Yorkshire Electric rekindles interest

MARKET REPORT
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The Independent Online
The FT-SE 100 index fell 16 points to 3,009.3 and the FT-SE 250 index 0.2 to 3,384.1. Turnover

was 645.5 million shares with 21,260 bargains recorded. Government stocks were firm

The stock market, like a dog with a bone, is reluctant to sacrifice an enticing taste. And in the aftermath of the Baring's affair there is nothing so irresistible as a realistic takeover bid - such as the long- suspected strike for Yorkshire Electric.

On Monday, Yorkshire shares shrugged off the Baring's debacle better than most. Yesterday, in a lacklustre market, they flickered like a fluorescent tube trying to attract attention.

The price touched 851p, closing 17p higher at 848p. Volume was not high but observers who should know appeared to be impressed by the quality of the buying.

Since electricities became the Aunt Sallys of the market, Yorkshire has been in the firing line. Its size, earnings and geographical spread make it an ideal candidate for a cash-hungry predator.

The latest story is, in effect, an old one that has become lost in the electrical buzz. One of the two Scottish power groups, which are said to be keen on an English strike, was being mentioned as the likely attacker. Such a deal would make sense; it may have been significant that the Scottish duo was among the electricities to give ground. Scottish Hydro-Electric slipped 2p to 317p and Scottish Power 5p to 328p. Others are in the frame. Hanson, the bidder-for-all- seasons, is, of course, in the forefront. So are the likes of BTR and Tomkins. And there is talk of a surprise overseas package - possibly from France.

The Trafalgar House offer for Northern Electric has yet to clear the mass of regulatory hurdles that have emerged since the bid. But the market view is the bid will ultimately be cleared. There is a suspicion that Hanson, after letting Trafalgar perform the ground work, will pounce on Northern once the deal is finally cleared, leaving the hard-pressed Trafalgar group scratching around for another target.

Northern was little changed at 1,056p; Hanson dipped 1.75p to 233.5p and Trafalgar held at 63p.

The feeling Hanson has Yorkshire in its sights was strengthened by the performance of other alleged Hanson targets. Argyll, the Safeway supermarket chain, slipped 0.5p to 269.5p; United Biscuits crumbled 6p to 334p and TSB, the banking group, 2.5p to 232.5p.

The rest of the market had an indifferent session although trading was not quite so depressed as on Monday. The FT-SE 100 index fell 16 points to 3,009.3 with poor inflation indicators from the US and continuing uncertainty over today's crucial Westminster Euro vote providing much of the anxiety. But the Barings debacle, although in the background, remained a worrying influence.

Inchcape, the international trader, put on 10p to 305p, presumably on the back of the overnight strength of Far Eastern markets. Amstrad, the electronics group, was another in form, up 4.5p to 167p, with the recent re-rating apparently continuing.

Kingfisher, the trouble retailer, improved 7p to 433p with Henderson Crosthwaite, the stockbroker, adopting a bullish stance. Analyst Roy Maconochie holds out little enthusiasm for the figures to the end of January. Even before write-offs of £80m he expects no more than £280m. But for the current year he is looking for £310m, and £375m next year.

Lowe & Bonar, the packaging group, gained 10p to 430p ahead of an investment presentation at SG Warburg and Tate & Lyle, the sugar group, in the process of City presentations, dipped 2p to 435p.

Southern Business, the photo-copier distributor, rose 5p to 69p as Berkeley Business Group emerged as the mystery predator. But the bid's perceived value, an expected 83.5p a share, was soon eroded as Berkeley shares fell 2.5p to 6.5p.

With the pressure easing on the Genco's share sale the prices of the two generators gave ground. National Power lost 6p to 464p and PowerGen 10.5p to 497p.

BPB Industries fell 19p to 294p on its £700m bid for America's second- largest plaster board group. Cadbury Schweppes dipped 5p to 424p as its rights issue to help finance the £1.1bn bid for full control of the US soft drink group, Dr Pepper/Seven-up, achieved a 92 per cent take up.

On the tender financial pitch Kleinwort Benson remained subdued, falling another 10p to 568p; SG Warburg staged a modest 6p recovery to 689p. Johnson Fry, the fund manager known for its Business Expansion Schemes, had a difficult session. At one time down 23p the shares ended 5p lower l at 113p. The shares touched 428p last year.

Goldsmiths, the jewellery chain,was steady at 126p. Hoare Govett is confident the group will make further progress, suggesting that following strong Christmas sales profits in the year ended January will nearly double to £3m. For the current year Hoare is looking for £4.1m.

Reginia, famed for its royal jelly, held at 1.5p as it cut losses to £24,000 from £224,000. The Da Gama Rose Group, an East African conglomerate, has pledged to support the group although details of its involvement have yet to be released. In the meantime Horatious Da Gama Rose is joining the board.

Jarvis Porter, the packaging group, held at 290p. Stockbroker BWD Rensburg believe the shares are fairly valued but look to buy on any weakness. Profits in the year just ended are expected to jump from £6.8m to £10.6m with £14.3m pencilled in for the current year.

Countryside Properties held at 98p. Underlining the increasing firmness of the commercial property market, it has let two office properties at its £16.2m Admiralty Place development at Chatham Maritime, Kent.

Games Workshop, the computer games group, remained at a 168p peak as Smith New Court estimated profits would reach £6m this year and £7.4m next. The company produces table-top fantasy games. y7Mike Allwright5>

Butte Mining, a litigation play, is looking increasingly dejected. The shares fell a further 0.75p to 1.75p. Earlier this year they were above 4p. Latest setback is that the 77 defendants Butte is suing for £600m have been granted injunctions restraining the miner from taking further action in the US.

Zotefoams showed there is still plenty of life in the new issue market. Against a 145p placing price,the shares touched 173p, closing at 170p. The group makes polyethylene foam, much of it for use in sports and healthcare packaging. It will use its £14.2m flotation cash to expand output by a third.

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