Prices forge ahead as takeover action intensifies

Normal service was resumed on dealing screens across the City yesterday thanks to the strong overnight rally on Wall Street, and yet more hectic action on the takeover front. The market's nervous system, however, has yet to recover from the previous session's dash for the lifeboats by market makers, and dealers are preying that today's inflation figures for September will contain nothing but good news.

Events on Wall Street, though, are largely determining the direction of share prices in London, and there are fears that a poor third quarter company reporting season in America could send the FT-SE 100 index heading south for the winter.

Market-makers took stock of Wall Street's overnight performance, which saw the Dow Jones finish just five points adrift at the end of a day when prices were falling so fast at one time that limits on program trading had to be put into effect.

London prices opened slightly softer yesterday, and then forged ahead as investors digested the latest raft of takeover news involving Lloyds Bank for TSB, North West for Norweb, UUNET Technologies of the US for Unipalm, and Fisons throwing the towel in its fight against Rhone Poulenc.

The FT-SE 100 index closed 14.2 points higher at 3,474.3, having been up at 3,408.9 just before Wall Street opened. The strong tone was evident right through the market, and the FT-SE 250 gained 16.6 to 3,919.8. Volume trading was reasonably good with almost 800 million shares changing hands in more than 31,000 deals.

The appetite for more bids among dealers is insatiable, and the rumour mill about where the action will be is in overdrive. There is hardly a share sector which does not come with several strands of takeover speculation attached.

Gartmore, the fund management group, is the hot favourite soon to be taken under the wings of an adoptive parent from either Germany, the Netherlands or the UK.

Shares climbed 10p to 276p with dealers convinced that the 75 per cent stake owned by Banque Indosuez will be sold for upwards of pounds 400m before the month is out to either NatWest Bank, up 10.5p to 612p, Dresdner Bank or ABN Amro, the Dutch owner of the Hoare Govett firm of stockbrokers.

NatWest's advisers are understood to be burning copious amounts of midnight oil to thrash out a deal, which analysts believe will be a boon for the company and help it compete more effectively against Barclays, 2p firmer at 727p.

Bank shares, which ran up sharply on Monday on the original announcement of the merger between Lloyds and TSB were subjected to some profit-taking. Standard Chartered gave up 5p to 481p, and Royal Bank of Scotland lost 10p to 483p.

The terms of Lloyds deal were well received amid heavy trading. Almost 18 million shares were traded in Lloyds, which climbed 49p to 769p, and more than 26 million were dealt in TSB, up 19p to 369p.

Volume trading in Norweb, up 61p to pounds 11.47, was also high with more than 35.57 million going through the books as North West Water, down 22p to 573p, raided the market for stock after increasing its takeover terms.

North West's raid was very successful. Investors said yes faster than bank managers at the TSB, and North West picked up 25 per cent of Norweb's shares. The company is set to be back in the market this morning in an attempt to take its stake to 29.9 per cent.

Norweb is now recommending the offer, and dealers believe the higher offer will prove too much for the pockets of Texas Energy Partners. The consensus of opinion, however, is that the Americans will continue to strive to own a regional electricity company and London Electricity, which shot up 35p to 898p, is the favourite target. East Midlands, another of the Recs yet to attract a bid, closed 16p better at 877p.

Rumours about GEC, off a penny to 328.5p, bidding for a Rec resurfaced with Yorkshire Electricity, up 16p to 894p, the favourite target.

The market is also waiting for bid action to break out among water utilities, particularly a move soon by Lyonnais des Eaux of France for Northumbrian Water, 5p firmer at 990p.

Unipalm, the centre of a recent storm of anger when it announced that takeover terms would be considerably less than the prevailing 600p market price, added 4p to 414p on an all-share, pounds 97m recommended offer by UUNET.

Shares in BAT Industrieswere again in demand. More than 11.5 million were traded and the price advanced 11p to 544p on talk of a break-up bid. Pearson, also seen as a bid candidate, added 6p to 608p.

