Unitech turns out to be the winner in takeover bets

MARKET REPORT

Shares of Unitech, the electronic components group, soared 173p to 688p as the stock market awaited the signalled takeover bid from Siebe.

The surge means that half of one of the market's favourite bets has turned out to be a winner. Unfortunately most speculators had ignored Unitech, opting for the other half of the two-way bet, Eurodisc Electron.

It all started when Elektrowatt, the Swiss group controlled by the Credit Suisse bank, acquired Landis & Gyr, an electronics group. To help meet the pounds 1bn outlay the Swiss decided to sell peripheral investments, including 29.4 per cent of Unitech and 42 per cent of Eurodisc, an electronic components company they helped put together last summer.

Much of the speculation swirled around Eurodisc, which seemed to be the more likely takeover target.

In the event, Unitech, which missed the speculative whirl, has become the bid target while Eurodisc still awaits a suitor. The activity was enough to lift Eurodisc 11p to 295p. It has been as high as 312p with the market talking of a bid in the region of 360p.

Unitech is likely to fall to Siebe, the engineer. Late on Friday it disclosed it had picked up 25 per cent and had options on the rest of the Swiss stake. Talks will now take place. Unitech, which controls Nemic Lambda, a Japanese power supply group, is thought to want any bid to include a cash alternative.

Some, such as Societe Generale Strauss Turnbull, expect any bid to be worth 750p; others hover around 650p. Siebe lost 18p to 826p.

The rest of the market moved ahead although trading was rather lacklustre. The FT-SE 100 index jumped 24.8 points to 3,669.6 with continuing takeover speculation and a firm New York opening the main influences. Dividend payments, representing 11.8 points, masked the strength of the advance.

Cable and Wireless, reflecting the potential BT interest, gained 9.5p to 485p. BT rose 4p to 351.5p. A Cable take-out price is the subject of intense debate. The group's overseas interests, including its controlling stake in Hongkong Telecom, cloud the issue. Lehman, the US securities house, puts the bid price between 570p and 670p.

Insurance shares were firm, largely on the back of Credit Lyonnaise Laing support. Banks continued to recover from last week's mauling prompted by the lending war.

GEC fell 5p to 359.5p as it denied reports of a pounds 5n deal with United Arab Emirates. It did confirm that Lucas Industries' chief executive, George Simpson, would succeed Lord Weinstock as managing director. Lucas, little changed at 192p, is now seen as vulnerable to a bid.

National Power and PowerGen, somewhat surprisingly, greeted a delay in the monopolies examination of their proposed moves into the regional electricity industry by moving ahead. NP rose 9.5p to 471p and PG 11.5p to 518p.

Allied Domecq, the retailing and spirits group, rebounded 10.5p to 491p after Friday's sell-off. Takeover hopes were said to be responsible for the recovery. United Biscuits, another group where a bid is seen as a possible solution to its problems, firmed 4p to 246p.

Zeneca, another takeover favourite, ended 8p lower at 1,375p after stripping out a near 25p dividend. Elsewhere on the drugs front, Stanford Rook gained 30p to 510p ahead of figures and SkyePharma was duly suspended at 9p to accommodate a major acquisition.

BAT Industries had a volatile session, despite a "clear the air" over its legal problems in the US. The shares ended 12p lower at 488p after hitting 482p. They were tormented by a sharp fall in the shares of Philip Morris, the US group unsettled by one of its executives giving evidence to the Food and Drug Administration.

NFC, the old National Freight Corporation, which has had a torrid time in recent years as a succession of profit warnings have devastated the shares, moved ahead 3p to 155p with NatWest Securities making positive noises. The shares, it said, could "be about to turn".

The day's profit warning was contributed by Rainford, an electrical equipment group, which slumped 92p to 282p.

A warning that write-downs could result in an $87m loss hit XCL, the oil exploration group, 3p to 16p. The shares were 102p in October.

Figures helped some shares higher. Pearson put on 7p to 664p; Doeflex, the chemical group, 20p to 238p and TT, a mini conglomerate, 18p to 311p.

