Market Report: Takeover stampede pushes Footsie to fifth consecutive peak

Blue chips maintained their record breaking run, hitting a high for the fifth consecutive session. The Footsie gain, however, was the smallest in the current winning streak, 13.8 points to 5,612.8.

Corporate action was again the main spur, with the pounds 4bn PacifiCorp bid for Energy and Great Universal Stores' pounds 1.6bn strike at struggling Argos creating excitement. The pounds 382m Australian offer for Henderson, the fund manager, was another positive influence.

The outstanding feature in the latest takeover stampede is that cash, rather than high-flying equity, is king. Overseas companies, which have played a big role in the bid spree, invariably offer cash and PacifiCorp and Australia's AMP are merely following the accepted pattern. But GUS and the much smaller Enterprise Inns, buying Gibbs Mew, opted for cash.

Energy and Argos went above their respective bid prices as the stock market sensed more action. Energy gained 21p to 775.5p against a 766p offer, and Argos went to 630p, up 188p, compared with the 570p GUS shot. GUS rose 29p to 762p and Kingfisher, seen as a possible counter-bidder, put on 2.5p to 961p, recovering a 10.5p fall. Henderson fell 42.5p to 1,622.5p.

For once blue chips did not hog the limelight, with the Midcap and Smallcap indices making headway. The last time Footsie was in such rampant form was in May last year when Labour swept to power.

Engineers, depressed by Asia and sterling's strength. staged a comeback. Siebe led the way with a 67p advance to 1,147p. TI Group, 25p to 462p, and LucasVarity, 5.5p to 214p, joined in.

Builders too experienced a strong, if not through-the-roof, session on the back of the encouraging Bryant figures. The sector climbed 3.3 per cent with Bryant up 9p to 122p and George Wimpey 9p to 102.5p.

The latest lottery scandal produced a mixed response from the Camelot owners. Cadbury Schweppes, partly on US considerations, hardened 23p to 759p; Racal Electronic lost 5p to 260p and De La Rue eased 6p to 361.5p.

Whitbread was flat, off 2.5p at 965p, as a 3.5 million parcel sought a home. Diageo added 16.5p to 568.5p on the calmer Asian outlook and positive comment from Morgan Stanley. Gibbs frothed 30.5p higher to 339p on the Enterprise bid. The pubs chain clinched control by lifting its stake to 58.3 per cent, buying 25.7 per cent at 349p.

Beales Hunter, an electrical group, rose 12p to 70.5p as it joined the takeover bandwagon by declaring it had received "a number of approaches" but was not seeking talks.

William Morrison, never far from bid speculation, hardened 4p to 261p as a family shareholder sold 2 million shares at 260p, retaining 5.1 per cent.

Speculative activity continued to swirl through financials with Abbey National hitting a 1,312p peak with a 62p gain. Ripples of the GUS strike spread through retailers with MFI 10p stronger at 131p. Elsewhere Enterprise Oil jumped 21p to 590.5p on bid gossip.

Glaxo Wellcome, the star of the merger mania, predictably fell back on profit-taking, down 56p to 1,927p. SmithKline Beecham softened 14.5p to 830.5p and Zeneca lost 88p to 2,597p.

Tate & Lyle, where bid talk had helped lift the shares to a 563p peak, fell 41p to 507p on a profits warning.

KS Biomedix was the latest biotech to enjoy a run, up 67p to 225.5p following positive results from the phase two trial on its rheumatoid arthritis treatment.

Range Cooker, which slipped quietly on to the market at 6.25p in December, held at 9p after reporting interim profits flared from pounds 291,500 to pounds 1.05m.

Pex, the sock maker, is likely to produce disappointing figures in April. Although interim profits were higher, sales in October and November have pulled back the year's performance.

Pace Micro Technology, involved in a pounds 5m cost cutting exercise, at last won orders from BSkyB for digital set-top boxes; the shares gained 10p to 40p, they have been 241.5p. Amstrad, another beneficiary of BSkyB set- top orders, improved 3.5p to 32.5p. The satellite broadcaster, on slightly better than expected results, gained 19p to 361p.

United Overseas, selling surplus stock, improved 3p to 95p, a peak. Year's profits of pounds 9.1m against pounds 7.3m are expected.

Innovative Technologies put on 14.5p to 116p on a deal to supply the German Beiersdorf group with wound dressings. James Noble, former finance director of British Biotech, is to become chairman.