Market Report: Traders gorge themselves on appetising bid menu

A NEW outbreak of bid fever kept the market afloat yesterday. Fund managers awash with cash are desperate to spot the next takeover targets and dealers are constantly being urged to pile into bid-friendly sectors.

The long list of bid preys gained another name yesterday in Compass. The catering giant jumped 31p to 727.5p in good volume of nearly 4 million as buyers tucked into its shares. Traders were served an appetiser of rumours that trading in Compass's main divisions is booming, but the main course was talk of a strike from a rival.

Freshly-baked stories suggested that Compass may be on the bid menu of Granada, 3p better at 513p. The story had a certain logic; according to the whispers, the leisure and TV giant is working on a split of its hotels and catering division from its media activities. If and when the carve- up happens, Granada will need to boost its food side and, at less than pounds 5bn, Compass would be a tasty and affordable morsel.

Some stubborn dealers still believe that Compass could be sought by the business services group, Rentokil Initial. However, stronger rumours suggest that the pest control giant, 13.25p better at 220.5p at the start of an American roadshow, is working on a pounds 700m share buyback programme and, if anything, could be vulnerable to a takeover itself.

The bid stories were not confined to food and pesticides. British Telecom fell 11.5p to 1,090.5p on fears that it might team up with Rupert Murdoch's News Corp to bid for French conglomerate Vivendi. BT's rivals were also caught up in the consolidation wave; Orange squeezed 41p higher to 1,606p on growing hopes that Mannesmann's offer could be trumped by a bid by France Telecom and Vodafone AirTouch, 1p better at 318p. COLT Telecom (third-quarter numbers today) rose 45p to 1,865p on continued takeover talk.

All this bid excitement helped to push blue chips higher. The FTSE 100 ended 17.7 points better at 6,374.3 despite a wobbly opening for the Dow in New York, unsettled as it was by Microsoft's legal troubles.

The leading index was also boosted by BP Amoco, its biggest constituent. The oil giant flared 25p higher to 566p after good third-quarter results and a deal with the Alaskan government over its Arco acquisition. However, the rally petered out in the afternoon as US arbitrageurs started selling BP and buying Arco as a cheap way into the UK group.

Building stocks were also rocked by bids, real and imagined. Cement-maker Rugby rose a solid 14.5p to 132.5p after agreeing a 137.5p-per-share offer from rival RMC, down 40p to 870p. RMC brokers ABN Amro and Warburg bolstered the offer by buying 19.9 per cent of Rugby in the market.

Fellow building materials groups Blue Circle, up 4.25p to 316.25p, and Aggregate Industries, 0.75p firmer at 75.75p, are rumoured to be the next to go. Tarmac fell 5p to 569p despite whispers of share-buying by its bidder Anglo American, flat at 3,300p.

Banks are another hot sector. NatWest jumped 4p to 1,446p on growing hopes that Royal Bank of Scotland, 15p lower to 1,389p, will counterbid.

Utilities took a bit of a hammering after JP Morgan pulled the plug on the sector. Powergen, 24p down to 586p, United Utilities, 17.5p lower to 581.5p, and BG, 8.5p worse at 325.25p, were hit badly. Thames Water flushed 12.5p lower to 904.5p despite whispers that it had asked RWE of Germany to bid for it.

Corus Group, the old British Steel, shed 4.75p to 108.75p after an institution offloaded a line of stock through Morgan Stanley.

The midcap failed to follow the leading index and closed 6.6 points lower at 5,811.7, while the Small Cap fared better with a 7.8 rise to 2,705.8.

Troubled retailer Storehouse bagged a 4p rise to 80p on revived rumours of a bid from cash-rich shell Knutsford, down 7.5p to 202.5p, or entrepreneur Philip Green. Hopes of a property deal sent Selfridges 9.5p higher to 263.5p. However, other retailers were in the doldrums; Safeway lost 14.75p to 197.25p on profit-taking, while Arcadia slipped 2p to 155p after house broker CSFB reduced forecasts.

Financial group Gerrard rose 25.5p to 426.5p on rumours of upcoming good results, while rival Versailles climbed 10.5p to 213.5p on rehashed bid talk.

