Market Report: Cadbury's holds its price, despite its troubles

Some traders are convinced that something is going on at Cadbury Schweppes. Despite a "sell" recommendation from the broker Goldman Sachs on Wednesday and yesterday's confirmation of an investigation into alleged accounting malpractice at its 50 per cent-owned Nigerian operations, the shares still managed to close in positive territory.

The Nigerian operation is a tiny part of Cadbury's business, but the market never likes to get wind of accounting problems. EMI Group shares lost more than 15 per cent when it discovered accounting fraud at its Brazilian operations three weeks ago - the shares have still not recovered.

Cadbury's closed 5p firmer at 532p, valuing the group at more than £15bn, including debt. The word among traders is that Cadbury's is poised to face a take over, most likely from a private equity group, in what would be the largest ever UK buyout. Traders said a change of management might be the best way for it to move forward and that could mean an attempt to take it into private hands.

The insurance sector remained in focus following Legal & General's promise to return £1bn to investors and a round of corporate activity speculation. The Swiss investment bank UBS raised its target for the shares to 165p as it reiterated its "buy" advice, sending the shares 3.25p better to 149.75p. Meanwhile, Royal & SunAlliance firmed another 1.5p to close at 153p as bid talk continued to do the rounds.

Not surprisingly there were some sellers of British Energy ahead of today's results, sending the shares 16.5p worse to 468.5p. Anyone who took a punt on the shares a month ago, when they tanked after the company reported more cracks in its pipes at Hinkley Point and Hunterston, was sitting pretty on a gain of 20 per cent by yesterday's opening. It should report pre-tax earnings of £485m, better than last year, but if there is more bad news on the cracked pipes the shares could plummet.

In the wider market, solid blue-chip results and encouraging inflation data from the US buoyed London shares as fears of another round of rate rises eased. The FTSE 100 closed 25.1 better at 6,254.9.

Despite being among the favourites to return to the top-flight index at the December reshuffle, the fund management group Schroders has struggled. Citigroup, the broker that bought Schroders investment banking business six years ago, downgraded the shares to "hold" from "buy" and recommended that investors switch into Amvescap, although it left its target price unchanged at 1,080p. Schroders fell 9.5p to 996p while Amvescap firmed half a penny to 607p.

This year has been a quiet one for corporate activity in the car-hire world, after Hertz and Europcar were both sold in blockbuster private equity deals in 2005. But it looks like traders are backing a bid for Avis Europe after frenzied buying late in the session drove shares up 5.5p to 76p, the best performer in the FTSE 250. The shares had traded at 79.75p shortly before the close.

It has been five years since shares in Aggreko traded at 400p; the power supply group's stock collapsed to 100p in late 2001, but the turnaround looks to be complete. A bullish trading update yesterday surprised even the most upbeat analysts. ABN Amro, Citigroup and Evolution Securities published upbeat notes as the shares climbed 19p to close at 404p.

Shares in the London Stock Exchange had another bad day on the back of news that a consortium of investment banks is putting together a rival exchange. The shares fell through 1,200p for the first time since the beginning of September before a late afternoon rally saw the stock close 4p worse at 1,230p.

Investors will be expecting good first-half results from Cranswick on Monday. The food maker known for its premium sausages is thought to have had a strong summer thanks to the good weather in September and October, after reporting a record first quarter in July. The shares have been one of the steadiest performers over the last two years, and closed 4.5p firmer at 844.5p.

Bodisen Biotech, the Chinese organic fertiliser group, has been one of the most volatile stocks on the market since it made its debut at 950p in March. Wednesday's results have gone down badly with investors, and the shares closed another 90p worse to 225p, a new low.

Exhibition and conference organiser Tarsus Group rallied 14.25p to close at 229p after confirming the acquisition of Medical Conferences International, a US-based competitor, for $46m (£25m).