Market report: Fallen giant BICC rocked by massive share sell- off

ONE OF the stock market's fallen giants, the construction group BICC, was yesterday rocked by a large share sale. The former blue chip lost 0.5p to 116p as one of its largest shareholders, the acquisitive investment vehicle Wassall, down 2.5p to 262p, was said to have dumped its 9.3 per cent stake.

Eagle-eyed traders spotted a huge line of 39.16m going through the market just before the close at the cut-price of 112p and immediately speculated that Wassall had jumped ship.

Wassall bought the stake last year at prices ranging between 100p and 40p in order to launch a takeover of the troubled construction and cable group. However, in May BICC's board rejected two offers by Wassall - at 90p and 125p per share - and proceeded to streamline the company by selling its poorly-performing cable division.

Since then, Wassall has been looking for an exit and the recent rally in BICC shares to a 12-month high of 116.5p provided the perfect opportunity to sell.

The rumoured sale could have far-reaching implications for both companies. For BICC, it means the end of the Wassall siege and could pave the way for either another bidder or an independent future. The Wassall stake was said to have been bought by several institutions but the appearance of a rival predator is not impossible. For Wassall, the sale means that the proceeds can now be used to bid for other undervalued small companies.

Another of the market's strugglers Thomson Travel was also the subject of a share sale. The holiday group fell 1p to 84p after 41.21m shares, or 4 per cent of the company, were sold at a bargain-basement price of 70p. The hot tip was that fund manager Prudential was doing a tax-saving "bed-and-breakfast deal", which would see it buying back the shares today. However, speculation of an outright stake sale from the Pru, or, more damaging, from the Thomson family was also heard. The rest of the market shrugged off the BICC and Thomson shenanigans and embarked on a another round of buying.

The FTSE 100 inched closer to its 6,620 all-time high with a 49.4-point rise to 6,583.0. Hopes of several mega-deals before the end of the year continued to underpin sentiment. A positive start in the Dow, which soared 100 points just hours before the all-important US rates decision, reinforced the London bulls' case.

Financials and telecoms vied for the accolade of most wanted sector. Among the former, the insurer Prudential soared 51.5p to an all-time high of 1,122.5p amid a welter of rumours. One whisper suggested that the Pru's Internet bank Egg is booming as more savers go online. Another, more bizarre, story said that a US hedge fund was piling into the company on hopes that it would soon be able to access its orphan estate - a large pool of shareholders' funds. A third school of thought was that the Pru could mount a surprise bid for NatWest, 17p higher to 1,377p. The old rumour that the Pru could be targeted by a foreign rival was also heard.

Lloyds TSB, 27p higher to 897p, Woolwich, 10p better at 376.75p, and Barclays, 53p better at 1,996p, completed the financials' party. Telecoms were their usual excited selves. Cable & Wireless surged 55.5p to 831.5p on growing whispers of a bid, possibly from Hong Kong giant Hutchison Whampoa.

Vodafone Airtouch bucked the trend with a 20.75p plunge to 271.75p after saying it would bid for German rival Mannesman by Friday. Shrewd market players are selling Vodafone and buying Mannesmann's target Orange, 29p higher to 1,874p.

Utility Scottish & Southern Energy surged 13.5p to 537p on hopes that today's interims will bring good news or even a bid for a water or electricity company. Corus Group, the old British Steel, jumped 4.75p to 110.5p after a large institution bought a large line of stock.

Cement-maker Blue Circle dropped 6.5p to 313.5p despite on-going rumours of a bid, possibly from Hanson, 1p higher at 479.5p.

Drugs giant Glaxo rebounded from Monday's fall with a 26p rise to 1,850p ahead of today's 10-month trading update, while cruise group P&O steamed 6p ahead to 933p ahead of an analysts' visit to its Florida operations.

The second liners outperformed the leaders, with the FTSE 250 closing 29.1 higher at 6,006.9 and the Small Cap jumping 10.4 to 2,819.9.

Wonderstock Trafficmaster soared 162p to 912p after a deal with French technology company Webraska to put road maps on mobile phones and a pounds 66m placing at 700p.

Video-game chain Electronics Boutique rose 10.5p to 86p on bargain-hunting and vague bid talk, while catalogue retailer N Brown was 47.5p higher at a record 492.5p on whispers of imminent corporate action. TV group Flextech rose 95p to a best-ever 1,102.5p on renewed rumours that Granada, down 8p at 572p, could buy its stake in Scottish Media Group, up 2p to 887p.

Among the tiddlers, syringe group Medisys shot 12.75p higher to 56.25p. The investor Trevor Davis was rumoured to have accumulated a stake in anticipation of deals.

Asian cinema operator Pacific Media firmed 0.2p to 2.10p. There is talk that a mystery Internet company, where the former British & Commonwealth chief executive John Gunn is involved, could back into it.

Car parts group Silver Shield rose 0.5p to 2.5p on whispers of a bid for whole or part of the company, while car leasing group Goodwood was priced at 10p ahead of next week's IM float. Gucci bid talk helped Marchpole, the owner of the Yves Saint-Laurent franchise for the UK, 3.25p higher to 12p. Rumours of imminent good results for one of its drugs sent British Biotech 5p higher to 32p. AIM-listed TV producer West 175 beamed 22.5p higher to 322p on whispers of a US deal for some of its programmes.

SEAQ VOLUME: 2.15BN

SEAQ TRADES: 114,207

GILTS INDEX: 108.74 +0.62

f.guerrera@independent.co.uk

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