List of Gas `suitors' lengthens

MARKET REPORT The FT-SE 100 index edged forward 2.1 points to 3,190.2 and the FT-SE 250 index rose 8.5 to 3,468.3. Turnover was 820.3 million shares with 41,986 bargains. Government stocks were firm.

Professor Stephen Littlechild's dramatic intervention in the Trafalgar House bid for Northern Electric has failed to damage the stock market conviction that another huge privatisation takeover will soon materialise.

Although the electricity and water sectors are no longer in the front line, there is a growing suspicion that one of Whitehall's original privatisation utilities could find itself in the bid spotlight. Rumours have circulated this week that British Gas, probably the most unpopular of the utility groups, is likely to become a bid target.

Hanson, the bidder-for-all-seasons, has of course been mentioned. There is little doubt that the chairman, Lord Hanson, is looking for a spectacular assault to round off his remarkable career. A Hanson shot for BGas could represent the crowning glory he seeks.

But another name has entered the debate. With BGas's poor public image and the problems of its controversial chief executive, Cedric Brown, there is talk that a large oil group could be tempted to chance its corporate arm.

British Petroleum is the surprising candidate. With a stock market capitalisation of more than £24bn it has the fire power to capture BGas. Hanson, with a valuation close to BGas, could suffer from indigestion.

BGas shares rose 3p to 299.5p, a 13p gain this week. BP lost 3.5p to 433p and Hanson 1p to 236.5p.

Electricity and water shares, although they have lost much of their appeal, still have their faithful following. With US arbitrageurs Wyser-Pratte switching on the pressure at Northern and the French Lyonnaise des Eaux seemingly prepared to play a waiting game at Northumbrian Water there is a sneaking feeling the electricity and water sectors have much more upside than downside potential.

Northern rose 6p to 765p and Yorkshire arrested its decline, gaining 14p to 624p. Northumbrian rose 2p to 852p.

The rest of the stock market was happy to consolidate Tuesday's sharp gains. The FT-SE 100 index closed 2.1 points higher at 3,190.2 with trading, helped along by the last day of the current round of bed-and-breakfast deals, again busy.

ShareLink, the execution-only stockbroker, rose 19p to 232p as US investment house Charles Schwab duly produced its offer - 235p a share. Smith New Court, weak recently on profit fears, rallied 18p to 438p.

Standard Chartered lost a further 9p to 285p as what little takeover premium remained evaporated following the sale of the Lloyds Bank 4.6 per cent shareholding. Among merchant bankers Kleinwort Benson put on 15p to 659p and SG Warburg 12p to 725p.

Lloyds Chemists slipped 4p to 189p on talk of institutional calls for boardroom changes. The shares have had a torrid time, falling from 290p since the start of last month.

Asda, the supermarket chain, had a busy session with turnover printed at more than 18 million shares and the price gaining 1.75p to 76.25p. There has been talk that Allied Carpets, in which Asda has a stake of up to 50 per cent, will shortly be floated on the market. But industry sources suggest any share sale will not occur before the autumn at the earliest.

Fitzwilton, the Irish conglomerate, fell 5p to 48p. Dunne Stores, the Irish supermarket chain, has confirmed it has built a 9.1 per cent stake in the group.

Amstrad advanced 9.5p to 186.25p on talk of the benefits emerging from the reorganisation put in hand by chief executive David Rogers.

Airtours, the holidays group, had another firm session, up 9p to 441p. Speculation of German expansion has re-surfaced. There are also suggestions of a deal with a UK travel operator.

WPP, the advertising group, added another 3p to 110p in busy trading. Again, there was talk of US buying.

Bus companies continued to enjoy a ticket to ride following the Badgerline/GRT merger. Badgerline advanced 11p to 149p and GRT 11p to 280p. Go-Ahead, expected to be the next to feature in bid action, rose 4p to 195p. An investment presentation at merchant banker Rea Brothers also drew attention to the shares.

Albert Fisher, the food group, fell 2p to 39p, a 12-month low. Interim figures are due soon. The market has become increasingly uncertain abut the results despite a confident trading statement in February.

The group is moving away from its commodity fresh food operations into convenience foods. It has said interim figures will be hit by an exceptional £6.5m loss following the sale of its Belgian operation. For the year the market is looking for about £40m against £38.4m.

The weakness in the share price is likely to reawaken take- over speculation. Fisher is thought to have had talks with Hobson, the thrusting food group created by Andrew Regan. Hobson, firm at 27p, has itself been the subject of speculation with talk of a bid and Mr Regan and his team moving off to seek fresh pastures.

Nobo, an office equipment group, slumped 61p to 148p after it warned profits would fall "significantly" below market expectations of £3.7m.

Ross, the consumer group, produced the long-suspected "reverse" deal.

Marcus Evans, ex-Castle Mill International, is injecting £300,000 and becoming chief executive.The shares firmed to 4.25p. Pittencrieff, the oil and gas group which floated its communications side on the New York market, was busily traded although the shares stuck at 83p. An agency cross at 80.5p captured attention. There is talk that the group has significant expansion deals in the pipeline but some believe that there could be a management buy-out of all, or part, of the business. US shares traded on the USM have a poor record. But Pacer Systems may eventually turn out be an exception. Profits last month showed a sharp increase and there are hopes of bullish comments at the yearly meeting. The group's order book is impressive and cash equals 25p a share. At 64p the shares are, however, a long way from their 1985 placing price of 170p.