Market Report: Takeover bids, real and rumoured, boost second liners

The stock market is mesmerised by the tantalising prospect of a frenzied takeover spree.

After merger Monday, when deals estimated at pounds 67bn were on offer, the market has cast around, seeking likely victims.

With many companies cash rich and their management prepared to chance their arm there is talk the City's corporate community is in danger of being overwhelmed by the activity.

Takeover bids, real and rumoured, have in recent weeks provided a spur for non-Footsie shares with the FTSE 250 index and the FTSE SmallCap index hitting new peaks.

There is also a distinct impression many second and third liners offer better investment value than their peers.

Yet, although the two indices have climbed to new highs, they still lag a long way behind Footsie.

Since the start of the year Footsie, including dividends, has risen a remarkable 31 per cent; the 250 index has managed a 13 per cent gain and the SmallCap 12.3 per cent.

Much of yesterday's takeover speculation was among supporting shares. BICC, in late hectic trading, surged 21.5p to 208p, highest for six months, on excited talk of a bid today. The Italian Pirelli group is the name in the frame.

English China Clays, up 14p to 290.5p, was another tipped for action with RioTinto rumoured as the predator.

T&N rose 2.5p to 256p as US group Federal Mogul lifted its offer to 260p; not high enough, some argue, to scare off a counter bidder. WH Smith, planning a break-up, edged ahead 3.5p to 405.5p.

Little engineer Widney jumped 9.5p to 45.5p after a sharp advance forced the admission it was in bid talks.

Among Footsie constituents EMI had an early spin, up 15p, on renewed speculation of a Seagram bid, but by the close the gain had been cut to 3p at 613.5p.

BT, on the bid mania engulfing the American telephone industry, led Footsie with a 24.5p gain to 471.5p. Ladbroke managed a 10p canter to 307.5p and Vodafone 10.5p to 357.5p.

BAT Industries softened 4.5p to 596.5p after agreeing terms with Zurich Insurance.

Norwich Union, where whispers of a Lloyds TSB bid are often heard, enjoyed another busy session, climbing 6p to 362p, highest since flotation. Royal & Sun Alliance fell 7p to 624.5p on profit worries.

National Power, up 14.5p to 565.5p, and PowerGen, 7p to 759.5p, enjoyed Societe Generale Strauss Turnbull backing. SBC Warburg put an 800p target price on PG.

Coach builder Henlys motored 25p to 396p. Talk of major contracts is in the air. Stagecoach, which saw analysts on Wednesday, and Cowie are thought to be near placing orders. The company is also believed to be close to clinching a Far Eastern acquisition.

Capita, a management group, rose 24p to 313.5p on US presentations and Vega, the software provider hit by a profit warning last month, rose 20p to 245p after winning an RAF contract worth pounds 6m.

Jarvis, the construction and rail maintenance group, advanced 31p to 318.5p; it is near to agreeing terms with the Government for the takeover of the Fastline maintenance company.

Medeva introduced a little comfort into the drugs sector, gaining 20.5p to 245.5p after offering optimistic projections for its hepatitis drug.

Newsquest, the newspaper group, made a disappointing debut, reaching 252.5p from a 250p placing.

Property developer Wiggins touched a 12.5p peak after confirming it intends to resume dividend payments.

Coffee Republic frothed 6p higher to 26p. Its first deal since coming to market, via a reverse takeover of the Arion property business, is a link with French Connection to run a coffee bar at the fashion chain's Covent Garden store.

Metalsrussia, which arrived on Wednesday, rose a further 9p to 79.5p. It supplies steel from the former Soviet Union to Asia.

Chemical Design fell 20p to 90p; the shares have collapsed 120p in two days on a profit warning. Titon, a ventilation group, fell 14p to 92.5p after warning profits would be below expectations at around pounds 1.5m.

