Hanson edges ahead as stories of a big sale circulate

MARKET REPORT

Hanson, the out-of-favour conglomerate which has elected to undertake a four-way demerger, caught the imagination of the stock market as stories swirled that a big sale could precede the split.

The shares edged ahead 1p to 191.5p in brisk trading. The market has, since the Hanson break-up was first envisaged, taken the view that one of its most alluring parts, the Imperial Tobacco interest, would be sold before the demerger could be completed.

BAT Industries, the financial and tobacco giant, is regarded as the most likely candidate to barge in with a bid.

But the feeling is growing that despite the obvious desirability of Imps, Hanson has an even more valuable jewel in its crown - its most recent acquisition, Eastern Group, the electricity company.

The Americans, according to popular belief, are queuing for the privilege of taking out our remaining independent electricity groups. In the past week Yorkshire Electricity has displayed acute anxieties about a US strike. Eastern, which cost Hanson pounds 2.5bn, could represent a much less complicated avenue for the Americans than shooting for a fully quoted company.

Hanson has had a torrid time since the four-way demerger was announced. The shares have been as low as 180p; their recent firmness suggests the initial reaction was too cautious, allowing no room for the Hanson spectacular which his Lordship, even in his 75th year, could well mastermind.

Henderson Crosthwaite, the securities house, added to the Hanson aura as suggestions circulated that it had alighted on a 225p break-up valuation.

The rest of the stock market showed signs of wanting to move into new territory. At one time the FT-SE 100 index was riding at its highest-ever level, 23.9 points up at 3,792.5. But it all proved too much and by the close Footsie was 8.5 higher at 3,777.1.

The supporting index, measuring the 250 shares immediately outside Footsie, was again in rampant form, perhaps indicating that the underlying economic strength was rather more encouraging than blue chips indicated. The 250 index was 27.3 higher at 4,272.2.

Hopes of interest rate cuts are providing much of the market's encouragement. Tomorrow's Ken and Eddie meeting is expected to sanction another reduction.

Trafalgar House was unchanged at 48.25p. There are signs that the Kvaerner bid could run into trouble in Norway. At least one Norwegian investor with around 1 per cent of the capital has expressed disquiet over the pounds 904m acquisition. The investor has pointed out that the bid was comfortably ahead of many recent estimates of Trafalgar's value.

Two shareholders have demanded a special meeting to discuss the offer but unless they can muster 10 per cent of the shares behind their call, a shareholders' meeting will not, under Norwegian law, be called.

Manchester United soared 13p to a 280p peak on its victory over Newcastle and increasingly speculation about television plans. The club said it had "no firm plans" to establish its own TV channel but added that if it did bypass the big broadcasters "the money potential is tremendous but there could be potential difficulties".

The bio babes had a lusty session, led by British Biotech, which jumped on more trials of its cancer drug. The shares gained 272p to 2,320p, still below the peak hit in the last upsurge created by the progress of its cancer treatment. Chiroscience added 9p to 266p on talk that the long- expected cash raising operation was under way.

Glaxo Wellcome, figures today, rose 4p to 920p. The market is looking for pounds 2,550m against pounds 1,899m.

Acorn Computer shaded 4p to 219p. Olivetti, the Italian group, has again cut its stake; it is now down to 45.9 per cent. Co-founder Hermann Hauser has also sold shares and his interest is now to 3.6 per cent.

Vodafone rose 5.5p to 246p, with ABN Amro Hoare Govett suggesting the sum of the parts was more than 300p.

Nynex, the cable group, gained 6p to 111p on continuing merger speculation; TeleWest, one name in the frame, gained 4p to 140p.. The raids at Tarmac and Amec left the shares lower. Tarmac fell 3p to 119p and Amec 4p to 95p.

Ticketing, the struggling leisure group soon to be called First Call, returned at 10.5p. Union Mutual Pension Fund has 29.9 per cent.

Crest Nicholson, the builder, held at 74p. Rowan Dartington, the stockbroker, estimated assets per share at 92p.

TAKING STOCK

rRoxspur, almost laid low by the disastrous takeover of fellow engineer Wills, is showing intriguing signs of life. The shares of the once high-flying group edged ahead 0.5p to 4p, highest since November. The battered and bruised business, run by Ian Orrock, was forced into a pounds 2.2m rescue rights issue at 3p a share. The price has since been down to 2p.

rMetal Bulletin, the publisher and conference organiser, jumped 70p to a 773p peak following a 30 per cent profit advance to pounds 4.2m. Year's dividend is 16p (12p). It is the eighth year running that profits have advanced and the market expects this year's out-turn to nudge pounds 5m. Emap has a 20.6 per cent, acquired at around 180p a share.