Speculators rush to buy as takeover fever spreads

The City's gossip tanks for the next takeover targets are steadily filling up. Takeover rumours were appended yesterday to several stocks, large and small, and spanning a diverse range of sectors.

The speculation usefully underpinned the market, and led to a busy day - particularly so for a Friday, with more than 780 million shares changing hands in 41,000 deals.

Confirmation that Carnival Corporation of the US may take a 30 per cent stake in Airtours, and a pounds 96m agreed bid for BI from National Industries reinforced beliefs that 1996 will be as active on the bid front as last year.

The unloved Unitech Group was enveloped in takeover speculation. Shares climbed 11.5p to 499p, as a rumour went round that Electrowatt may sell its 29.4 per cent, pounds 102.4m stake to Siemens which could spark a full-blown bid. One dealer said any bid for Unitech, which is due to confirm next week that its profits are soaring, would have to be pitched at more than pounds 400m - about 600p a share - to stand any chance of success.

Unitech's shares have underperformed the electronic equipment sector by 7 per cent in the past month, and by 5 per cent over the past three months despite, according to sources, making a mint out of selling power supply units to Japanese companies through its 51 per cent-owned Nemic- Lambada subsidiary.

Analysts expect Unitech's interim results next week to point to a rise in full-year taxable profits from pounds 36m to pounds 40m-plus, and upwards of pounds 50m for 1996/97.

The rumour appeared to have been started by separate speculation filtering out of Germany that Electrowatt was, itself, looking to do a large acquisition and needed to raise funds from selling investments.

Takeover rumours were again rife on the television pitch. Yorkshire Tyne- Tees Television sprinted 37p to 759p, and dealers were frantically, and often unsuccessfully, trying to buy large lines of shares in what is a very tightly held stock.

The passing of the Broadcasting Bill, currently going through Parliament, will result in an open season for takeovers in the sector. Several dealings rooms were awash with gossip yesterday that MAI, owner of the Meridien and Anglian television franchises, was testing the waters with some of Yorkshire's shareholders and was apparently prepared to offer around 900p a share.

Most of the other television shares marked time, although reasonable gains were recorded by Scottish Television, up 4p to a fresh high for the year of 487p, Border, ahead 13p to a year's peak of 261p, and Grampian, which closed 3p better at 226p.

The Standard Chartered share price continued to resemble a runaway train, advancing another 28p to an all-time high of 618p and taking the bank's market value to just short of pounds 6bn.

There are strong rumours that Standard is negotiating to sell its Asian securities business. The most tipped buyer is Nava finance of Thailand.

One trader yesterday suggested that Standard could even fall prey to a takeover bid. Much depends on whether Tan Sri Khoo Teck Puat is prepared to sell his 14.95 per cent share holding.

Other bank stocks, as well as the market's leading 100 shares had a quiet session in the wake of the euphoria that greeted the cut in base rates.

The FT-SE 100 index raced away in early dealings, sporting a 18.7-point advance right at the bell on the back of Wall Street's overnight surge.

A strong opening yesterday in the US, however, was largely ignored and the FT-SE 100 closed 0.3 of a point lower at 3,748.4.

Activity in second-liners, though, was considerably more intense and the FT-SE 250 index marched a further 15.4 points forward to 4,073.6 - tantalisingly close to its all-time high of 4,080.1 reached a fortnight ago.

The bullish tone outside the upper echelons owed much to the fresh outbreak of takeover speculation. Airtours, which never comments on market speculation, was forced into making an announcement as its shares went into overdrive in morning trading.

Airtours finished 33p higher at 433p, but had traded at 455p at one time during the session. Analysts believe the cash that looks set to roll in from a deal with Carnival will be used to fund acquisitions on the Continent, starting with the purchase of Spies in Denmark.

The out-of-favour First Choice tour operator was pulled along in the wake of Airtours and rose 4p to 76p.

Among the real takeover action, Granada eased 2p to 694p and Forte dipped 5.5p to 376p.