Market Report: Supermarket merger talk lifts a dull day

THE STOCK market never lets go of a good takeover rumour - particularly one that looks eminently feasible. For the umpteenth time the story of an Asda takeover of supermarket rival Safeway was given a whirl and, in heavy trading, Asda shares added 2.75p to 154.75p and Safeway 8.5p to 298.5p.

There were, it was alleged, some shrewd buyers chasing the shares. Whether they decided to alight on the supermarket twosome on a particularly dull, uneventful session may, of course, have been pure coincidence.

Asda and Safeway have talked merger. Eighteen months ago the two abandoned discussions when it became apparent that Westminster would not be too happy about any deal.

But, argued yesterday's buyers, times change and with the new wealth creation attitude at the Department of Trade and Industry, the supermarketeers had been tempted to resume talks.

Since the earlier negotiations ended, there have been a number of flurries as stories have circulated of new talks. The shares of the two chains are well below their peaks. Asda hit 218.75p last year; Safeway topped 400p two years ago.

Footsie spent the day fretting about New York and reduced an 82.2 points deficit to 9.7 at 5,770.2 when US shares displayed rather more resilience than expected. It was the sixth fall on the trot. Undercard shares weakened although takeovers, real and rumoured, continued to cast their spell.

Any share which had been surfing higher on the back of, sometimes vague, Internet associations come under pressure. Dixons fell 41.5p to 982.5p and Reuters 39.5p to 793.5p. EMI, with the added discomfort of any lack of takeover action, lost 30.75p to 421.75p. Psion, with a profits warning to boot, retreated 115p to 832.5p.

But BSkyB, on its better-than-expected digital TV expansion, gained 60.5p to 474.75p despite a sharp profits fall. Its digital success ruffled Carlton Communications, one of the two rival Ondigital providers, down 38p to 596p. Granada, the other Ondigital adventurer, lost 8.5p to 1,126.5p.

Unilever, in retreat for most of this year, rallied 36.5p to 582.5p as the market indulged in another of its favourite games, arbitraging between the British and Dutch ends of the food and soap behemoth.

National Power rose 11.5p to 511.5p and United Utilities, 9p to 812p. The two admitted having held merger talks.

GRE, the insurance group, fell a further 2.75p to 344p as bidder Sun Life & Provincial gave up another 9p to 460p. The bid was worth around 390p when it was agreed.

Banks were firmer with Lloyds TSB, figures tomorrow, up 7p to 758p. Allied Irish Bank, said to be a Lloyds target, was given another whirl but, after an early 37.5p gain, settled for a 6p plus at 1,111p.

Booker, the cash-and-carry chain, was another bid candidate to run out of steam. At one time up 7p, the shares ended 1.5p higher at 67.5p.

But excitement intensified at Field, the packaging group. The shares firmed 12.5p to 356p after a bidding war between two US groups erupted. Shorewood launched an agreed 350p a share offer, topping a 320p shot from Chesapeake which let it be known that it may well return to the fray.

Cleveland, a property group, held at 101p after rejecting a "wholly inadequate" offer, and loss adjuster Pycraft & Arnold firmed to 66.5p after a cash and shares offer from Fishers International, a financial services group.

Eclipse Blinds, up 30p at 87.5p, said it was in talks and Pubs `n' Bars held at 55p after confirming it was talking to the Real Leisure pubs chain. Lionheart, a household goods group, succumbed to profit taking, falling 0.5p to 5.5p, after saying it was in talks with a potential bidder.

Vaux, the brewing and hotels group rocked by a boardroom brawl, frothed 28p higher to 301.5p on the belief that the row has left the group open to a takeover strike.

Monument Oil & Gas flared 4.5p to 41.5p with corporate activity in the oil industry prompting suggestions that it could soon be a target.

Reunion Mining, which has admitted bid talks, rose a further 12.5p to 88p, and GB Railways, which denied bid action, steamed ahead, adding 13.5p to 178.5p.

Racal Electronic fell 10.5p to 378p ahead of a Henderson Crosthwaite investment dinner at London's Howard Hotel. Henderson was also at the nearby Savoy Hotel where Ramco Energy, unchanged at 230p, was the subject of an investment dinner.

British American Tobacco fell 20p to 613p following reports that rival Philip Morris had been successfully sued by a smoker who contracted cancer.

Johnson Matthey, the metals group, eased 12.5p to 440p as analysts left to examine its American operations.

Phytopharm, developing drugs from plants, sprouted 26p to 201.5p following coverage of the potential lurking in South Africa's vegetation.

Keystone Software fell 4.5p to 12p. It is aiming to raise pounds 1.5m through a placing and open offer at 10p a share.

SEAQ VOLUME: 958.2m

SEAQ TRADES: 70,661

GILTS INDEX: 115.74 +018

WILLIAM BAIRD, the textile group, may be in play. The shares rose 10p to 96p after a 7p gain on Tuesday.

Some buyers have been attracted by the 13 per cent dividend yield. But there are also suggestions of corporate action with, perhaps, a venture capitalist looking at the strength of the group and pondering a break up bid. Baird has said it expects last year's profits before exceptionals to be around pounds 30m.

MATALAN, the discount clothing chain, has defied the retail gloom. The shares rose 13p to 465p, highest since last spring's flotation. They seem destined to move into the FTSE 250 index after next month's quarterly review. There is already evidence of tracker funds preparing for the group's elevation. Engineer Rotork arrived in the mid cap index yesterday, ending 3p higher at 399p, a peak. It replaced advertising group Abbott Mead Vickers.

