Market Report: Securicor rescues a depressing session

IN A DEPRESSINGLY dull session, it was left to Securicor to set the stock market wires buzzing. At one time the shares, in busy trading, were up 12p; they settled for an 8p gain to 581p.

The security group's sudden flourish caught many on the hop. In recent years it has enjoyed many a speculative boost as stories have swirled that its 40 per cent stake in mobile phone group Cellnet was about to be offloaded to the other shareholder, BT.

But last month, after many a false dawn, Securicor did the deal, agreeing to sell its stake for pounds 3.15bn, with much of the cash reserved for its shareholders.

The sale has still to be approved by the shareholders, and one of the yarns occupying market gossips was the unlikely possibility of BT being forced to improve the terms because of indications that another group could be interested.

Securicor, which will concentrate on its security, recruitment and transport interests once it hangs up on Cellnet, is known to have a significant acquisition, worth about pounds 300m, near completion; perhaps it was the imminence of this deal that prompted the sudden flurry.

Tesco, underlining the paucity of activity, led the FTSE 100 leader board with a mere 2.1 per cent increase to 181.25p. Despite the price war, encouraged by Westminster interest and the arrival of Wal-Mart, the shares remain within check-out distance of the year's 195.75p high. Their latest advance stemmed from Goldman Sachs repeating its buy advice.

The FTSE 100 ended 69 points down at 6.166.4, once again in modest trading. Mid cap shares also retreated but the Small Cap section managed to make some headway.

Interest rates again dominated sentiment. The belief is growing, possibly in London more than in New York, that US interest rates will be increased next week, although transatlantic consumer price statistics were benign.

Associated British Foods crumbled 21.75p, giving up almost all Monday's gain, to 408.25p. Leisure shares suffered on worries that margins were coming under increasing pressure, with Hilton, the former Ladbroke, off 10.25p to 226.5p and Granada 24.5p to 577p.

The beerage was as flat as yesterday's pint, with Bass off 34p to 854.5p and Whitbread 35p to 860p. Rank, thought to have changed its mind over selling its Tom Cobleigh pubs chain, dipped 10.25p to 271p.

But Coca-Cola Beverages, confirming its pounds 4.3bn merger with the Athens- quoted Hellenic Bottling Co was near to being capped, fizzed 13p higher to 128.5p. PizzaExpress, the restaurant chain, was another to buck the downward tug, gaining a further 28.5p to 788.5p on the Warburg Dillon Read buy recommendation.

Holiday shares also struggled out of the doldrums, with Airtours climbing 16p to 439p and Thomson Travel up 8p to 137p. First Choice added 5p to 185p.

Engineers were generally weak, with TI off 30.75p to 532.5p. Premier Farnell failed to respond to buy advice from Commerzbank, falling 9p to 285p.

The day's best percentage gain was recorded by little Philippine Gold, up 28.5 per cent to 2.25p on the firmer gold price. Allied Carpets, where a bid has been rolled out by Brown & Jackson, was not far behind, up 26 per cent to 48p.

Leeds Sporting, still talking to "various" media groups, went to a 28.25p peak with a 3.5p gain.

Church & Co, the upmarket shoe group, stood out with a 32.5p gain to 692.5p, a new high. Hopes of an Italian bid were the inspiration. Prada, thought to be related to Italy's Prada clothes group, has acquired an 8.5 per cent interest with much of the stake seemingly coming from AMA Asset Management. Diego Dalla Valle, running Italy's Tod shoe maker operation, recently put together a Church stake.

The stake-building comes as Patrizio Bertelli, who owns the Prada clothing business, claimed he had amassed a 52 per cent interest in Germany's Jil Sander fashion group.

The Next fashion chain improved 9.5p to 687.5p as Deutsche Bank placed 11 million shares from the Tiger hedge fund. The stake, about 3 per cent of Next, was sold to Deutsche at 666.5p a share and placed with institutions at 673p. Tiger built a significant stake in Next but has been reducing its holding and now has only a small, if any, shareholding.

Save, the petrol retailer that has suffered sharp reverses since hitting a 269.5p peak in 1995, enjoyed a brief bounce on the escalating price of petrol. But a 2p gain was not held and the shares ended unchanged at 46p.

Roxspur, the electrical equipment group, gave up 5p to 30p after saying it could not account for its recent share strength.

Lady in Leisure, the fitness group, fell 5p to 75p after 12 per cent shareholder Duncan Bannatyne quit the board.

Slug & Lettuce, the under-performing pubs chain that last week surprised the market by pulling up a sharp profits advance, firmed 7p to 163.5p. There was talk that SFI - the old Surrey Free Inns, which held unsuccessful merger talks with Regent Inns - planned a strike. But an SFI spokesman denied that a bid was planned.

At one time Slug & Lettuce shares were riding above 300p. Despite its popular pub concept the chain has lagged most of managed pub groups. Ahead of its recent figures the price was down to 139.5p.

Still, many observers are convinced that further consolidation is inevitable among the pub chains. SFI is known to be keen to expand, and Regent, which has gone a long way towards recovering from its surprise profits warning last year, could feel inclined to swallow Slug & Lettuce, a brand that would fit well with the Regent pubs spread.

Pilat Technology fell 5p to 67.5p, although suspicions continue to lurk that significant changes, including acquisitions, are likely to be announced soon.

SEAQ VOLUME: 982.2m

SEAQ TRADES: 71,753

GILTS INDEX: 105.26 +0.24

IN BUSY trading Alvis, the defence group where GKN sits on a 29 per cent holding, rose 4p to 172.5p. Earlier this month the shares were down to 147.5p.

There is talk that Vickers, unchanged at 176.5p, is contemplating a deal. Any deal would, of course, need GKN's approval. It acquired its Alvis shareholding last year in return for pumping its defence operations into the company.

NEWCOMERS continue to arrive on the fringe Ofex market. Latest is MILS Technology, which has developed a low location lighting system that can be embedded into a floor to provide escape guidance in emergencies.

The shares, placed at 25p, closed at 28.5p. Adviser is Ruegg & Co, which launched Robotic Technology, one of Ofex's most successful constituents, going from 35p to more than 300p before moving to AIM.