McAlpine in bid talks with Raine

Alfred McAlpine is in talks that may lead to an all-share offer for Raine, a rival building and construction group. The bid would be at a modest premium to Raine's share price of 19.5p, which values the group at almost pounds 36m.

Analysts were reluctant to guess what the size of the "premium" that McAlpine would be prepared to pay, and one even suggested that news of the talks could flush out other bidders.

Howard Proctor, analyst at Societe Generale Strauss Turnbull, said that he had recommended a "cautious" stance on McAlpine, until the terms of the possible bid were announced. "Superficially, Raine appears to be a good fit, but we are suggesting waiting until it becomes clearer what McAlpine are prepared to pay." McAlpine's shares firmed 4p to 167.5p yesterday

Leslie Kent, analyst at MeesPierson, said the premium McAlpine was prepared to pay was the "54,000 dollar question". However, he noted that Raine reported net assets of 32p a share at the end of last year.

Raine has a land bank of 300,000 plots with planning permission and "McAlpine have realised that what Raine needs is a big parent," Mr Kent said.

"This is by no means cut and dry, and Raine could be made more offers once McAlpine have made theirs. It takes a bid to draw attention to a recovering company like Raine," Mr Kent added.