cheese samples contained a significant amount of sheep's cheese
food + drink
Arts and Entertainment
Contestants during this summer's Celebrity Big Brother grand finale
tvBroadcaster attempts to change its image following sale to American media group
Arts and Entertainment
Sir Nicholas Serota has been a feature in the Power 100 top ten since its 2002 launch
Arts and Entertainment
Sarah Dales attempts to sell British Breeze in the luxury scent task
tvReview: 'Apprentice' candidate on the verge of tears as they were ejected from the boardroom
Call me Superman: one of many unusual names chosen by Chinese students
newsChinese state TV offers advice for citizens picking a Western moniker
ebooksAn unforgettable anthology of contemporary reportage
Wilko Johnson is currently on his farewell tour
New look: Zellweger at Elle's Women in Hollywood awards on Monday
voicesRenée Zellweger's real crime has been to age in an industry that prizes women's youth over humanity, says Amanda Hess
Let’s pretend: KidZania in Tokyo
educationKidZania lets children try their hands at being a firefighter, doctor or factory worker for the day
Life and Style
CHARGE BOOSTER: Aeroplane mode doesn't sound very exciting, but it can be a (phone) hacker's friend. Turning on the option while charging your mobile will increase the speed at which your phone battery charges
techNew book reveals how to rid your inbox of spam, protect your passwords and amplify your iPhone
Arts and Entertainment
Julianne Moore and Ellen Page are starring together in civil rights drama Freeheld
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

IT Systems Business Analyst - Watford - £28k + bonus + benefits

£24000 - £28000 per annum + bonus & benefits: Ashdown Group: IT Business Syste...

Trainee Recruitment Consultant - Birmingham - Real Staffing

£18000 - £23000 per annum + Commission: SThree: The SThree group is a world le...

Trainee Recruitment Consultant Birmingham

£18000 - £23000 per annum + Comission: SThree: The SThree group is a world lea...

Trainee Recruitment Consultants

£20000 - £25000 per annum + OTE £Competitive: SThree: SThree Group and have be...

Day In a Page

How could three tourists have been battered within an inch of their lives by a burglar in a plush London hotel?

A crime that reveals London's dark heart

How could three tourists have been battered within an inch of their lives by a burglar in a plush London hotel?
Meet 'Porridge' and 'Vampire': Chinese state TV is offering advice for citizens picking a Western moniker

Lost in translation: Western monikers

Chinese state TV is offering advice for citizens picking a Western moniker. Simon Usborne, who met a 'Porridge' and a 'Vampire' while in China, can see the problem
Handy hacks that make life easier: New book reveals how to rid your inbox of spam, protect your passwords and amplify your iPhone

Handy hacks that make life easier

New book reveals how to rid your email inbox of spam, protect your passwords and amplify your iPhone with a loo-roll
KidZania lets children try their hands at being a firefighter, doctor or factory worker for the day

KidZania: It's a small world

The new 'educational entertainment experience' in London's Shepherd's Bush will allow children to try out the jobs that are usually undertaken by adults, including firefighter, doctor or factory worker
Renée Zellweger's real crime has been to age in an industry that prizes women's youth over humanity

'Renée Zellweger's real crime was to age'

The actress's altered appearance raised eyebrows at Elle's Women in Hollywood awards on Monday
From Cinderella to The Jungle Book, Disney plans live-action remakes of animated classics

Disney plans live-action remakes of animated classics

From Cinderella to The Jungle Book, Patrick Grafton-Green wonders if they can ever recapture the old magic
Thousands of teenagers to visit battlefields of the First World War in new Government scheme

Pupils to visit First World War battlefields

A new Government scheme aims to bring the the horrors of the conflict to life over the next five years
The 10 best smartphone accessories

Make the most of your mobile: 10 best smartphone accessories

Try these add-ons for everything from secret charging to making sure you never lose your keys again
Mario Balotelli substituted at half-time against Real Madrid: Was this shirt swapping the real reason?

Liverpool v Real Madrid

Mario Balotelli substituted at half-time. Was shirt swapping the real reason?
West Indies tour of India: Hurricane set to sweep Windies into the shadows

Hurricane set to sweep Windies into the shadows

Decision to pull out of India tour leaves the WICB fighting for its existence with an off-field storm building
Indiana serial killer? Man arrested for murdering teenage prostitute confesses to six other murders - and police fear there could be many more

A new American serial killer?

Police fear man arrested for murder of teen prostitute could be responsible for killing spree dating back 20 years
Sweetie, the fake 10-year-old girl designed to catch online predators, claims her first scalp

Sting to trap paedophiles may not carry weight in UK courts

Computer image of ‘Sweetie’ represented entrapment, experts say
Fukushima nuclear crisis: Evacuees still stuck in cramped emergency housing three years on - and may never return home

Return to Fukushima – a land they will never call home again

Evacuees still stuck in cramped emergency housing three years on from nuclear disaster
Wildlife Photographer of the Year: Intimate image of resting lions claims top prize

Wildlife Photographer of the Year

Intimate image of resting lions claims top prize
Online petitions: Sign here to change the world

Want to change the world? Just sign here

The proliferation of online petitions allows us to register our protests at the touch of a button. But do they change anything?