Whether Lloyds would need to fill its boots with shareholder cash for such an exercise is a matter of some conjecture. But what is crystal clear is the ambitious bank, which long ago decided investment banking and securities did not represent the way ahead, needs, in the present climate, to bolster its insurance side.
As Barclays struggles with its BZW fiasco and National Westminster Bank agonises over the future of its securities arm, Lloyds merely savours the problem of deciding which is the easiest insurance target.
Legal & General and Norwich Union are the stock market's favoured candidates. Both are near their best ever levels.
L&G has for long been a take over favourite. At one time it was thought to be a likely NatWest victim. In the event NatWest became weighed down by problems largely of its own making.
Norwich has been a take over candidate since it came to market in the summer. With a market valuation of pounds 6.8m, suggesting say a take out price of pounds 8bn, it would represent a comfortable excursion for Lloyds with a capitalisation of nearly pounds 43bn.
The bank was a little easier at 782.5p. L&G lost 4p to 494p and Norwich held at 248p. Barclays, as the German Commerzbank ruled itself out of BZW contention, fell 20p to 1,627.5p. NatWest, losing its deputy head of global research, David Atkinson, gave up 38.5p to 935.5p.
The rest of the market was under the Greenspan whip. With New York hesitant, Footsie closed 44.3 points down at 5,217.8. At one time it was off 96. Unchanged domestic interest rates helped but the spectre of Continental rates going up ruffled sentiment and, perhaps, in this superstitious age so did talk of October gales as the anniversary of the great crash neared.
First Leisure, expected to see institutions next week, rallied 11p to 291.5p. The shares have come down from a 376p peak with worries of a profits warning prompting the decline. The market is assuming the bingo to bowling alley group will have at least a reasonably positive message.
Railtrack's remarkable express run continued. The shares steamed a further 30p ahead, topping for the first time 1,000p. Property assets - and vague talk of US interest - offered the momentum.
P&O remained in demand on hopes its Cross-channel Stena deal will get regulatory approval and Zeneca remained in the Swiss take over spotlight. The shipping group rose 9p to 723.5p and the drugs group 25p to 2,132.5p.
Greenalls continued to hug the spotlight. There was talk it had, or was planning, to meet investment managers. The shares moved ahead 9p to 389.5p.
British Energy remained in demand. Morgan Stanley has reiterated its positive stance, helping the shares 21p higher to a 400p peak.
Britton, the packaging group, duly collected its take over interest - a possible pounds 167m offer from a US group, Caraustar. The Americans are talking in terms of 120p a share, a calculation which Britton seems set to reject. API, a Macclesfield-based packaging group, is known to covet Britton, up 32.5p to 117.5p.
XCL's ecstatic run on Chinese discovery hopes continued with the price flaring another 7.5p to 40.5p. MSB International, a computer personnel recruitment agency, continued to benefit from Tuesday's results, interim profits up from pounds 2.35m to pounds 3.71m, and an accompanying bullish statement. The shares jumped 62.5p to 575p, The price has climbed more than 100p since the figures.
Property shares again attracted attention. Allied London Properties rose 3.5p to 93p, a 12 month high, after the pounds 60m acquisition, with a partner, of the old Artillery Mansions, a Victorian complex, in London's Victoria. It plans to develop 187 apartments.
Chesterton, the property group, lost 17p to 23p after confirming it has suffered a "substantial loss". The shares were 80.5p in the summer.Reuse content