Upheaval among financials fuels takeover speculation

MARKET REPORT DEREK PAIN

The stock market is on takeover tenterhooks. The flurry of heavyweight activity on the financial front is provoking intense speculation about the future of leading groups in such areas as banking and insurance.

Many of the top names were dragged into the cauldron yesterday with such blue chips as Commercial Union and General Accident leading the charge.

Prudential Corporation, which has topped Abbey National's offer for Scottish Amicable, rose 10p to 564p while Abbey slipped 17p to 765p. Lehman Brothers, put out a buy recommendation on the Pru, describing its ScotAm bid as "a knock-out offer".

It was, however, a mobile phone group which enjoyed the most spectacular run. Vodafone jumped 20p to 298.5p, a peak, as punters piled in as stories swept the market that a German bid was on its way. A price - 350p a share - was even in the frame.

Not for the first time someone, somewhere got their wires crossed. Whether it was a genuine misdialling or an old fashioned ramp is uncertain.

The story originated in the futures market with heavy trading spilling over to the cash market.

Vodafone denied the bid stories. "I can categorically confirm we have had no takeover approaches", said a spokesman. The shares ended 7p up at 285.5p.

The struggle for ScotAm is only one of the influences creating excitement in the financial sector. The big Morgan Stanley/Dean Witter deal in the US has helped highlight just how fiercely the winds of change are whistling through the once cosy and staid corridors of the financial industry.

The rush to demutalise and the competition in the banking sector, with superstores prepared to challenge the high street clearers, have also drawn attention to the financial upheaval; so has the well signalled continental hunt for a fund management group with Dutch and German predators on the prowl.

CU rose 23p to 718p and GenAcc 24p to 821p. Insurers have in recent years been seen as fodder for continental invaders but after the Royal Insurance/Sun Alliance defensive get together there are suspicions CU and GenAcc could too feel the urge to merge.

BAT Industries, GRE and Legal & General were caught up in the speculation; so was Mercury Asset Management.

The top performing blue chip, however, was not under the takeover whip. Lasmo, the oil group, gushed 11p to 262.5p following a US presentation by Anadarko, one of its partners in an Algerian oil venture. Merrill Lynch added to the fun by joining others on a 300p target for the shares.

British Petroleum was ruffled by rumours it will be dragged into Labour's "windfall" tax; the shares fell 6.5p to 741.5p.

Bass was hit by a sobering profits warning, down 31.5p at 821p. Imperial Chemical Industries' dull profits left the shares off 22p at 742.5p and BT's figures lowered the shares 5.5p to 438.5p.

Overall, the market experienced another lacklustre session with Footsie closing 15.6 points down at 4,265.9. The supporting FTSE 250 index also gave ground.

Sotherby's, the auctioneer, felt the impact of an alleged art smuggling scam, falling 47.5p to 985p. Williams Holdings, the industrial group, added 1p to 327p as ABN Amro Hoare Govett made positive noises. It sees scope for a 20 per cent outperformance as cash realised from disposals is reinvested. RTZ, the miner, enjoyed rumoured support from UBS, gaining 18.5p to 901p.

Chelsea Village was at it again, placing shares. Two more players have taken shares in a placing. In a series of placings the club has now tapped the market for pounds 6.4m. The shares held at 166.5p.

Westmount, with oil interests around the Falkland Islands, jumped 12p to 84.5p and British Borneo Petroleum Syndicate was back to winning ways with a 29.5p gain to 1,333.5p.

PhoneLink, on-line business information services, rose 9.5p to 57p after launching Electronic Market, a joint venture with the Scottish Widows financial group. The venture offers a package using e-mail and deskmail technology. Wedderburn, a property group, gained 4.75p to 18p after disclosing it was in talks which could lead to "substantial" deal.

Paramount, the struggling pubs chain, held at 42.5p. Nomura, the Japanese investment house which is involved in two unquoted pub companies, has acquired 29.05 per cent of the convertibles rights issue which achieved only a modest take-up from shareholders. It already has 9.7 per cent of the ordinary shares.

