Market Report: Holiday rivals' shares take off in bid battle

THE FIERCE sunshine holidays takeover battle moved into the stock market for the first time yesterday. Barclays de Zoete Wedd, acting for the hostile bidder Airtours, picked up more than 4 per cent of its target, Owners Abroad, at around 140p.

The BZW buying spree coincided with rumours that Owners' main institutional shareholders were edging in favour of the bid.

About 35 per cent of Owners' capital is spread between five institutions, with Mercury Asset Management accounting for 14 per cent. MAM is one thought to be prepared to put its weight behind the offer.

The Airtours share exchange offer values Owners at almost 147p a share.

Investment houses have been recommending their clients to take positions in Airtours or Owners because of the combined group's potentially powerful position in the package tours market.

Should the takeover go through, the combined group would be valued at more than pounds 600m, with profits of about pounds 100m expected in 1994.

The Airtours campaign has had to contend with a proposed Owners link with the German- owned holiday operation, Thomas Cook. In a late bid to defeat the offer Thomas Cook, together with the German LTU group, offered to tender for 12.5 per cent of Owners at 150p a share. The tender would occur if the Airtours offer was rejected.

The Thomas Cook intervention looked doomed from the outset. Its prospects could not have been enhanced by Wednesday's announcement that Owners, the bigger of the two groups, would become an FT-SE 250 constituent later this month.

An Airtours takeover would consolidate the enlarged group's 250 status and increase the group's institutional appeal.

Airtours shares rose 4p to 333p and Owners 1.5p to 141p.

The BZW sharebuying was little more than a ripple in another busy day with, despite a strong flow of blue-chip profit figures, much of the action taking place in the second-line and fringe shares. Seaq put volume at 822.3 million shares.

The FT-SE 100 index gained 3.3 points to 2,953.4. But the FT- SE 250 index, measuring the 250 shares immediately outside the FT-SE 100, climbed four points to a new high of 3,121.8.

Glaxo Holdings caused the FT-SE 100 damage. The sudden departure of the chief executive and deputy chairman, Dr Ernest Mario, sent the shares tumbling 30p. They closed 19p lower at 668p.

But other drug shares enjoyed Glaxo's discomfort. SmithKline Beecham put on 17p to 491p and Wellcome 28p to 935p.

Hanson, the brickmaking-to- tobacco conglomerate, was actively traded, with the price easing 6p to 248.5p. The group, which has surprised many with its apparent reluctance to produce a significant takeover bid, has had a difficult week with BZW making, at best, cautious noises and SG Warburg coming out with a sell recommendation.

Bass, the brewing and hotel group, continued to feel the pinch of profit downgradings but Grand Metropolitan, meeting analysts, rose 8p to 479p.

Thorn EMI was weak, down 22p at 861p on rumours of a Cazenove profit downgrading.

National Westminster Bank edged forward 7p to 451p following an investment presentation at the Edinburgh offices of NatWest Securities.

Berisford International, the food group, was heavily traded with Seaq putting volume at 26 million shares. The price eased 3p to 129p. Brabant, the oil group resisting a takeover bid from Aberdeen Petroleum, also created interest, with some suggesting that Aberdeen was trying to pick up stock. The price rose 1p to 44p.

Amstrad's claim that it could be a world leader in a new computer area, hand-held personal digitals, lifted the shares 4.25p to 35.5p. The rejected Alan Sugar offer was 30p.

Ferranti improved again on recovery hopes, ending 2p higher at 16.5p.

Stores drew strength from the Confederation of British Industry's report that February sales growth was the best for ten months. Marks & Spencer advanced 7p to 359p.

But building materials remained friendless, with Blue Circle Industries lowered 8p to 215p.

The hard-pressed advertising group WPP's pounds 88m cash call lifted the shares 10p to 70p, with the warrants going from 4.5p to 14p.

Ticketing Group held at 2.25p. Wembley is thought to have trimmed its 18 per cent stake with Clive Ng, already a substantial shareholder, picking up the stock.

Second-line and fringe shares advanced yesterday, with the FT-SE 250 share index climbing four points to a 3,121.8 peak. But the FT-SE 100 index shaded 3.3 to 2,953.4. Trading was active, with turnover reaching 822.3 million shares from 43,730 bargains. Government stocks fell by up to half a point

David Lloyd Leisure, the tennis group, has established a strong City fan club. The share sale opened and closed at 10am yesterday with merchant bank Robert Fleming saying it had been 'oversubscribed'. According to market talk the flotation has attracted a 20 times over-subscription and with bidders hovering there is talk of a 200p opening against the 150p offer.

Union Square, the property company controlled by the family of David Thompson, co- founder of Hillsdown Holdings, rose 3.5p to 9p, a two-day gain of 4.5p. The jump reflects further support from Mr Thompson and a half-time loss reduced from pounds 769,000 to pounds 9,000. Union shares reached 450p in 1987 after the Thompson involvement became known.

Hawthorn Leslie, a marine engineer turned cellular telephone distributor, has duly collected a takeover bid from Vodafone Group. But the share exchange offer, pricing Hawthorn at pounds 2.9m, came in below the market price, forcing Hawthorn shares down 0.75p to 1.75p. The bid has already been accepted by shareholders representing 71.3 per cent of the capital.

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