PROMOTED VIDEO
Voices
Ukip leader Nigel Farage arrives at the Rochester by-election count
voicesIs it any wonder that Thornberry, Miliband, and Cameron have no idea about ordinary everyday life?
Sport
sportComment: Win or lose Hamilton represents the best of Britain
Life and Style
tech
News
ebooksNow available in paperback
Sport
Arsene Wenger reacts during Arsenal's 2-1 defeat to Swansea
footballMan United and Arsenal meet on Saturday with both clubs this time languishing outside the top four
News
i100BBC political editor Nick Robinson had a lot of explaining to do
Life and Style
Nappies could have advice on them to encourage mothers and fathers to talk to their babies more often
newsTalking to babies can improve their language and vocabulary skills
Sport
Tony Bellew holds two inflatable plastic sheep at the weigh-in for his rematch with Nathan Cleverly
boxingGrudge match takes place on Saturday night
Arts and Entertainment
Mark Ronson at PS1
arts + ents
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

Reach Volunteering: Trustee – PR& Marketing, Social Care, Commercial skills

Voluntary Only - Expenses Reimbursed: Reach Volunteering: Age Concern Slough a...

Reach Volunteering: Charity Treasurer

Voluntary Only - Expenses Reimbursed: Reach Volunteering: Crossroads Care is s...

SThree: Trainee Recruitment Consultant - Soho

£20000 - £25000 per annum + OTE £35,000: SThree: We consistently strive to be ...

Ampersand Consulting LLP: Markit EDM (CADIS) Developer

£50000 - £90000 per annum + benefits: Ampersand Consulting LLP: Markit EDM (CA...

Day In a Page

US immigration: President Obama ready to press ahead with long-promised plan to overhaul 'broken system' - but will it get past a Republican-controlled Congress?

Immigration: Obama's final frontier

The President is ready to press ahead with the long-promised plan to overhaul America's 'broken system' - but will it get past a Republican-controlled Congress?
Bill Cosby rape allegations explained: Why are these allegations coming out now? Why didn’t these women come forward earlier? And why has nobody taken legal action?

Bill Cosby rape allegations explained

Why are these allegations coming out now? Why has nobody taken legal action? And what happens next for the man once thought of as 'America's Dad'
Four years of excruciating seizures caused by the 1cm tapeworm found burrowing through a man's brain

You know that headache you’ve got?

Four years of excruciating seizures caused by the 1cm tapeworm found burrowing through a man's brain
Travelling to work by scooter is faster than walking and less sweaty than cycling, so why aren’t we all doing it?

Scoot commute

Travelling to work by scooter is faster than walking and less sweaty than cycling, so why aren’t we all doing it?
Paul Robeson: The story of how an American icon was driven to death to be told in film

The Paul Robeson story

How an American icon was driven to death to be told in film
10 best satellite navigation systems

Never get lost again: 10 best satellite navigation systems

Keep your vehicle going in the right direction with a clever device
Paul Scholes column: England must learn to keep possession and dictate games before they are exposed by the likes of Germany and Brazil

Paul Scholes column

England must learn to keep possession and dictate games before they are exposed by the likes of Germany and Brazil
Michael Dawson: I’ll thank Spurs after we win says defender as he prepares to return with Hull

Michael Dawson: I’ll thank Spurs after we win

Hull defender faces his struggling former club on Sunday ready to show what they are missing. But he says he will always be grateful to Tottenham
Frank Warren column: Dr Wu has big plans for the professionals yet he should stick to the amateur game

Frank Warren column

Dr Wu has big plans for the professionals yet he should stick to the amateur game
Synagogue attack: Fear unites both sides of Jerusalem as minister warns restoring quiet could take 'months'

Terror unites Jerusalem after synagogue attack

Rising violence and increased police patrols have left residents of all faiths looking over their shoulders
Medecins sans Frontieres: The Ebola crisis has them in the headlines, but their work goes far beyond West Africa

'How do you carry on? You have to...'

The Ebola crisis has Medecins sans Frontieres in the headlines, but their work goes far beyond West Africa
Isis extends its deadly reach with suicide bombing in Kurdish capital

Isis extends its deadly reach with suicide bombing in Kurdish capital

Residents in what was Iraq’s safest city fear an increase in jihadist attacks, reports Patrick Cockburn
Underwater photography competition winners 2014 - in pictures

'Mysterious and inviting' shot of diver wins photography competition

Stunning image of cenote in Mexico takes top prize
Sir John Major: Negative West End portrayals of politicians put people off voting

Sir John Major hits out at theatres

Negative West End portrayals of politicians put people off voting
Kicking Barbie's butt: How the growth of 3D printing enabled me to make an army of custom-made figurines

Kicking Barbie's butt

How the growth of 3D printing enabled toy-designer to make an army of custom-made figurines