Takeover action propels Footsie to high for the year

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The Independent Online
The pounds 1.7bn cash bid for the Fisons drugs group lifted the stock market out of its summer lethargy, sending the FT-SE 100 share index soaring 39.2 points to a year's high of 3,509.8.

Fisons has long been regarded as a prime takeover candidate. But, as is so often the case, the eventual bid came out of the blue.

Still, the market was happy to welcome the prospect of another big cash injection and with institutions thought to be over-endowed with cash there was talk of Footsie achieving substantial headway in the next few months.

This year has already lived up to the prediction that it would be the year of the mega-bid. But many more than expected have been cash offers, including much of the pounds 9bn Glaxo lavished on Wellcome.

Other bids have included the Swiss Bank Corporation for SG Warburg; Dresdner Bank for Kleinwort Benson; and three still in progress - Hanson for Eastern Group, Southern International for South Western Electricity and Scottish Power for Manweb.

Already the year's bid stampede has, or will, provide approaching pounds 20bn for the market.

Now the market can also feast on the 240p-a-share offer for Fisons from the French- controlled Rhone-Poulenc Rorer.

Fisons, revitalised by Stuart Wallis, chief executive, recently failed to acquire Medeva when the two sides could not agree terms. The pharmaceutical sector was also enlivened by reports Sweden's Pharmacia was planning a get-together with the US drugs giant, Upjohn.

Fisons shares, up 71.5p to 264.5p, clearly reflected hopes that RPR will have to increase its offer or a counter-bidder will be prompted into action. Zeneca, often linked with Fisons in the past, fell 8p to 1,099p on worries that it will be tempted to intervene.

It was also felt RPR's interest in Fisons removed a possible bidder for Zeneca.

Medeva, helped by Merrill Lynch support, gained 6.5p to 260p and Smith & Nephew, for long the subject of takeover flurries, rose 4.5p to 191.5p.

Besides the Fisons inspiration the market drew strength from Thursday's inflation figures and futures-related activity.

Unipalm, the computer group which is a provider of access to the Internet, was another surfing on takeover action. The shares jumped 63p to 390p as the group confirmed it had received an approach. The shares were 200p at the start of last month.

Christies International, the fine art auctioneer, rose 4p to 216p. Joseph Lewis has taken his stake to just over 16 per cent, buying another 5 million shares through his investment arm, Abel.

His intentions towards Christies are not known. But he is unlikely to be a passive shareholder. Mr Lewis, who used to run the London leisure business Hanover Grand, is based in the Bahamas.

Vodafone, at one time up to 281.5p, ended at 276p, a 3.5p gain. Reuters became a new recipient of US buying, up 20p at 577p. Banks were firm with Standard Chartered leading the sector with a 20.5p gain to 409.5p.

Drinks shares were again encouraged by the heatwave with hard-pressed Merrydown gaining 11p to 93p.

Asda was the worst-performing blue chip. Vague stories persist that Archie Norman, who has transformed the supermarket chain, is planning to return to Kingfisher, up 9.5p to 474.5p. Tesco rose 7.5p to 331.5p on talk that it was outperforming its arch-rival J Sainsbury, 5p higher at 469.5p.

Albert Fisher, the food group, was busily traded with the shares up 2p at 55p. Buyers were encouraged by the moderately confident tone of this week's analysts' meetings which underlined the share's yield appeal. James Capel moved from hold to buy and Smith New Court also put the shares on its buy list.

Costain, the struggling builder, held at 104p. Raymond International, one of two Middle Eastern groups attracted to the shares, has lifted its stake to 5.14 per cent. The group's other Middle Eastern fan, Mohamed Abdulmohsin Kharafi & Son, has 13.3 per cent.

Reliance, the security group traded on the USM, gained 9p to 173p. Chairman Brian Kingham has more than 70 per cent of the shares and there is speculation he will seek a full listing that could force him to reduce his shareholding. There is also talk of a bid.

Aminex put on 5p to 65p as it announced a Russian expansion that will lift its proven and probable oil and gas reserves by 219 per cent to 38 million barrels, equal to 114p a share.

Bula, another with Russian interests, placed 112 million shares at 2.25p with institutional investors, and Petroceltic, on its rumoured strike, gained a further 4p to 43p.


o The flow of recruits to AIM is gathering pace with the 4.2 market winding down next month. The first Channel Island company, La Riches Stores, a retail and wholesale food and drinks group with the Marks & Spencer franchise for Jersey, is on its way; so are two exploration companies in the stable of Irish entrepreneur John Teeling. Pan Andean, with interest in Bolivia, arrives on 29 September, followed a few weeks later by African Gold. La Riches' 4.2 price is 270p, African Gold 5.5p and Pan Andean 10p.

o Doeflex, a maker of specialist plastic materials, held at 200p. Stockbroker Neilson Cobbold believes the shares are good value. Following a pounds 4m plastic takeover the broker has lifted its profit forecast for this year from pounds 2.3m to pounds 2.8m and next from pounds 2.7m to pounds 3.7m.