Norwich Union on a high as takeover rumours swirl

MARKET REPORT

Norwich Union was never expected to enjoy a long stock market life. The popular view when it floated in June was its days of independence were numbered. If rumours drifting around yesterday have any substance, the famous old insurer will soon be bowing to that seemingly inevitable takeover bid.

In busy trading its shares rose 10p to 345.5p, highest yet. The story going the rounds was that Halifax, off 3.5p at 714p, was preparing a predatory strike.

Norwich's perceived vulnerability was highlighted by Halifax's comments it was looking for acquisitions and insurance was one of the areas it fancied. The building society-turned-bank has a pounds 3.5bn war chest. It should therefore have no difficulty absorbing Norwich with a pounds 6.8bn capitalisation.

The bid talk mingled with the usual pre-index meeting activity. Norwich is not yet a constituent of any of the FTSE share indices. It will go into Footsie next month together with Billiton, the mining group, and former building society, Woolwich.

Yet the various tracker funds, which attempt to mirror Footsie or other indices, have had plenty of time to build stakes in Norwich, Billiton and Woolwich. They could also have picked up shares in the flotations.

Billiton, which produced figures yesterday, is also at a peak; up 6p to 248p. Woolwich is well below its best level. The shares rose 2p to 293.5p against a 334p closing high.

The Footsie steering committee meets on 10 September. Any changes take effect on 22 September.

On present form Tate & Lyle, Hanson and Imperial Tobacco are set for relegation to the FTSE 250 index.

Hanson's departure is due to its four-way demerger which removed its energy and chemical operations as well as the other likely casualty, Imps. Even so, its loss of Footsie membership is another illustration of the demise of the conglomerate culture.

It will be the first time since the index was created in 1964 that Hanson has not been a constituent.

A possible irony is that Williams, which lost its place early this year, could just creep back into Footsie. It was once a takeover marauder in the best conglomerate fashion. Recently it shed its conglomerate image by concentrating on fire protection and security products. The takeover of Chubb Security boosted its size and, at 351.5p, it is valued at pounds 2.66bn.

The market experienced another uneventful session with Footsie, in moderate trading, managing a 20.6 points gain to 4,906.9.

Rank, the leisure group, headed the blue-chip leader board with a 14.5p gain to 360p, only 24.5p from its year's low. The modest rally is probably due to the group's share buy-back programme, which has been going on this month, and rumours Bass, emerging as the leisure bidder for all seasons, could be interested.

Vague bid talk lifted Abbey National 16.5p to 839p.

Whitbread fell 13.5p to 795p as HSBC, which visited the brewer on Tuesday, appeared to make cautious noises. Beer sales in June and July were said to be lower than a year ago; a not altogether surprising development as the European Cup inflated sales in 1996.

HSBC was also said to be negative on Scottish & Newcastle, ahead of today's yearly meeting. NatWest Securities, however, expects an upbeat message from the nation's biggest brewer. Scottish fell 8.5p to 723.5p

Carlton Communications softened 14.5p to 495p on the Merrill Lynch forecast of a pounds 31m hit from the abolition of the Channel Four funding formula. Ionica, the radio-based telephone group, has failed to dial the right numbers since it floated last month. Offered at 390p, the shares rose to 421p on the first day of dealings, but have been in decline since. They fell, reflecting disappointing figures, a further 16.5p to 332.5p.

Cadbury Schweppes, ahead of an analyst visit to its US operations, rose 4p to 587p. There are worries Cadbury's American soft drink side is being squeezed unmercifully by the cola giants, Coca-Cola and Pepsi Cola. In some quarters the Cadbury visit is seen as expressing confidence about its transatlantic business. ABN Amro Hoare Govett put the shares on its buy list.

Kalamazoo, the computer group, had a volatile session, ending 9.5p up at 85p. It has been in bid talks but opted for a deal with Reynolds & Reynolds, a US group. The Americans are pumping in pounds 13.6m at 130p a share, taking their stake to 26.5 per cent. At one time Kalamazoo was up 29.5p.

Suggested Topics
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?
Independent Dating
and  

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

iJobs Job Widget
iJobs Money & Business

Recruitment Genius: Mortgage Advisor - OTE £95,000

£40000 - £95000 per annum: Recruitment Genius: This is an exciting opportunity...

SThree: Trainee Recruitment Consultant

competitive: SThree: Are you passionate about sales?Do you have a keen interes...

Recruitment Genius: Loan Adviser - OTE £30,000

£17000 - £30000 per annum: Recruitment Genius: This is an exciting opportunity...

Recruitment Genius: Sales Assistant / Buyer

£15000 - £17000 per annum: Recruitment Genius: This company offers a range of ...

Day In a Page

Greece debt crisis: EU 'family' needs to forgive rather than punish an impoverished state

EU 'family' needs to forgive rather than punish an impoverished state

An outbreak of malaria in Greece four years ago helps us understand the crisis, says Robert Fisk
Gaza, a year on from Operation Protective Edge: The traumatised kibbutz on Israel's front line, still recovering from last summer's war with Hamas

Gaza, a year on from Operation Protective Edge

The traumatised kibbutz on Israel's front line, still recovering from last summer's war with Hamas
How to survive electrical storms: What are the chances of being hit by lightning?

Heavy weather

What are the chances of being hit by lightning?
World Bodypainting Festival 2015: Bizarre and brilliant photos celebrate 'the body as art'

World Bodypainting Festival 2015

Bizarre and brilliant photos celebrate 'the body as art'
alt-j: A private jet, a Mercury Prize and Latitude headliners

Don't call us nerds

Craig Mclean meets alt-j - the math-folk act who are flying high
How to find gold: The Californian badlands, digging out crevasses and sifting sludge

How to find gold

Steve Boggan finds himself in the Californian badlands, digging out crevasses and sifting sludge
Singing accents: From Herman's Hermits and David Bowie to Alesha Dixon

Not born in the USA

Lay off Alesha Dixon: songs sound better in US accents, even our national anthem
10 best balsamic vinegars

10 best balsamic vinegars

Drizzle it over salad, enjoy it with ciabatta, marinate vegetables, or use it to add depth to a sauce - this versatile staple is a cook's best friend
Wimbledon 2015: Brief glimpses of the old Venus but Williams sisters' epic wars belong to history

Brief glimpses of the old Venus but Williams sisters' epic wars belong to history

Serena dispatched her elder sister 6-4, 6-3 in eight minutes more than an hour
Greece says 'No': A night of huge celebrations in Athens as voters decisively back Tsipras and his anti-austerity stance in historic referendum

Greece referendum

Greeks say 'No' to austerity and plunge Europe into crisis
Ten years after the 7/7 terror attacks, is Britain an altered state?

7/7 bombings anniversary

Ten years after the terror attacks, is Britain an altered state?
Beautiful evening dresses are some of the loveliest Donatella has created

Versace haute couture review

Beautiful evening dresses are some of the loveliest Donatella has ever created
No hope and no jobs, so Gaza's young risk their lives, climb the fence and run for it

No hope and no jobs in Gaza

So the young risk their lives and run for it
Fashion apps: Retailers roll together shopping and social networking for mobile customers

Fashion apps

Retailers roll together shopping and social networking for mobile customers
The Greek referendum exposes a gaping hole at the heart of the European Union – its distinct lack of any genuine popular legitimacy

Gaping hole at the heart of the European Union

Treatment of Greece has shown up a lack of genuine legitimacy