Market Report: Caradon rumours bolster builders

John Shepherd
Wednesday 21 April 1993 23:02

Further gains were recorded by equities yesterday despite overnight falls in Tokyo and on Wall Street. The FT-SE 100 index rose 13.5 points to 2,869.6 and the FT-SE 250 climbed 18.4 to 3,115.9. Trading volume was high at 737.7 million. The account ends on 7 May and settlement is on 17 May.

SPECULATION that MB Caradon would soon launch a big takeover bid for a company in the building materials sector increased yesterday.

Evered Bardon, the quarrying and aggregates company, is the main name in the bid frame. Nearly 2.5 million Evered shares changed hands yesterday, and the price climbed 6p to 44p.

Dealers believe that if economic recovery is really on the way then MB will have to strike now rather than later.

MB has a pounds 1bn war chest, made up of lines of credit running to pounds 600m and net cash of more than pounds 400m following the recent sale of its 25 per cent stake in CarnaudMetalbox.

Several other names are being mentioned as possible targets, and there is one theory that MB may be interested in doing a three-way deal involving Tarmac, up 1p to 141p, and Marley, ahead 6p to 132p.

Volume trading in MB, whose products include Everest double glazing and Twyford bathroom fittings, was high at 4.2 million. A string of delayed deals went through late in the day. Shares held at 297p.

The building materials sector generally had a firm session on the back of economic optimism. BPB Industries gained 4p to 225p, Heywood Williams rose 11p to 268p, Ibstock Johnsen climbed 5p to 61p, Pilkington hardened 3p to 130p, and RMC improved by 9p to 670p.

Trading in Taylor Woodrow, the construction group, was heavy. Some 6 million shares, which advanced 10p to 113p, were dealt as the tail-end of a program trade from Tuesday went through.

Overall, the market continued to advance despite further overnight falls in Tokyo and on Wall Street. The FT-SE 100 index was in positive territory throughout the session, closing 13.5 points up at 2,869.6.

Total trading volume was 737 million, although 10 per cent of that figure was accounted for by the placing of BTR's 17.2 per cent stake in Meggitt, up 0.5p at 101p.

Smith New Court handled the deal for BTR, which closed 2p up 619p. BTR is tipped as a possible bidder for Lucas Industries, up 2.5p to 134.5p.

Another driving force behind yesterday's gains was fresh interest in chemicals and pharmaceuticals. ICI, which published the pathfinder prospectus for Zeneca, increased 41p to pounds 12.26p.

Wellcome continued to recover with a 30p spurt to 764p, SmithKline Beecham added 24p to 468p, and Glaxo finished 19p better at 599p, having hit 602p at one time.

A year's high was achieved by Bowthorpe, up 8p at 317p. Analysts are currently visiting the company's US operations.

Huntleigh Technology's remarkable climb continued, with an 88p surge to a record high of pounds 11.58p after favourable reports on Tuesday's results announcement.

There was other significant action in the USM's ranks. Gresham Telecomputing, just 12p a year ago, surged 15p to 167p.

There is talk that the company will soon announce a raft of deals for its ISAM-XA software, which can link mainframe and personal computers. Rumoured names for the contracts are Dun & Bradstreet, NCR and Amdhal.

Harmony Leisure eased 0.25p to 7.25p as the 14.5 per cent stake held by the suspended Queens Moat Houses was sold to Southend Property, taking its holding to 18.6 per cent.

Both Queens and Southend supported Harmony's fight last year against dissident shareholders.

Hambro Insurance enjoyed a steady debut. The shares, floated at 138p, closed at 142p.

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