Taking Stock

rPGA European Tours, a golfing group, edged ahead to 6.5p in busy trading. It recently failed to buy Clubpartners International but did take on one of its courses. Now there is talk PGA has another deal up its sleeve.

rMountcashel, an investment business born out of the old Explaura quarrier, jumped 12p to 112p. It is run by Oliver Vaughan, the former disco entrepreneur. The company concentrates on investing in small businesses and one which has attracted its attention is Shield Diagnostic which enjoyed a spectacular run this week.

rXavier Computer, holding at 11p, is heading for profits of pounds 600,000 this year and pounds 1.1m next, say stockbroker Wise Speke. It believes the shares are attractively rated for an "emerging growth company".

Start your day with The Independent, sign up for daily news emails
ebooks
ebooksA special investigation by Andy McSmith
  • Get to the point
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

SThree: Graduate Recruitment Resourcer

£20000 per annum + commission: SThree: Sthree have an exciting opportunity for...

Recruitment Genius: Telesales Executive - OTE £32,000+

£18000 - £32000 per annum: Recruitment Genius: A Telesales Executive is requir...

Ashdown Group: Marketing Manager - B2B, Corporate - City, London

£45000 - £50000 per annum + benefits : Ashdown Group: A highly successful, glo...

Neil Pavier: Commercial Analyst

£50,000 - £55,000: Neil Pavier: Are you a professionally qualified commercial ...

Day In a Page

General Election 2015: The masterminds behind the scenes

The masterminds behind the election

How do you get your party leader to embrace a message and then stick to it? By employing these people
Machine Gun America: The amusement park where teenagers go to shoot a huge range of automatic weapons

Machine Gun America

The amusement park where teenagers go to shoot a huge range of automatic weapons
The ethics of pet food: Why are we are so selective in how we show animals our love?

The ethics of pet food

Why are we are so selective in how we show animals our love?
How Tansy Davies turned 9/11 into her opera 'Between Worlds'

How a composer turned 9/11 into her opera 'Between Worlds'

Tansy Davies makes her operatic debut with a work about the attack on the Twin Towers. Despite the topic, she says it is a life-affirming piece
11 best bedside tables

11 best bedside tables

It could be the first thing you see in the morning, so make it work for you. We find night stands, tables and cabinets to wake up to
Italy vs England player ratings: Did Andros Townsend's goal see him beat Harry Kane and Wayne Rooney to top marks?

Italy vs England player ratings

Did Townsend's goal see him beat Kane and Rooney to top marks?
Danny Higginbotham: An underdog's tale of making the most of it

An underdog's tale of making the most of it

Danny Higginbotham on being let go by Manchester United, annoying Gordon Strachan, utilising his talents to the full at Stoke and plunging into the world of analysis
Audley Harrison's abusers forget the debt he's due, but Errol Christie will always remember what he owes the police

Steve Bunce: Inside Boxing

Audley Harrison's abusers forget the debt he's due, but Errol Christie will always remember what he owes the police
No postcode? No vote

Floating voters

How living on a houseboat meant I didn't officially 'exist'
Louis Theroux's affable Englishman routine begins to wear thin

By Reason of Insanity

Louis Theroux's affable Englishman routine begins to wear thin
Power dressing is back – but no shoulderpads!

Power dressing is back

But banish all thoughts of Eighties shoulderpads
Spanish stone-age cave paintings 'under threat' after being re-opened to the public

Spanish stone-age cave paintings in Altamira 'under threat'

Caves were re-opened to the public
'I was the bookies’ favourite to be first to leave the Cabinet'

Vince Cable interview

'I was the bookies’ favourite to be first to leave the Cabinet'
Election 2015: How many of the Government's coalition agreement promises have been kept?

Promises, promises

But how many coalition agreement pledges have been kept?
The Gaza fisherman who built his own reef - and was shot dead there by an Israeli gunboat

The death of a Gaza fisherman

He built his own reef, and was fatally shot there by an Israeli gunboat