Takeover speculation drives Lucas Industries on up; MARKET REPORT

Money is still riding on a takeover bid for Lucas Industries, the aeropsace and car components group.

The shares were once again subjected to heavy trading and in a volatile session swung from a 5p gain to a 13.5p loss. They closed just 1p lower at 233p.

The group is, without doubt, in trading pact talks with Varity, a US car parts group. The stock market hope is they will flush out a bidder for Lucas, perhaps GM of the US.

It was a bad day for Sid. The legendary private investor tempted into the Government's high powered privatisations had to contend with the sight of British Gas crashing 27p to 201p, lowest since 1990.

To pile on the agony, BT, down 4p at 333.5p, fell to a new 12 month low and British Steel, unsettled by recent trading comments, gave up 3p to 183.5p.

The gas price row between the company and its industry regulator, Ofgas, seems destined for the Monopolies and Mergers Commission. But even if Gas wins concessions, its dividend payments are likely to be cut.

The shares have been as high as 357p. They were sold at 135p nearly ten years ago.

BT saw a merger with Cable and Wireless as a way of off-setting the continuing pressure from its unfriendly regulator. The deal, however, was called off and the shares have come down from 360p, after topping 380p. Last year, before the regulatory demands became apparent, they were riding at 414p.

The group also suffered a pinprick reversal when Freepages won a battle to keep the 0800 192 192 telephone number for its information services.

The Gas blast wiped more than 7 points from the FT-SE 100 index and with the fall out engulfing other privatisation shares an early gain was transformed into a 15.2 fall to 3,739.2 by the close.

The setbacks could not have come at a worse time for the controversial Railtrack flotation, which had appeared to have won a surprising degree of support from private investors.

Bank of Scotland was the best performing blue chip, up 14p at 252.5p. It was spurred by confirmation the Standard Life insurance giant was contemplating the sale of its 32.2 per cent interest.

Any disposal would put BofS firmly into the takeover arena although political considerations could be a problem for any predator. Renewed talk Barclays could hive off its investment arm left the shares 1.5p down at 748.5p.

Meyer International, the timber group, put on 11p to 448p on reports of a bid from Wolseley.

Pearson, on suggestions it could hive off its television side, and the ever present possibility of bid action, gained 13p to 712p.

British Aerospace provided some comfort for the army of Sids, gaining 11p to 874p on its missile link with Matra of France.

Orange, up 4.5p to 249.5p, and United News & Media, 20p at 739p, were given a whirl on Footsie inclusion hopes.

Allied Domecq, the drinks group, managed a 2p gain to 502p ahead of what will be poor figures today. Grand Metropolitan, reporting on Thursday, rose 5p to 446p.

T&N fell 13p to 162p on the latest asbestos setback and in a weak building sector George Wimpey lost 5p to 142p.

Drug shares again attracted attention. British Biotech rose 22p to 2,955p ahead of its important presentation for its cancer treatment later this month and a launch of a vitamin tablet lifted Shire Pharmaceuticals 12p to 200p. Cortecs International, on encouraging clinical results on a vaccine against lung infection, rose 18p to 387p.

Orb Estates rose 5p to 72p as the struggling group confirmed it was in reverse takeover talks with the unquoted Quintain property firm. Another property minnow, Prior, said it was in discussions with "various parties" which may lead to a bid. One involved is Jermyn Estates. Prior rose 2p to 110p and Jermyn was unchanged at 650p.

Newcomer Premiere, a jobs agency, closed at 138p against a 133p placing.

Engineer Richards fell 8p to 25p following a warning of losses but Telspec, the computer group, rallied 43p to 533p after last week's profits warning.

Harry Ramsden's, the famed fish and chip enterprise, jumped 38p to 418p as takeover speculation returned. Rank Organisation and Whitbread remain the market's favourites to pounce.

Hay & Robertson gained 4p to 62p. It has recruited Scottish clubs Celtic and Rangers as well as two Italian clubs for its clothing lines. Hay has 11 premiership clubs as key players.