According to market sources, the Anglo-Dutch group is thought to be close to finalising the sale of its consumer books division to a management buy-out team.
Reed has been trying to sell the division en bloc for the best part of two years. When an auction attracted bids of just pounds 70m-pounds 80m, compared to an initial asking price of pounds 250m, the business was withdrawn from the market.
But at the end of last year John Holloran, who led a buy-out of British Printing Corporation from the late Robert Maxwell, was appointed to fatten up consumer books ahead of a sale by early 1998.
Reed recently sold some of the best-known names in book publishing, including Secker & Warburg and Heinemann, to Random House for about pounds 20m - the equivalent of the division's turnover.
Using a similar ratio Reed hopes the rest of the consumer books business, which includes reference, illustrated and children's books, will fetch around pounds 150m. Hopes that a sale is imminent, and at a reasonable price, helped elevate Reed's shares 45p to 1147.5p. Analysts also believe the shares have been oversold since Reed warned before Christmas that currency factors could hit profits in 1997.
Rumours that Reuters, up 11p at 666.5p, might be sniffing around Reed were dismissed as old hat.
For once the FTSE 100 index ignored a weak opening in New York by building on earlier gains to close at a record high of 4357.4, up 25.1 on the day. News of the death of Chinese leader Deng Xiaoping came after the market closed, though Wall Street's initial reaction was calm.
SmithKline Beecham led the way, surging 46.5p to an all-time peak of 941p on further consideration of a strong set of 1996 figures from the drugs giant on Tuesday. Merrill Lynch reckons SmithKline Beecham deserves to trade on a similar multiple to its US peers, implying a price in excess of 1000p.
Good results from Swedish pharmaceuticals group Astra added to positive sentiment in the sector, with Zeneca advancing 25p to 1801p and Glaxo 25p ahead at 913.5p.
Also firm was BAT Industries, 17.5p better at 545.5p on renewed hopes that the US tobacco industry will agree a settlement with various groups bringing lawsuits against it.
The froth came off Scottish & Newcastle after the Department of Trade and Industry gave tenants with Inntrepreneur, owned by Grand Metropolitan and Foster's, the choice to buy their beer supplies from other brewers. Scottish & Newcastle's shares shed 6p to 669p.
Shell was on the slide, down 9p at 1079.5p, as Salomon Brothers urged clients to take profits on the back of recent share price strength. The US investment bank believes Shell's valuation is stretched relative to the sector and expects the share to weaken as the crude price declines.
Yorkshire Tynes-Tees topped the list of FTSE 250 movers as speculation grew that Granada, owner of the North-west franchise, was about to make its long-awaited move on the television group and trigger one last shake of the ITV kaleidoscope.
Granada is said to have cleared the decks for the acquisition after selling its Welcome Break motorway service stations for pounds 476m and pocketing another pounds 90m from property group Chelsfield for its Westbury hotels in London and New York. Shares in Yorkshire ended 55p higher at 1152.5p, valuing the broadcaster at pounds 637m.
Other ITV franchise holders shrugged off recent fears about the impact of digital television with Scottish TV up 13.5p at 616p and HTV 5p firmer at 335p. Expect HTV to move higher this morning. Analysts say a Granada swoop on Yorkshire would free United News & Media, holder of the Anglia and Meridian licences, to pounce on HTV. United has 14 per cent in Yorkshire and 29.9 per cent of HTV - the maximum allowed without triggering a full bid.
Amec surged in late trade to close 5p ahead at 109p. The contractor is expected to announce this morning that it is close to completing the sale of its 20 per cent stake in Egypt Gas for pounds 38.1m. The deal, due to completed next Monday, will net Amec a pounds 30m profit.
Shares in George Wimpey, the housebuilder, added 2.5p to 138p as fund manager PDFM bought 9.73 million shares to take its stake from 20 per cent to 22.7 per cent.