Wellcome shares recovered an early fall to reach 1,020p, up 9p on the day and only coppers below the value of the Glaxo offer.
SmithKline was busily traded. The price rose 7p to 490p with the success of its research into its Carvedilol heart drug helping sentiment.
Hoffman would no doubt like to accommodate Wellcome. But its balance sheet is stretched following its last acquisition. The company described the speculation as "just a rumour''.
Glaxo, which has not disguised its need for Wellcome as its lucrative Zantac ulcer drug reaches maturity, improved a further 5p to 654p.
The rest of the stock market recovered from an indifferent start, with the FT-SE 100 index dragged higher by a firm New York which is seemingly inexorably moving towards its all-time high.
The widening spread between Footsie and the Dow Jones Average is puzzling many dealers. They are unable to reconcile New York's strength with London's weakness.
Political worries are unsettling sterling, which could strengthen the move towards higher interest rates. The coming results season, with half the index's 100 constituents due to report, also persuaded many investors that a cautious approach should be adopted.
At one time down 12 points, the index closed just 0.2 lower at 3,072.5 in uneven trading.
Ladbroke, the betting and hotel group, attracted attention as the shares rose 5.5p to 174.5p. Recent comments from the Vaux Group about the recovery at its Swallow Hotels chain helped; so did continuing appreciation of its tough decision to sell its do-it-yourself venture to J Sainsbury.
Further streamlining exercises are expected but there is also a sneaking suspicion the group is flexing its muscles for a major acquisition, with Hilton Hotels of the US still the favourite target. Ladbroke already has the international Hilton spread. Adding all or at least part of the US operation would be a logical, if ambitious, extension of its interests.
Electricities edged ahead. Northern, still awaiting the Whitehall decision, was up 19p at 978p. Yorkshire, up 16p at 810p, and Seeboard, 17p higher at 431p, are the favourites to attract attention should the Trafalgar House strike for Northern get the go-ahead.
Budgens, the struggling supermarket chain, closed 3.5p higher at 31p in busy trading. Speculation that Rewe would place its stake, paving the way for a bid, continued. The company said it knew of no reason for the strength of its shares.
The big brewers remained weak following Tuesday's plunge on the surprise Office of Fair Trading investigation.
Whitbread lost 5p to 531p and Bass 2p to 518p. But the realisation the regionals could come under increasing pressure took Greene King down 23p to 485p, a two-day fall of 35p, and Marston Thompson & Evershed 12p lower at 284p, an 18p fall over two days. Vaux lost 9p to 216p, Wolverhampton & Dudley 15p to 487p and pub chains Greenalls, 15p to 414p and JD Wetherspoon 11p to 461p.
SG Warburg, reflecting the departure of two top executives, slipped 12p to 736p; a stock shortage pushed Schroders up 40p to 1,523p.
Lloyds Bank added 6p to 551p. Profits are due tomorrow and there is speculation it will accompany the figures with a disclosure it has sold its long-standing 4.5 per cent interest in Standard Chartered. It was said the resultant £115m would help it to absorb Cheltenham & Gloucester Building Society.
There is also continuing speculation Lloyds will strike for the outstanding shares in Lloyds Abbey Life, the insurance group.
BT ran into selling ahead of today's third-quarter figures; about £650m, against £698m, is expected. The shares fell 8.5p to 396p. A clash with the industry regulator, with BT clearly astonished by new directives, took its toll.
Albert Fisher, the food group, which has been in unsuccessful merger talks with Hobsons, recovered 2p to 44p. Hobsons is the smaller company and is unlikely to attempt a hostile bid for Fisher.
Waste Management International fell another 22p to 323p. The shares have lost 84p since lower than expected profits.
Engineer FKI edged ahead 1p to 143p as investment presentations took place in Germany. Powell Duffryn shed another 1p to 463p, a two-day 20p fall, on profit downgrading as some analysts fretted about the impact of the mild winter on its fuel distributionbusiness.
Northern Industrial Improvement, an obscure investment company, took a swing at officialdom as it opted to become a unit trust. It said the costs of frequent changes in regulations and Stock Exchange requirements meant disproportionate overheads The decision to unitise is good for shareholders - the shares surged 115p to 630p.
Moorepay, standing at 70p on the backwater 4.2 market, should produce profits of £650,000 last year and £750,000 this year, says stockbroker Teather & Greenwood, which regards the shares as a buy. The group is one of the country's leading suppliers of packaged payroll services. New and old shares were recently placed at 60p.