Hanson is as Hanson does - and fails to win over City; MARKET REPORT

Derek Pain
Tuesday 04 June 1996 23:02 BST
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Analysts may huff and puff but the stock market refuses to accord Hanson the deep respect many of them feel it deserves. When earlier this year Lord Hanson astonished the financial community by declaring his intention to split the sprawling conglomerate he had created into four stand-alone companies the shares touched 212p; well below the 235p hit a year ago and the near-300p of a year earlier.

Still, with some analysts suggesting a break-up value approaching 240p it appeared the old master had enhanced shareholder value by performing yet another corporate conjuring trick.

But since then Hanson has had a subdued time. Worries about the group's debt mountain, its dividend policy, the sheer magnitude of the four-way split and a tendency in some quarters to come out with rather less heady break up valuations have tempered enthusiasm. And even talk of bids for the constituents has failed to generate excitement.

Last week ABN Amro Hoare Govett, Hanson's stockbroker, suggested the demerger value was 213p. With confidence conspicous by its absence Hanson has remained friendless. Its shares fell a further 1p to 184p with talk of large lines of stock hovering. They look set to hit a new low.

The latest Hanson woe occurred as blue chips perked up, with the FT-SE 100 index up 16 points at 3,755.2. Supporting shares, as measured by the FT-SE 250 index, missed the fun.

Insurances caught attention as the market closed with stories circulating again that bid action was imminent. GRE, the old Guardian Royal Exchange, captured much of the excitement with a late move of 4p to 270p in moderately brisk trading. Since the proposed Royal Insurance/Sun Alliance merger was announced the market has speculated about further defensive unions and continued to wonder whether Continental groups still nurse a taste for UK counterparts.

General Accident was also pushed into the frame, up 10p to 673p, and there was a tendency elsewhere for earlier falls to be trimmed.

Special situations provided many of the moves. Cadbury Schweppes, weak recently, fizzed 17p to 498p on its soft drinks deal with Coca-Cola and Tesco continued to draw encouragement from its move into financial services.

United Biscuits managed a 3p gain to 221p (after 224.5p) on the lurking suspicion Cadbury, which nibbled at company a few years ago, may use some of its "Coke" cash to attempt a bid.

Eurotunnel added another 10p to 115.5p - a two-day gain of 21.5p - on stories that it is near to finalising its debt negotiations.

The company, although attempting to dampen hopes of an early deal, admitted a settlement with its banks by the end of this month was "not an unrealistic objective". Some believe shareholders will get a much less harsh deal than many had imagined. Japanese institutions, often operating through Paris, were rumoured to be determined buyers.

De La Rue's profits caution cost the shares 65p to 656p; Thames Water declined 11.5p to 579p on its ebbing profits and Inspec, a chemical group that came to market two years ago at 160p, fell 59p to 284p on a profit warning.

Emap's results and not unexpected pounds 221m sale of its newspaper division left the shares nursing a 27p fall at 675p. Midland Independent Newspapers fell 24p to 123p on a profit warning. It was floated at 140p two years ago.

Barclays jumped 16p to 774p in late trading as it became known it had undertaken a series of meetings with analysts. One described them as positive and it is thought profit forecasts will be raised. Royal Bank of Scotland continued to feel the heat of bid speculation, up 12p at 539p.

SmithKline Beecham, reflecting a new treatment for cold sores, put on 16.5p to 674p and International Biotechnology Trust, largely investing in US stocks, added 11p to 149p after declaring an asset value of 159.7p.

Moss Bros, the clothing retailer, surged 142p to 1,280p, a peak. It is thought to be near to mounting a takeover bid with Austin Reed the expected target.

Ibstock, the brick maker, firmed 1p to 69p and the nil-paid convertible, issued in relation to the proposed pounds 160m take over of Redland's brick division, put on 1.5p to 8p.

Firth, the metal group, rose 4p to 64p as it disclosed it was buying a fast-growing logistics management firm for the repair and overhaul of aircraft parts, Airinmar, for pounds 4.53m in shares. It is placing shares at 60p to fund the takeover and provide working capital.

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