Market Report: hits new high as rumour of tie-up goes online

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The Independent Online
SCOOT.COM led the Internet posse higher yesterday as the market logged on to another round of corporate action rumours.

The online "Yellow Pages" group touched an all-time high of 150p after a 14p rise as web-mad dealers whispered of an imminent tie-up with an Internet operator.

The sparsely populated dealing floors echoed with rumours that Scoot is about to offer access to its huge online directory to a UK Internet service provider.

The mooted deal should be similar to a recent link-up between Scoot and the United States search engine Alta Vista.

Under that deal, Alta Vista users got access to the UK group's immense directory of hairdressers, restaurants and the like, while Scoot benefited from a rise in the number of customers (or "hits") of its online service - that all-important measure of the success of a website.

If yesterday's rumours are to be believed, Scoot is now preparing to welcome another bunch of hits to its site by adding a UK portal to its partnerships with Alta Vista, Freeserve and America Online.

Followers of the stock said that the company is in discussions with an established Internet player and an agreement could even be sealed before the new millennium.

More excitable minds got hold of an Internet bulletin story about a mega- deal by Scoot in the US. However, Scoot-watchers said that a large tie- up in the States is still some way off and the next big piece of news will concern the company's alliance with the French conglomerate Vivendi.

Last month, the Gallic giant said it would spend pounds 200m to finance Scoot's European expansion in exchange for some bonds convertible into the UK company shares at 90p. However, fresh rumours suggest that the deal has been revised in Scoot's favour and new terms could be announced with results in January.

The rest of the "dot com" brigade was in sparkling form as the tech-laden US index Nasdaq hit another record and its UK counterpart techMark jumped 80.67 to 3,615.01. The Net bonanza came despite some words of doom from a Morgan Stanley web guru, Mary Meeker, who believes that the Internet bubble will burst in the New Year. Unfortunately, nobody appears to believe her.

Freeserve soared 76p higher to a best-ever 574.5p, sending parent company Dixons 92p better to 1,411p. The electrical retailer's rise was reinforced by vague rumours of a bid. Online auctioneer surged 185p higher to 1547.5p on whispers of new deals, while Net names specialist NetBenefit gained 220p to 945p. JellyWorks, an Internet investor, chose the right day to float on AIM, rocketing 44.25p higher to 49.25p.

The rest of the market had a tense day as a combination of pre-Christmas apathy and pre-US rate decision fears kept many investors on the sidelines. The FTSE 100 ended 23.7 lower at 6,707.5 amid concerns that the US Federal Reserve would keep rates unchanged but move to a tightening bias. After the close, the Fed delivered a pleasant surprise by leaving rates on hold and keeping a neutral bias.

Volume was a paltry 880 million as four more UK institutions were rumoured to have shut up shop.

Vodafone AirTouch, as usual, proved a bright exception with more than 66 million shares traded. The stock lost 2.5p to 298.5p amid a flurry of rumours. There is talk that the fourth quarter mobile subscriber figures, to be released in early January, will be fantastic. On a racier note, there are whispers that Vodafone could launch another bid alongside the Mannesmann offer or even that Vodafone itself might receive an approach from a US player.

Retailer Kingfisher, 10p higher to 628p was also in the takeover frame, amid whispers that a Continental rival could make a move.

Mail-order struggler GUS fell 8p to 337.75p even though a mystery investor appeared to have bought a 1 per cent holding. The purchase sparked rumours of stake building by a potential predator.

Clothes chain Storehouse was flat at 43p despite renewed talk of a strike from Archie Norman's Knutsford, unchanged at 232.5p, while rival House of Fraser firmed 2.5p to 71p on returning bid whispers. Supermarket Safeway joined the fun with a 6.75p rise to 225.75p on takeover speculation.

Electricity group National Power lost 1.75p to 373.75p despite buying 450,000 shares from HSBC at 379p and talk of a 500-550p bid in the New Year.

The Nasdaq jump helped computer group Sage to hit a new high of 691.5p after an 85.5 rise, while hotelier Hilton, 9p better to 200p, was excited by talk of growing millennium bookings.

No such luck for Corus. The old British Steel shed 13.25p to 159p after broker Warburg told clients to take profits.

The FTSE 250 did better than its bigger brother squeezing 0.8 higher to an all-time high of 6,330.8. The Small Cap was also in record-breaking form, closing 17.4 higher to a best-ever 3,020.1.

Transport stocks were racing away. Car hire specialist Lex Service motored 31p higher to 362.5p after a couple of bolt-on acquisitions, while bus group National Express roared 45p higher to 735p despite on-going talk of a bid for rival Arriva, 15p lower to 230p. Vague takeover whispers helped engineer Morgan Crucible to rise another 15p to 285.5p, while stationery chain WH Smith bagged a 22.5p rise to 480p after joining an interactive TV service run by Telewest, 2p lower to 314.75p.

Rehashed bid talk sent Thomson Travel 0.25p higher to 97.25p in good volume and Securicor 2p better to 166p.

Among the minnows, investors in the pig group PIC International squealed with joy after it rose 8.5p to 33.5p following an upbeat trading statement. Hi-tech investor London Pacific soared 129p to a record 617.5p on talk that one of its US investments is set to debut on Nasdaq with a $1bn price tag. Internet incubator jumped 47.5p to 235p on rumours of imminent deals. Electronics group Deltron was flat at 111.5p despite rumours that it is to open an office in the booming Irish market.

Oil driller Desire Petroleum firmed 2.5p to 43.5p on speculation of an imminent positive announcement, while cash shell Horace Small firmed 5p to 36.5p on whispers of an Internet reverse takeover.




THE ON-LINE auctioneer Icollector, down 10p to 850p, is rumoured to have its sights on a big US float. Punters believe that the company, traded on the fringe OFEX market, could go under the hammer on Nasdaq in the New Year. According to the rumours, the US broker Lehman Brothers, recently appinted as financial advisor, is looking at a large float which could value Icollector at up to $35 (pounds 22) a share.

SOMETHING is brewing at the Irish driller Bula Resources, unchanged at 2.75p. Well-informed investors are muttering that the oil explorer is finalising a strategic link-up with Oilinvest, the Libyan group which runs the TAMOIL petrol stations. Rumours are that the deal, which would include joint exploration projects, could be announced early next month after the end of the Muslim festival of Ramadan.