Market Report: Savage tongue of Kleinwort lashes Ladbroke

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The Independent Online
LADBROKE GROUP, which has betting and hotel interests, has been savaged by the Kleinwort Benson investment house.

The shares fell 5p to 149p, making a two-day fall of 14p, as analysts Paul Slattery and Simon Johnson advised clients to sell.

They declared: 'There is too much recovery expected by the market, too many uncertainties, too many adjustments which can be made to the accounts, too little disclosure and too much blind faith required by investors for the shares to justify their current rating.'

Ladbroke has encountered highly criticial comments over its accounting policies in the past. The shares have fallen from 260p in the past year.

Kleinwort, which describes the management as 'shrewd', expects profits to slip pounds 10.4m to pounds 200m this year with pounds 205m pencilled in for next. It sees dividends being increased to 11.15p this year and then to 11.20p.

The rest of the stock market was distressed by two non-events - the failure of the rumoured interest rate cut and mega takeover bid to appear. Sixteen job losses at UBS Phillips & Drew, which is cutting its market-making book, added to the unease.

The FT-SE 100 share index, at one time down 21.8 points, ended 10 lower at 2,574.7.

Although the big takeover bid was conspicuous by its absence many are still convinced the TSB Group is the blue chip being lined up for corporate action.

TSB has let it be known its Hill Samuel merchant banking subsidiary is up for sale, free of its portfolio of big corporate debts. But the recent interest in the shares, which shaded 0.5p to 137p, is intriguing many.

The banking group has looked vulnerable for a long time to a determined strike. Credit Lyonnais, the world's 14th largest bank and number two in France, has emerged as the market's clear favourite to mount a bid. Some expect a Hill Samuel sale to another party to be part of an agreed deal.

The French government's 60.15 per cent interest in Credit Lyonnais is unlikely to be an obstacle with the UK government, thought to be prepared to wave through an agreed merger.

United Biscuits, another rarely far from the takeover tormentors, gained 8p to 318p.

Elsewhere power shares were again weak on pricing worries. National Power fell 13p to 256p and PowerGen 13p to 267p. But the Scottish generators remained firm with Smith New Court suggesting Scottish Hydro-Electric looked cheap.

A sell programme took its toll with some lumpy lines of stock seeking homes. Siebe, the engineer, was hit. The shares fell 9p to 331p as a line, rumoured to be 250,000 or 500,000, hovered.

Glaxo Holdings dipped 9p to 782p as County NatWest placed 2.7 million shares, related to a staff option scheme, at 765p.

Downgradings continued to be felt. Hoare Govett left Williams Holdings 9p down at 267p and County pushed English China Clays 5p lower to 427p. BICC was troubled by a rumoured Cazenove downgrading, falling 11p to 240p. Glynwed International retreated 12p to 214p on a Carr Kitcat & Aitken cut.

But HSBC, the Hong Kong & Shanghai Banking Corporation, rose 13p to 437p on Barclays de Zoete Wedd support.

Sedgwick Group, the insurance broker, had a difficult time, falling 11p at one time. The shares closed 7p down at 134p. The activity stemmed from rumours of a Department of Trade and Industry investigation. A Sedgwick spokeswoman said: 'You can forget it. There is absolutely no investigation'.

Willis Corroon was also weak, falling 9p to 193p.

Euro Disney's recovery continued, up 40p to 900p. On top of better-than-expected attendance figures came a hint the parent Walt Disney group may ease the debt burden of the French off- shoot.

Beers remained under pressure from talk of a price war. Bass, which has effectively denied the suggestion, fell 12p to 523p. Allied-Lyons lost 11p to 603p; Scottish & Newcastle 18p to 399p and Whitbread 'A' 10p to 433p.

Blystad, the old KCA Drilling, put on another 1.5p to 4.5p, making a 3p gain in two days. The Norwegian-controlled group is involved in an acrimonous takeover struggle. Although a shell company called Abbot Holdings has control through a preference share offer, there is resistance from minority shareholders.

The Abbot offer, in unlisted preference shares, is said to value Blystad at 5.4p a share.

Barcom, the venture plant group that has been revamped, fell 11p to 79p. The group returned to the black in the summer with half-time profits of pounds 45,000 against a pounds 1.77m loss.

The way seems to be clear for troubled GM Firth to at last sell its 22.76 per cent interest in the steel group Arthur Lee. Yesterday Lee's sale of two loss-making subsidiaries for pounds 7.5m was cleared. The company is now almost debt-free. Its shares fell 2p to 93p. Carclo, with 7.79 per cent, looks the most likely buyer. Firth improved 1p to 12p, a two- day gain of 2p.

Blacks Leisure, the camping and sportswear retailer, held at 37p. The shares have come down from 114p this year. Interim profits, due later this month, will reflect the difficult retail environment with profits likely to be sharply lower at about pounds 500,000 against pounds 2.2m. But there are hopes Simon Bentley, chairman, will hold the half-time dividend at 1.1p a share.

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