At one time the shares were down 12.5p to 471.5p. They closed at 475p.
The rumour, like so many that try to enliven a dull day, was wide of the mark. The blue-blooded broker is sticking with its forecasts, which are not widely out of line with other projections, of pounds 570m for this year and pounds 630m for next.
If anything the Allied ferment highlighted the vulnerability of the group's shares. They have underperformed the market for years and in the past 12 months have fallen from a 559p high.
Trading has been disappointing, with the market fretting about weak spirit sales, the Mexican problems following the devaluation of the peso and the lack of progress in the negotiations over its withdrawal from brewing.
It is believed Allied is a candidate to join the demerger bandwagon. There seems little to unite its extensive spirit operations with its ice cream to pub retailing side. Sir Christopher Hogg, new chairman, is famed for splitting Courtaulds into two stand-alone companies, chemicals and textiles. The market believes his salvation at Allied will be to follow a similar course, breaking the group into retailing and spirit businesses and selling the half share in the Carlsberg Tetley brewing side.
The rest of the market had a going-nowhere session - the FT-SE 100 index, after a few unconvincing spurts, ended 1.8 points down at 3,753.4. Tomorrow's US employment figures, which have achieved a reputation for wrong-footing the market, and fears of a big cash-raising exercise, kept the lid on trading.
Utilities were ruffled by fears of a windfall tax following the Independent's disclosure of under-spending by the electricity, gas and water companies. The Government's decision not to send the US bid for Midlands Electricity to the Monopolies and Mergers Commission lifted the target's shares 17p to 442p. PowerGen, the generator blocked from buying an electricity distributor, spent more of its surplus cash completing the 10 per cent buy-in of its own shares, mopping up 37.5 million through UBS at 483p. National Power managed a 9.5p gain to 523.5p as the last apparent hurdle was cleared for its 100p-a-share special dividend. The Scottish groups, under pressure from the regulator over prices, were dull, with ScottishPower, pondering its bid for Southern Water, off 9p at 309p.
Lucas Industries motored 8p to 254p as BBA decided to break its silence and say it was after all contemplating a bid that would put the brakes on the proposed merger with Varity of the US.
A counter-bid had been widely expected but there are clearly serious doubts whether BBA has the necessary muscle to force through a deal. Cazenove is said to be telling its clients another bidder lurks, with German groups such as Mannesmann (possibly in conjunction with TI Group) the most likely to barge into the cosy Lucas/Varity deal. BBA fell 21.5p to 295.5p, a two-day fall of 32.5p.
Blenheim, the exhibitions group, duly confirmed a takeover approach and the shares jumped 70p to 409p. Allders added 16p to 216p on the growing interest in its duty-free side.
Imperial Chemical Industries was unchanged at 851p as Salomon Brothers said buy and Morgan Crucible rose 15p to 447p with Credit Lyonnais Laing suggesting a re-rating with profits of pounds 98m this year and pounds 122m in 1998.
Barclays managed a further 7.5p gain to 781.5p following its analysts' briefings, with NatWest Securities raising its forecast from pounds 2.189bn to pounds 2.239bn. Burton, reflecting analysts' meetings, rose 3.5p to 157.5p. Tesco, up 8p at 313.5p, continued to draw strength from its move into financial services.
Tom Cobleigh, the managed pubs chain, jumped 20p to 250p. Its main venture capitalist backer, European Acquisition Capital, has found the strength of the shares irresistible and decided to sell its 50 per cent stake. The EAC declaration coincided with stories that the much smaller Surrey Free Inns, where Whitbread has apparently built a 4 per cent stake, intends to bid. Surrey fell 6p to 232p.
Capital Radio was little changed at 696p. After the market closed the French IP group said it intended to sell its 19 per cent shareholding.
Caird, the waste disposal group, gained 39p to 288p following a surprisingly strong trading statement which forecast a return to dividends.
Bluebird, the toys group, is creating interest. The shares gained 27p to 275p after 284p.
They have risen 46p in two days reversing a fall from 385p in the past year which saw a share buy-in at more than 300p. There is speculation of a takeover bid from the United States with with one of the leading transatlantic toy makers thought to be interested.
Home Counties Newspapers, unchanged at 145p, must be wondering whether its long-term relationship with Emap is about to end. The newspaper group has 24.5 per cent of Home Counties, a stake which must look decidedly vulnerable following its decision to sell its regional newspapers. Emap also has more than 20 per cent of Metal Bulletin, easier at 995p.