Start your day with The Independent, sign up for daily news emails
ebooks
ebooksA special investigation by Andy McSmith
Latest stories from i100
Have you tried new the Independent Digital Edition apps?
Independent Dating
and  

By clicking 'Search' you
are agreeing to our
Terms of Use.

iJobs Job Widget
iJobs Money & Business

Recruitment Genius: Customer Relations Officer

£13000 per annum: Recruitment Genius: This is an exciting opportunity to join ...

Ashdown Group: Junior Application Support Analyst - Fluent German Speaker

£25000 - £30000 per annum + benefits: Ashdown Group: A global leader operating...

Jemma Gent: Project Coordinator

£12 - £15 Hourly Rate: Jemma Gent: In this role you will report to the Head of...

Recruitment Genius: Evening Administrator

£8 per hour: Recruitment Genius: This Pension Specialist was established early...

Day In a Page

Homeless Veterans campaign: Donations hit record-breaking £1m target after £300,000 gift from Lloyds Bank

Homeless Veterans campaign

Donations hit record-breaking £1m target after huge gift from Lloyds Bank
Flight MH370 a year on: Lost without a trace – but the search goes on

Lost without a trace

But, a year on, the search continues for Flight MH370
Germany's spymasters left red-faced after thieves break into brand new secret service HQ and steal taps

Germany's spy HQ springs a leak

Thieves break into new €1.5bn complex... to steal taps
International Women's Day 2015: Celebrating the whirlwind wit of Simone de Beauvoir

Whirlwind wit of Simone de Beauvoir

Simone de Beauvoir's seminal feminist polemic, 'The Second Sex', has been published in short-form for International Women's Day
Mark Zuckerberg’s hiring policy might suit him – but it wouldn’t work for me

Mark Zuckerberg’s hiring policy might suit him – but it wouldn’t work for me

Why would I want to employ someone I’d be happy to have as my boss, asks Simon Kelner
Confessions of a planespotter: With three Britons under arrest in the UAE, the perils have never been more apparent

Confessions of a planespotter

With three Britons under arrest in the UAE, the perils have never been more apparent. Sam Masters explains the appeal
Russia's gulag museum 'makes no mention' of Stalin's atrocities

Russia's gulag museum

Ministry of Culture-run site 'makes no mention' of Stalin's atrocities
The big fresh food con: Alarming truth behind the chocolate muffin that won't decay

The big fresh food con

Joanna Blythman reveals the alarming truth behind the chocolate muffin that won't decay
Virginia Ironside was my landlady: What is it like to live with an agony aunt on call 24/7?

Virginia Ironside was my landlady

Tim Willis reveals what it's like to live with an agony aunt on call 24/7
Paris Fashion Week 2015: The wit and wisdom of Manish Arora's exercise in high camp

Paris Fashion Week 2015

The wit and wisdom of Manish Arora's exercise in high camp
8 best workout DVDs

8 best workout DVDs

If your 'New Year new you' regime hasn’t lasted beyond February, why not try working out from home?
Paul Scholes column: I don't believe Jonny Evans was spitting at Papiss Cissé. It was a reflex. But what the Newcastle striker did next was horrible

Paul Scholes column

I don't believe Evans was spitting at Cissé. It was a reflex. But what the Newcastle striker did next was horrible
Miguel Layun interview: From the Azteca to Vicarage Road with a million followers

From the Azteca to Vicarage Road with a million followers

Miguel Layun is a star in Mexico where he was criticised for leaving to join Watford. But he says he sees the bigger picture
Frank Warren column: Amir Khan ready to meet winner of Floyd Mayweather v Manny Pacquiao

Khan ready to meet winner of Mayweather v Pacquiao

The Bolton fighter is unlikely to take on Kell Brook with two superstar opponents on the horizon, says Frank Warren
War with Isis: Iraq's government fights to win back Tikrit from militants - but then what?

Baghdad fights to win back Tikrit from Isis – but then what?

Patrick Cockburn reports from Kirkuk on a conflict which sectarianism has made intractable