Market Report: Berisford cooks up action to brighten a dull trading day cooking up action on a drab dayRoman here heady heady liney decky decky

Francesco Guerrera
Friday 10 September 1999 23:02

BERISFORD, THE maker of Magnet kitchens, cooked up a nice corporate action story in a drab day for the market

The stock sizzled 33.5p higher to a record 327p as a deal between two US rivals focused investors' attention on Berisford.

Dealers' appetite was whetted by overnight news that the kitchen and bathroom maker Premark had been bought by the manufacturing conglomerate Illinois Tool Works for around $3.4bn ( pounds 2.1bn).

The US takeover sent the City's spread sheets blazing and the verdict was that if Berisford was to be bought at the same multiple as Premark, it would be worth over 600p per share.

The key question now was: will Berisford be taken over by an overseas giant such as ITW? The racier traders said a bid was possible, given the UK company's undervaluation compared to its international peers.

Berisford, which also makes ovens for large fast-food chains, rebuffed an offer from a mystery suitor a while back after months of bid speculation. However, since, the group's size has been boosted by the $712m (pounds 445m) purchase of US ice-maker Scotsman Industries for $712m.

The post-Scotsman Berisford would certainly be a bigger bite to swallow for potential acquirers, even though a powerhouse such as IWT - with annual sales of $5.6bn - would have more than enough firepower to gobble up the lot.

Additional rumours talked of a disposal of the Magnet kitchen business, which accounts for around 40 per cent of sales. US investors' interest ahead of an expected listing on Nasdaq also helped.

The rest look rather unappetising as interest rate worries on both sides of the pond continued to sour sentiment. The FTSE 100 lost 69.6 to 6191.0, even though benign economic numbers triggered a firm opening in the Dow. The blue-chip index's move below 6,200 was aided by a late afternoon sell- off sparked by what appeared to be a couple of large programme trades.

The FTSE 250 was dragged into the doldrums, and shed 25.4 to 6083.9. The Small Cap bucked the trend once again and closed 4.9 better at an all-time high of 2860.6.

Merchant bank and fund manager Schroders escaped the blue-chip malaise thanks to good interims and optimism about the future outlook. The illiquid stock soared 25p to 1380p, while the non-voting shares topped the FTSE 100 riser's list after a 49p jump to 1139p. The usual talk of a bid from a larger financial institution were also heard.

A good opening by US technology stocks boosted software group Misys, 15.5p better at 616.5p, while advertiser WPP group was absolutely fabulous, rising 14p to 627p on vague talk of a major contract win.

Food retailers were wanted for their defensive qualities and hopes of consolidation. Tesco, one of the mooted predators, bagged a 3.25p rise to 193.5p, while Sainsbury, a possible prey, firmed 2.25p to 433.25p.

Mobile operator Orange edged 0.5p higher to 1085p on vague talk of a strike on German rival E-Plus.

British Aerospace flew 2p higher to 464.25p after the UK government gave a conditional green light to the purchase of Marconi from GEC - 17.5p lower at 603.5p.

The bear stories came thick and fast. Utility Powergen, 33p lower to 625p, was left in the dark by investors' nerves over its planned mega- acquisition in the US. Insurer Royal & Sun Alliance plunged 19.5p to 502p after Warburg downgraded it and slashed its target to 530p from 630p. The heavyweight broker was not impressed by a meeting with the company on the prospects of the US business.

Building materials group Hanson crumbled 27p to 492.5p after a big sell order from a large institution and vague talk of downgrades. Bass, 30.5p lower to 818.5p was undone by fears of a beer price war announced by JD Wetherspoon, 16p better to a record 350.5p after strong interims.

Pub and hotels group Greenalls frothed 4.5p higher to 375p on whispers of imminent news on the sale of its houses to Scottish & Newcastle, down 8.5p to 601.5p or of its hotels to Whitbread, 20p lower to 800p.

Whisky maker Highland Distillers toasted the expected 425p bid from private investment vehicle Edrington with a 49.5p rise to 411p. For those keener on food than drink, Northern Foods gobbled up a 11.25p rise to 134.25p on revived rumours of a bid from a larger rival such as AB Food, down 12.75p to 417.25p.

The travel sector got badly burnt. Thomson crashed 23.25p to an all-time low of 103.25p after the second profit-warning in two weeks.

Airtours nosedived 27p to 417p after renewed whispers of a EU block for the bid for First Choice, 25.5p lower at 151.5p.

Housebuilders had another horrible day as bearish soundings from Merrill Lynch compounded the recent rate woes. Wilson Connolly fell 10p to 159p, Bryant crumbled 7p to 144p, while Persimmon fell 10p to 244p.

The minnow Independent Radio was in tune with the market and soared 23.5p to a yearly peak of 88.5p on news of a bid, possibly from one of the big boys. Osmetech, the old Aromascan where Colin Balcknourn has a 6 per cent stake, surged 3.25p to 20.75p, on whispers of talks with two large pharmaceutical companies over its unique aroma-based technology. Internet tiddler Geo Interactive Media jumped 21.5p to 144p on talk of a deal with Nokia. Durlacher, the broker with several Internet investments, soared 325p to 4250p on institutional buying. There is some vague talk of interest from an overseas bank.

Reflective ink maker Reflec sparkled 0.63p higher to 4.75p on rumours of an imminent deal, while software group Pegasus beamed 48p higher to 406p on confirmation of talks with a number of companies.




SOME SPECULATIVE buying is supporting the children's programme maker HIT Entertainment. The creator of such famous characters such as Kipper the Dog and Percy the Park Keeper is rumoured to have caught the eye of a rival. Traders are whispering that one of the big UK or US TV players could soon try to snap up HIT. The shares rose 10p to 912.5p yesterday, still off the all-time high of 975p reached earlier this year.

SEMARA, THE old Sketchley, could be in for some major changes. Some dealers believe that, after selling off its laundry business, the company is lining up another major disposal. The hot money is on a disposal of the textile division, possibly to a European rival. The sell-off could raise more than pounds 80m and would Semara - 4p higher to a yearly high of 70p yesterday, to reduce its debt.

Join our new commenting forum

Join thought-provoking conversations, follow other Independent readers and see their replies

View comments