Market Report: Investors lock into Securicor on talk of safe takeover bet

INVESTORS LOCKED themselves into Securicor yesterday as the market tipped the security group as a safe bet to be taken over. The stock touched an all-time high of 159p after a 7.75p rise as rumours of a bid prevented dealers from going off on their Christmas shopping.

The security specialist has been in play since selling its 40 per cent stake in mobile phone group Cellnet to BT, down 28p to 1,399p. Rivals including Williams, 7.75p lower to 303.75p, and Rentokil, 0.25p off to 234.5p, were rumoured to have had a look and their names were back on the predators' list yesterday. The new twist to the Securicor tale was whispers that the high-profile acquisitor Lionheart, 2p lower at 20p, could have a go.

At present Lionheart is a cash shell filled only with the famous names of Pizza Express entrepreneur Luke Johnson, fund manager Jim Mellon and Gary Ashworth, formerly of Abacus Recruitment. However, the three musketeers are keen to splash out on an acquisition in the business services sector and Securicor looks like a compelling proposition.

After the Cellnet sale, the group is a focused business with a large market share of the lucrative market for transporting cash and valuables. It also owns a recruitment business which could grow fast in Mr Ashworth's capable hands.

Securicor's final results are due tomorrow and it will be interesting to see whether the directors' mouths remain locked on the takeover issue.

The day's other intriguing story concerned the housebuilder George Wimpey. The stock ended just 1.5p lower at 112p but just before the close a huge line of nearly 40 million shares - around 11 per cent - of the company was sold at a cut-price 103p. The whisper was that the heavyweight fund manager Prudential had dumped part of its 14-per-cent stake, possibly as part of a portfolio reshuffling. The sale could spell bad news for Wimpey shares this morning as other investors might follow the Pru's lead. However, some observers suggested that the deal could have been part of a tax-related trade.

The overall market suffered of a bout of pre-festive dullness. The FTSE 100 fell 8.6 to 6,702.1, as strong US retail sales numbers reawakened rate hike fears and caused an opening fall in New York. Weakness in big drug stocks also helped to depress London's mood.

The pharmas were undone by talk of a sector downgrade from broker CSFB and whispers that the US state of Massachussets is preparing laws to slash the cost of medicines. The double whammy sent SmithKline Beecham 41.5p lower to 777.5p, AstraZeneca 67p lower to 2,578p, and Glaxo Wellcome 39p down to 1645p.

The pharmaceutical group's sick state overshadowed a robust performance from three transport stocks. Railtrack steamed 60p higher to 887p on hopes that today's regulatory review will be lenient.

Cruise giant P&O sailed 46p higher to 1001p on talk of a strike from US rival Carnival and a CSFB push.

And British Airways flew 16.75p higher to 394.75p after its finance chief told a Tokyo audience that prospects for 2000 and 2001 are good.

Retailers were also well-bid as punters filled their trolleys with Sainsbury's, 22.5p higher to 344.5p, and Marks & Spencer, 11.75p better to 285.5p, on returning bid talk.

Drinks group Allied Domecq toasted an 11p rise to 309.75p despite a ludicrous rogue trade at 102.75p, on whispers of good Christmas sales and bid speculation.

Oil group Shell flared 17p higher to 474p on hopes that today's analyst seminar will bring news of radical cost-cutting and the disposal of the chemical operations. Talk of a break-up lifted both gas group BG, 10.75p to 368.25p, and generator National Power, 10.5p higher to 402.75p.

The FTSE 250 outdid its bigger brother with a 15.7 rise to 6,283.1 thanks to a flurry of activity at United Biscuits. The McVities' group baked 19.5p higher to 254.5p on hopes that the Danone-led consortium will trump a 245p-per-share offer from a Nabisco-led consortium with a 260-265p strike.

Renewed bid talk pushed glassmaker Pilkington 6.5p higher to 85.5p and oil explorer British Borneo 12p better to 193.5p. However, water utility Hyder flushed 24.5p lower to a worst-ever 268p on growing fears of a multimillion pound cash raising.

The Small Cap ended its winning run with a 12.2 fall to 2,997 as many of the high-flying Internet stocks took a tumble. Punters said that many brokers had stopped dealing on long settlement times to avoid being caught out by the Millennium.

Internet investor eVestment, 7.5p lower to 25.5p, and software minnow Keystone Software, 15p lower to 65.5p, were two victims.

Property Internet bucked the trend with a 25p rise to 149.5p after being selected by Microsoft to supply online property news. Furniture minnow Harveys Furnishing moved 7.5p higher to 159p on talk of good results tomorrow.

Headhunter Corporate Executive, suspended at 6p, confirmed its Internet deal by buying an online credit-card payment processor. It also launched the daftly-named Boldly-Go.com, an Internet recruitment site, amid rumours that Captain Kirk and Mr Spock will join the board.

SEAQ VOLUME: 1.84BN

SEAQ TRADES: 106,597

GILTS INDEX: 107.10 -0.38

f.guerrera@independent.co.uk

THE TROUBLED builder Costain, flat at 19p, could have caught the eye of a couple of rivals. The contractor has been on bid alert since its biggest shareholder, Malaysian group Intria, decided to sell its 37 per cent stake. The Swedish construction giant Skanska is believed to be interested, as it already owns around 7 per cent of Costain. However, it could be trumped by a UK group such as Taylor Woodrow or a

Middle-Eastern builder.

CAPITAL OPPORTUNITIES investment trust is believed to have holdings in a wide range of privately-owned and publicly-quoted hi-tech companies but has so far failed to benefit from the web fever.

The shares hit an all-time high of 148p yesterday but are still well below the value of Capital's investments. Punters believe the trust will soon publish figures showing that its net asset value is around 180p.