Start your day with The Independent, sign up for daily news emails
ebooks
ebooksAn introduction to the ground rules of British democracy
Latest stories from i100
Have you tried new the Independent Digital Edition apps?
SPONSORED FEATURES
Independent Dating
and  

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

iJobs Job Widget
iJobs Money & Business

SThree: Experienced Recruitment Consultant

£20000 - £40000 per annum + OTE + Incentives + Benefits: SThree: Established f...

SThree: Trainee Recruitment Consultant

£20000 - £25000 per annum + OTE 40/45k + INCENTIVES + BENEFITS: SThree: The su...

Recruitment Genius: Collections Agent

£14000 - £16000 per annum: Recruitment Genius: This company was established in...

SThree: Trainee Recruitment Consultant

£20000 - £25000 per annum + OTE 40k: SThree: SThree are a global FTSE 250 busi...

Day In a Page

Refugee crisis: David Cameron lowered the flag for the dead king of Saudi Arabia - will he do the same honour for little Aylan Kurdi?

Cameron lowered the flag for the dead king of Saudi Arabia...

But will he do the same honour for little Aylan Kurdi, asks Robert Fisk
Our leaders lack courage in this refugee crisis. We are shamed by our European neighbours

Our leaders lack courage in this refugee crisis. We are shamed by our European neighbours

Humanity must be at the heart of politics, says Jeremy Corbyn
Joe Biden's 'tease tour': Could the US Vice-President be testing the water for a presidential run?

Joe Biden's 'tease tour'

Could the US Vice-President be testing the water for a presidential run?
Britain's 24-hour culture: With the 'leisured society' a distant dream we're working longer and less regular hours than ever

Britain's 24-hour culture

With the 'leisured society' a distant dream we're working longer and less regular hours than ever
Diplomacy board game: Treachery is the way to win - which makes it just like the real thing

The addictive nature of Diplomacy

Bullying, betrayal, aggression – it may be just a board game, but the family that plays Diplomacy may never look at each other in the same way again
8 best children's clocks

Tick-tock: 8 best children's clocks

Whether you’re teaching them to tell the time or putting the finishing touches to a nursery, there’s a ticker for that
Isis profits from destruction of antiquities by selling relics to dealers - and then blowing up the buildings they come from to conceal the evidence of looting

How Isis profits from destruction of antiquities

Robert Fisk on the terrorist group's manipulation of the market to increase the price of artefacts
Labour leadership: Andy Burnham urges Jeremy Corbyn voters to think again in last-minute plea

'If we lose touch we’ll end up with two decades of the Tories'

In an exclusive interview, Andy Burnham urges Jeremy Corbyn voters to think again in last-minute plea
Tunisia fears its Arab Spring could be reversed as the new regime becomes as intolerant of dissent as its predecessor

The Arab Spring reversed

Tunisian protesters fear that a new law will whitewash corrupt businessmen and officials, but they are finding that the new regime is becoming as intolerant of dissent as its predecessor
King Arthur: Legendary figure was real and lived most of his life in Strathclyde, academic claims

Academic claims King Arthur was real - and reveals where he lived

Dr Andrew Breeze says the legendary figure did exist – but was a general, not a king
Who is Oliver Bonas and how has he captured middle-class hearts?

Who is Oliver Bonas?

It's the first high-street store to pay its staff the living wage, and it saw out the recession in style
Earth has 'lost more than half its trees' since humans first started cutting them down

Axe-wielding Man fells half the world’s trees – leaving us just 422 each

However, the number of trees may be eight times higher than previously thought
60 years of Scalextric: Model cars are now stuffed with as much tech as real ones

60 years of Scalextric

Model cars are now stuffed with as much tech as real ones
Theme parks continue to draw in thrill-seekers despite the risks - so why are we so addicted?

Why are we addicted to theme parks?

Now that Banksy has unveiled his own dystopian version, Christopher Beanland considers the ups and downs of our endless quest for amusement
Tourism in Iran: The country will soon be opening up again after years of isolation

Iran is opening up again to tourists

After years of isolation, Iran is reopening its embassies abroad. Soon, there'll be the chance for the adventurous to holiday there