SHARES AND MARKET REPORT: Investors keen to make a reservation at Hilton

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The Independent Online
HILTON WAS being tipped yesterday as likely to impress the City with its results later this month and when this combined with a particularly bullish note from Deutsche Bank few were surprised to see shares in the hotels group finish as one of the best performers in the FTSE 100.

Hilton closed 3 per cent, or 10.25p, higher at 318.25p, as rumours circled dealing rooms that the company's annual results on 24 February will make pleasant reading for investors. The market has got used to Ladbrokes, Hilton's bookmaking business, making up for a weak performance by its hotels operations but this year the reverse its likely to be the case. Occupancy levels are expected to have soared thanks to the general economic upturn, while Ladbrokes is forecast to have been hit by a series of sporting results going against bookmakers.

Meanwhile, Deutsche Bank upgraded Hilton to "buy" from "hold" before the figures and set a 350p price target. It predicts the company's hotels will continue to show earnings recovery for some years to come and also highlighted that Hilton has plenty of capacity to return cash to shareholders. "Our analysis indicates that substantial levels of cash could be returned to investors as hotels earnings recover or hotel asset values are realised," Deutsche said.

Elsewhere, Gallaher gained 9p to 837p as takeover speculation returned to the cigarette maker. At the start of the year dealing rooms were awash with rumours that Japan Tobacco wants to buy the owner of the Benson & Hedges brand.

The FTSE 100 made it to the 5,000 level but not beyond. It closed dead on that number, up 9.6 points on the day. The FTSE 250, however, retreated from its all-time high, falling 2.3 points to 7,345.2. Corus was 1.5p higher to 57.5p in response to a bullish appraisal of the state of the steel industry by Mittal Steel. The company, controlled by the Indian tycoon Lakshmi Mittal and likely to become the world's biggest steel maker, not only boasted of a quadrupling in net income during 2004 but was very upbeat about 2005.

Electrocomponents gave up 3.75p to 312p after Dresdner Kleinwort Wasserstein warned investors that despite the company's strong share price performance, trading remains tough across all its major markets. Its rival Premier Farnell lost 3.5p to 180.5p. Cranswick was unmoved at 578.5p despite the sale of 100,000 shares at 580p by Noel Taylor, a non-executive director. Sportingbet gained a further 10.75p to 283.25p as Investec Securities tipped the online gaming group's amazing renaissance to continue for some time yet.

Ultraframe, which has had a string of profit warnings over the past 12 months, soared 12.5p to 71.25p on rumours that a takeover offer for the conservatories maker is imminent. Gossips reckon the bidder, probably a private equity player, is willing to pay 85p a share for the company. However, in response to the excitement, the group rushed out a statement to the stock exchange saying it did not know of any reason for the share price jump.

Dealers also noted that Capital Group, the giant US fund manager, has been adding to its stake in the company. Yesterday Capital announced its holding had risen from 6.3 per cent to 7.3 per cent.

QuikTrak Networks said at the end of last month that it was planning to abandon its activities in the technology sector and become a mining company. Its stock ticked 0.25p higher to 2.62p on talk some major mining industry players are about to get involved with the company. QuikTrak intends to change its name to Tarquin Resources and recently raised pounds 620,000 via a placing at 1.5p.

API added 2.5p to a fresh high of 133.5p as brokers suggested that the packaging group's restructuring is running ahead of schedule. They also suggested that another disposal of non-core assets is just around the corner at API. Hereward Ventures ticked 0.25p higher to 6.25p after unveiling yet another acquisition in the oil exploration arena.

Finally, investors should not be surprised to see some form of corporate action take place at New Media Spark, unchanged at 10.62p, some time in the near future. The hedge fund RAB Capital disclosed a 3.1 per cent stake in the former internet incubator and now stands alongside the activist investment group Guinness Peat on New Media's shareholder register.

It has long been argued that the group's various investments across the technology sector are worth well in excess of New Media's current stock market value. However, the group has so far been unable to turn these holdings into cash. With the likes of RAB Capital and Guinness Peat now featuring in a big way as shareholders it will undoubtedly concentrate the company's mind on realising some of this value.

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