Analysts reckon a stock market listing for SES would bring a big cash bonanza for 6 per cent shareholder Pearson, the media and leisure group under new management.
SES, in which the Luxembourg government has a 20 per cent stake, could fetch anywhere between pounds 2bn and pounds 3bn, valuing Pearson's investment at up to pounds 180m. That is double the amount some brokers have punched into their spreadsheets and could add up to 30p to their sum-of-the-parts calculations, pushing Pearson's estimated break-up value towards 1000p.
Marjorie Scardino, Pearson's new chief executive, is in the middle of a strategic review, more details of which could emerge with the group's annual results due on 17 March.
The deck-clearing exercise has already begun. Last month Pearson sold its 10 per cent stake in TVB, the Hong Kong television broadcaster, for pounds 111m. Realising the SES investment would be an obvious next step.
An SES spokeswoman confirmed the company intended to float at some stage but said there was no fixed timetable.
Pearson's shares have recovered since last month's discovery of a pounds 100m accounting fraud at its Penguin books subsidiary in the US. They touched a record 792.5p in early trade yesterday before slipping back to close 3.5p adrift at 775p after the American Booksellers Association reportedly alleged that Penguin USA unfairly granted discounts to large bookstore chains while not extending the discounts to independent retailers.
Pearson's weaker tone contrasted with the firm trend among most other blue chips. The FTSE 100 ended 50.6 points better at a new closing high of 4357.7 and 1.4 points shy of the session's best level.
Investors remain confident that interest rates will not rise ahead of the general election, while Wall Street continues to defy gravity.
BTR, reporting finals tomorrow, topped the list of best blue-chip performers, gaining 13p to 255.5p in response to news it had formed a strategic alliance between Brook Hansen, part of its power drives division, and Danfoss Drives of Denmark.
The day's main casualty was MFI, whose shares collapsed 40.5p to 156.5p after the furniture retailer warned on a sudden slowdown in like-for-like sales. Analysts cut back their profit forecasts, with Merrill Lynch reducing its 1997 estimates by pounds 15m to pounds 70m and by pounds 25m to pounds 90m for 1998. MFI's competitors suffered from the fall-out, notably DFS, off 14.5p at 595p.
Among insurers, General Accident's results lifted the shares 10.5p to 847.5p. SBC Warburg urged clients to add to their holdings, as did Merrill Lynch while ABN Amro Hoare Govett and Soc Gen were also positive.
Commercial Union paused for breath, unchanged at 721p but plenty of buying interest was noted amid the 3.56 million turnover. Rumours continued to circulate that a European insurer, possibly Allianz of Germany, might be taking a closer look.
Smith & Nephew was the weakest blue chip, down 6.75p at 184.25p, as concerns about US competitive pressures and the strong pound overshadowed results. Also unloved was Ladbroke, reporting finals on Thursday, on sell advice from ABN Amro Hoare Govett and Lehman Brothers. That sent the shares 2p lower to 227p.
Emap's dreadful run continued, the shares slumping another 10.5p to 739p as Credit Lyonnais moved from buy to hold. Two directors bought small lots of shares at prices between 747p and 751.5p. But buyers returned to paper maker David S Smith, up 15.5p at 261.5p and Pace Micro Technology, 19p firmer at 113.5p.
Linx Printing Technologies was in demand, rising 19p to 153.5p on results way ahead of analysts' expectations. Investors have had a roller-coaster ride since the shares were floated in 1993, the price gyrating between 218p and 58p.
Holliday Chemical has also given investors palpitations during its four- year life as a public company, but the shares added 8p to 134p after the speciality chemicals group posted marginally better 1996 results.
One company to put its shareholders out of their misery was Tomorrow's Leisure, which accepted a pounds 16.2m offer from property group Wiggins for the 75 per cent of shares it does not already own. The shares, worth more than 100p in 1989, rose 3p to 9.25p.
Rumours that Midland Independent Newspapers is about to be taken over refuse to die down. One story doing the rounds is that Newspaper Publishing, owners of The Independent, is lining up a 175p a share bid after failing to land Westminster Press, another regional newspaper publisher, last year. Sources at the Mirror Group, which owns 46 per cent of Newspaper Publishing, continue to play down the speculation. Both Midland and the Mirror report results next week. Midland's shares edged 2.5p higher to 145p.
Shares in Waterfall Holdings, floated last year at 45p, hit a new high of 84.5p, up 4.5p. In its biggest deal so far, Waterfall is paying Regent Inns pounds 4.85m for 12 snooker clubs in the Midlands and the North of England, increasing the number of outlets to 36.