Picture-booth operator Photo-Me clicked 64p higher to 389p as investors rushed to buy stocks after a five-for-one split.

Bid talk helped media agency Cordiant to flash 7.5p higher to 211.5p , while whispers of a bad millennium season sent Thomson Travel 3.5p lower to a all-time low of 90p. The minnows were boosted by the craze for Web stocks.

Internet investor Cambury Investments soared 10.5p to a record 16.25p: punters are said to overdosing in the hope of a major deal. Rivals, 3.5p better to 13.75p, and evestment, 3.5p higher to 13p, were supported by similar rumours.

Vocalis, maker of a speech-activated software system, soared 14p to a best-ever 206p on whispers of new contracts, while software group Multimedia firmed 2.5p to 7.5p after admitting talks over a significant fund-raising exercise. Cash shell Blakes Clothing put on 1.5p to 4.75p on talk of a reverse takeover deal.

Pawnbroker Albermarle & Bond was flat at 51p despite talk of good trading, while restaurant tiddler Paramount digested a 7.5p rise to a yearly peak of 42p after unveiling a bid approach. The Money Channel beamed 37.5p higher to 133p after a deal with Granada Mediasales. Biotech group SkyePharma, on a US roadshow, shot 6.5p higher to 53.25p after Merrill Lynch said it is worth 95p.

Engineer Tex Holdings added 10p to 121.5p on rumours that upcoming results will be excellent. Software minnow Anite rose 3p to a 12-month high of 75p on broker upgrades and takeover talk, while whispers of a contract sent robot-maker Robotic Technology 33.5p higher to a record 375p.



GILTS INDEX: 107.82 -0.40

RECRUITMENT GROUP BNB Resources, flat at 138.5p, is back in the bid frame. Stories suggest that BNB has been contacted by a venture capitalist group with an offer of up to 200p a share to take the company private. Some traders believe that the board has so far rejected the approach. However, some optimistic punters hope that the venture capitalist - rumoured to be Apax Partners or Alchemy - could come back with a higher bid.

SOME HOT money is chasing software group Alphameric. Shares in the maker of a revolutionary kit for satellite broadcasting beamed 10p higher to 113p - a five-year high - on whispers that a large telecommunications company is having a look and that new contracts are on their way. France Telecom has been mooted in the past as a potential bidder. Insiders believe the technology could soon be licensed to a bookmaker or phone company.

The Banksy image in Folkestone before it was vandalised
Life and Style

Sales of the tablet are set to fall again, say analysts

football West Brom vs Man Utd match report: Blind grabs point, but away form a problem for Van Gaal
Arts and Entertainment
Gotham is coming to UK shores this autumn
tvGotham, episode 2, review
Arts and Entertainment
Bloom Time: Mira Sorvino
tvMira Sorvino on leaving movie roles for 'The Intruders'
First woman: Valentina Tereshkova
peopleNASA guinea pig Kate Greene thinks it might fly
Brian Harvey turned up at Downing Street today demanding to speak to the Prime Minister

Met Police confirm there was a 'minor disturbance' and that no-one was arrested

Arts and Entertainment
George Lucas poses with a group of Star Wars-inspired Disney characters at Disney's Hollywood Studios in 2010

George Lucas criticises the major Hollywood film studios

Chris Grayling, Justice Secretary: 'There are pressures which we are facing but there is not a crisis'

Does Chris Grayling realise what a vague concept he is dealing with?

ebooksAn unforgettable anthology of contemporary reportage
Life and Style
A street vendor in Mexico City sells Dorilocos, which are topped with carrot, jimaca, cucumber, peanuts, pork rinds, spices and hot sauce
food + drink

Trend which requires crisps, a fork and a strong stomach is sweeping Mexico's streets

Life and Style
The charity Sands reports that 11 babies are stillborn everyday in the UK
lifeEleven babies are stillborn every day in the UK, yet no one speaks about this silent tragedy
Blackpool is expected to become one of the first places to introduce the Government’s controversial new Public Space Protection Orders (PSPOs)

Parties threaten resort's image as a family destination

Life and Style
Northern soul mecca the Wigan Casino
fashionGone are the punks, casuals, new romantics, ravers, skaters, crusties. Now all kids look the same
Life and Style

I Am Bread could actually be a challenging and nuanced title

Latest stories from i100
Have you tried new the Independent Digital Edition apps?
Independent Dating

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

iJobs Job Widget
iJobs Money & Business

Customer Service Executive / Inbound Customer Service Agent

£18 - 23k + Benefits: Guru Careers: We are seeking a Customer Service Executiv...