Arts and Entertainment
TVShow's twee, safe facade smashed by ice cream melting scandal
News
newsVideo for No campaign was meant to get women voting
Sport
Wayne Rooney talks to the media during a press conference
sport
Arts and Entertainment
tv
PROMOTED VIDEO
News
ebooksAn evocation of the conflict through the eyes of those who lived through it
Sport
Alexis Sanchez celebrates after scoring his first goal for Arsenal in the Champions League qualifier against Besiktas
sportChilean's first goal for the club secures place in draw for Champions League group stages
News
i100
News
Down time: an employee of Google uses the slide to get to the canteen
scienceBosses are inventing surprising ways of making us work harder
Arts and Entertainment
Amis: 'The racial situation in the US is as bad as it’s been since the Civil War'
booksAuthor says he might come back across Atlantic after all
Extras
indybest
Latest stories from i100
Have you tried new the Independent Digital Edition apps?
Independent Dating
and  

By clicking 'Search' you
are agreeing to our
Terms of Use.

iJobs Job Widget
iJobs Money & Business

PMO Analyst - Risk - Banking - London - £350-£400

£350 - £400 per day: Orgtel: PMO Analyst - Risk - Banking - London - £350 - £4...

C# Developer (C#, ASP.NET Developer, SQL, MVC, WPF, Real-Time F

£40000 - £48000 per annum + benefits+bonus+package: Harrington Starr: C# Devel...

C# Swift Payment Developer (C#, ASP.NET, .NET, MVC, Authorize.N

£45000 - £60000 per annum + benefits+bonus+package: Harrington Starr: C# Swift...

DevOps Engineer - Linux, Shell, Bash, Solaris, UNIX, Salt-Stack

Negotiable: Harrington Starr: A fast growing Financial Services organisation b...

Day In a Page

Israel-Gaza conflict: No victory for Israel despite weeks of death and devastation

Robert Fisk: No victory for Israel despite weeks of devastation

Palestinians have won: they are still in Gaza, and Hamas is still there
Mary Beard writes character reference for Twitter troll who called her a 'slut'

Unlikely friends: Mary Beard and the troll who called her a ‘filthy old slut’

The Cambridge University classicist even wrote the student a character reference
America’s new apartheid: Prosperous white districts are choosing to break away from black cities and go it alone

America’s new apartheid

Prosperous white districts are choosing to break away from black cities and go it alone
Amazon is buying Twitch for £600m - but why do people want to watch others playing Xbox?

What is the appeal of Twitch?

Amazon is buying the video-game-themed online streaming site for £600m - but why do people want to watch others playing Xbox?
Tip-tapping typewriters, ripe pongs and slides in the office: Bosses are inventing surprising ways of making us work harder

How bosses are making us work harder

As it is revealed that one newspaper office pumps out the sound of typewriters to increase productivity, Gillian Orr explores the other devices designed to motivate staff
Manufacturers are struggling to keep up with the resurgence in vinyl records

Hard pressed: Resurgence in vinyl records

As the resurgence in vinyl records continues, manufacturers and their outdated machinery are struggling to keep up with the demand
Tony Jordan: 'I turned down the chance to research Charles Dickens for a TV series nine times ... then I found a kindred spirit'

A tale of two writers

Offered the chance to research Charles Dickens for a TV series, Tony Jordan turned it down. Nine times. The man behind EastEnders and Life on Mars didn’t feel right for the job. Finally, he gave in - and found an unexpected kindred spirit
Could a later start to the school day be the most useful educational reform of all?

Should pupils get a lie in?

Doctors want a later start to the school day so that pupils can sleep later. Not because teenagers are lazy, explains Simon Usborne - it's all down to their circadian rhythms
Prepare for Jewish jokes – as Jewish comedians get their own festival

Prepare for Jewish jokes...

... as Jewish comedians get their own festival
SJ Watson: 'I still can't quite believe that Before I Go to Sleep started in my head'

A dream come true for SJ Watson

Watson was working part time in the NHS when his debut novel, Before I Go to Sleep, became a bestseller. Now it's a Hollywood movie, too. Here he recalls the whirlwind journey from children’s ward to A-list film set
10 best cycling bags for commuters

10 best cycling bags for commuters

Gear up for next week’s National Cycle to Work day with one of these practical backpacks and messenger bags
Paul Scholes: Three at the back isn’t working yet but given time I’m hopeful Louis van Gaal can rebuild Manchester United

Paul Scholes column

Three at the back isn’t working yet but given time I’m hopeful Louis van Gaal can rebuild Manchester United
Kate Bush, Hammersmith Apollo music review: A preamble, then a coup de théâtre - and suddenly the long wait felt worth it

Kate Bush shows a voice untroubled by time

A preamble, then a coup de théâtre - and suddenly the long wait felt worth it
Robot sheepdog technology could be used to save people from burning buildings

The science of herding is cracked

Mathematical model would allow robots to be programmed to control crowds and save people from burning buildings
Tyrant: Is the world ready for a Middle Eastern 'Dallas'?

This tyrant doesn’t rule

It’s billed as a Middle Eastern ‘Dallas’, so why does Fox’s new drama have a white British star?