pounds 450m Keebler sell-off expected at United Biscuits

MARKET REPORT

Shares in the troubled United Biscuits were actively traded yesterday amid a rumour that it had found a buyer for its Keebler snacks business in the US. Dealers were talking about a sale price of between pounds 450m and pounds 500m.

More than 3million shares were traded and the price closed 2p higher at 286p, having touched 294.5p at one time during the session.

The likely buyer for Keebler, according to dealers, is one of four US groups - PepsiCo, Campbell Soups, Nabisco and General Mills.

UB as a whole is still viewed in some quarters as a possible take-over target for Cadbury Schweppes, down 10p to 529p. Cadbury expressed an interest in UB two years ago. One dealer added that Nestle could not be ruled out of any possible take-over strike.

The sale of Keebler now would come as a welcome relief for UB, which has been struggling to make headway in its main markets principally because of fierce international competition in snacks. Cash from the disposal would also bolster the company's financially stretched balance sheet.

A bid for UB was just one of dozens of rumours that were circulating around the market yesterday. But for the intervention of a soft opening on Wall Street, the rumours looked set to drive share prices to all-time highs.

The FT-SE 100 share index, which was almost 23 points higher in morning trading despite the release of worrying public sector borrowing requirement data, finished at 3,562.2, up 4.9. The all-time closing peak was set a month ago at 3,570.8.

Trading volumes were better than Monday's, but the final tally of 657.7 million shares to change hands was not the kind of figure to associate with yesterday's early runaway performance by the FT-SE 100 index.

Shares in Gartmore, the fund management group, closed 5p lower at 288p amid talk that National Westminster, up 4p to 644p, had abandoned its take-over plans. City sources said that it had pulled out of the bidding because it thought the likely pounds 400m asking price was too high, given Gartmore's heavy dependence on business with institutional clients. This contrasted with NatWest's strategy of concentrating on business with private investors.

BAT Industries, up 1p at 550p, is till though to have its hat in the ring. So to is ABN Amro, owners of Hoare Govett stockbrokers, Dresdner Bank and Nationsbank.

Meanwhile, NatWest yesterday dipped into its bulging purse for $135m (pounds 86m) to buy Gleacher, the privately owned US-based mergers and acquisitions firm.

Analysts expect the deal to be just one of several to be rolled out by NatWest in the coming months. The bank is being strongly tipped as a suitor for Royal Bank of Scotland, ahead 9p to 534p.

Analysts at SBC Warburg reckon that a predator for Royal Bank of Scotland would have to pay between 680p and 750p a share, valuing the company at between pounds 5.4bn and pounds 6bn. The valuation includes a pounds 1.76bn price tag for the bank's Direct Line insurance business.

Almost 7million shares in Royal Bank of Scotland were traded yesterday as the latest wave of bid rumours circulated. The speculative list of other suitors includes HSBC, up 3p to 951p, and Abbey National, down 6p to 557p.

ADT were a strong market, spurting 22p to 920p on strong speculation that the Bermuda-based company, headed by Michael Ashcroft, was on the verge of selling its European car auction business. This was thrown open to the highest bidder back in May at a reserve price believed to be around pounds 200m. Prudential Ventures is understood to be competing strongly against an American auction company to buy the operation, which made more than pounds 23m of profits last year.

It was also a good day for Tottenham Hotspur supporters as the shares soared to an all-time high of 195p, up 14p on the day. The annual meeting is being held today, and there is a chance that Alan Sugar, chairman, may announce that he is to lessen his grip on the company, selling shares to some institutions.

Manchester United fans had a small cheer as the price firmed 1p to 197p. But Millwall continues to languish at 3p.

In oils, Arco dropped out of the running for Aran Energy as its pounds 178m take-over offer was trumped by a pounds 203m cash bid. Aran has yet to decide whether to recommend Statoil's terms.

Corporate results were thin on the ground, and those that did make statements met with mixed reactions. They included Tie Rack, up 4p to 154p, Paterson Zochonis, up 3p to 463p, and Henry Boot, unchanged at 207p.

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