ASP.NET Web Developer / .NET Developer

£60 - 65k + Benefits: Guru Careers: We are seeking a ASP.NET Web Developer / ....

Operational Risk Manager - Asset Management

£60,000 - £80,000: Saxton Leigh: Our client is an leading Asset Manager based...

Project Coordinator - 12 month contract

£27000 - £32000 Per Annum: Clearwater People Solutions Ltd: Our large charity ...

Day In a Page

Two super-sized ships have cruised into British waters, but how big can these behemoths get?

Super-sized ships: How big can they get?

Two of the largest vessels in the world cruised into UK waters last week
British doctors on brink of 'cure' for paralysis with spinal cord treatment

British doctors on brink of cure for paralysis

Sufferers can now be offered the possibility of cure thanks to a revolutionary implant of regenerative cells
Ranked seventh in world’s best tourist cities - not London, or Edinburgh, but Salisbury

Salisbury ranked seventh in world’s best tourist cities

The city is home to one of the four surviving copies of the Magna Carta, along with the world’s oldest mechanical clock
Let's talk about loss

We need to talk about loss

Secrecy and silence surround stillbirth
Will there be an all-female mission to Mars?

Will there be an all-female mission to Mars?

Women may be better suited to space travel than men are
Oscar Pistorius sentencing: The athlete's wealth and notoriety have provoked a long overdue debate on South African prisons

'They poured water on, then electrified me...'

If Oscar Pistorius is sent to jail, his experience will not be that of other inmates
James Wharton: The former Guard now fighting discrimination against gay soldiers

The former Guard now fighting discrimination against gay soldiers

Life after the Army has brought new battles for the LGBT activist James Wharton
Ebola in the US: Panic over the virus threatens to infect President Obama's midterms

Panic over Ebola threatens to infect the midterms

Just one person has died, yet November's elections may be affected by what Republicans call 'Obama's Katrina', says Rupert Cornwell
Premier League coaches join the RSC to swap the tricks of their trades

Darling, you were fabulous! But offside...

Premier League coaches are joining the RSC to learn acting skills, and in turn they will teach its actors to play football. Nick Clark finds out why
How to dress with authority: Kirsty Wark and Camila Batmanghelidjh discuss the changing role of fashion in women's workwear

How to dress with authority

Kirsty Wark and Camila Batmanghelidjh discuss the changing role of fashion in women's workwear
New book on Joy Division's Ian Curtis sheds new light on the life of the late singer

New book on Ian Curtis sheds fresh light on the life of the late singer

'Joy Division were making art... Ian was for real' says author Jon Savage
Sean Harris: A rare interview with British acting's secret weapon

Sean Harris: A rare interview with British acting's secret weapon

The Bafta-winner talks Hollywood, being branded a psycho, and how Barbra Streisand is his true inspiration
Tim Minchin, interview: The musician, comedian and world's favourite ginger is on scorching form

Tim Minchin interview

For a no-holds-barred comedian who is scathing about woolly thinking and oppressive religiosity, he is surprisingly gentle in person
Boris Johnson's boozing won't win the puritan vote

Boris's boozing won't win the puritan vote

Many of us Brits still disapprove of conspicuous consumption – it's the way we were raised, says DJ Taylor
Ash frontman Tim Wheeler reveals how he came to terms with his father's dementia

Tim Wheeler: Alzheimer's, memories and my dad

Wheeler's dad suffered from Alzheimer's for three years. When he died, there was only one way the Ash frontman knew how to respond: with a heartfelt solo album