Market Report: Revived Regal Group provides the excitement

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A TINY hotel company just rescued from extinction accounted for almost a quarter of stock market turnover yesterday.

Regal Hotel Group, suspended in September at 3p and seemingly set to go into receivership, returned at 0.75p following approval of a creditors' voluntary arrangement and the expected launch of a pounds 450,000 rights issue.

Trading in the nil-paid rights, at between 0.25p and 0.5p, generated much of the excitement. The stockbroker Raphael Zorn Hemsley picked up more than 55 million of the rights for the entrepreneur Charles Vere Nicoll, who is to become chief executive.

Regal celebrated its resurrection by announcing two small hotel deals. Christopher Stainforth, director, expects other 'reasonably substantial acquisitions' in a few months.

Mr Vere Nicoll, who helped build a leading US health care group in the 1980s, is expected to head Regal's expansion drive. 'With so many hotels in receivership, there are clearly tremendous opportunities for growth,' Mr Stainforth said.

Under the Seaq counting method, Regal rights turnover was put at 121 million nil-paid shares with trading in the fully paid shares amounting to 1.1 million. Market turnover was 494.9 million.

The threatened food price war drained much of the market's festive exuberance, leaving the FT-SE 100 index down 15.3 points to 2,832.5.

J Sainsbury, which announced a series of cuts, fell 14p to 561p and Argyll Group dropped 22p to 398p. Food manufacturers, reflecting fears of squeezed margins, also gave ground. Cadbury Schweppes was lowered 9p to 439p, Northern Foods 8p to 265p and United Biscuits 11p to 352p.

Glaxo Holdings had another erratic session. At one time down 13p, the shares closed 11p higher at 785p as US investors, until recently prepared to unload, sought stock.

Stores shares were mainly lower, with the profit warning from Pentos doing much of the damage. Pentos fell 14p to 56p.

Airtours and Owners Abroad moved higher on reports of bumper holiday bookings; estate agents and some builders perked up on hopes of a housing revival.

Higher car sales lifted Central Motor Auctions 17p to 113p and Henlys 14p to 89p.

Drink shares were flat; Guinness fell 6p to 516p on the problems over its draught cans.

Granada Group continued to gain support, improving 9p to 363p. Abu Dhabi Investment Authority now has 4.2 per cent.

A Societe Generale Strauss Turnbull sell recommendation cut 5.5p from Rolls-Royce to 115p. Brickmaker Ibstock Johnsen edged ahead 3p to 43p with old bid favourite Tarmac, up 2p to 103p, said to be contemplating a strike.

New Year tips, real and rumoured, produced some sharp movements. Shandwick, the public relations group, rose 2.5p to 15p, Campari International 18p to 220p and ML Laboratories 45p to 1,040p.

The Newcomer Oil International Inspection ended at 53p against a 50p placing level. But the future looks uncertain for Sale Tilney, suspended at 4.5p pending 'clarification' of its financial position.

The mini-conglomerate was thought to be on the verge of agreeing a package with its bankers.