News of Orange flotation boosts Footsie to fresh peak

MARKET REPORT

Fresh records were set yesterday - but only just, as share prices came off the boil in late afternoon dealing. The FT-SE 100 share index, which spurted 15.5 points at the opening bell, closed 5.8 higher at an all-time high of 3,754.2.

Leading equities were given a flying start by Friday night's 60 point surge on Wall Street, and confirmation that Orange, the mobile phone network owned by British Aerospace and Hutchison Telecom, will float on the market in March. Orange is likely to be valued at more than pounds 2.5bn, and gain automatic entry to the FT-SE 100 index. BAe shares climbed 12p to 888p. Vodafone, a chief rival to Orange and a Footsie constituent, gained 5p to 231.5p.

The continued rumbling of takeover speculation also helped to keep the market in positive territory. Scant regard was paid to the latest gross domestic product figures, showing an expected 0.4 per cent rise in the fourth quarter in 1995 - the slowest rate of growth for almost three years.

More than 685 million shares went through the books, spread across a high number of trades - in excess of 44,000 at the final count.

Lloyds Chemists, which shot-up on last week's agreed bid from Unichem, advanced a further 11p to 420p. Unichem, however, slipped 7.5p to 253p as the rumour that Gehe of Germany may mount a rival bid intensified.

Institutional investors have been heavy buyers of Lloyds shares since the bid was launched. Mercury Asset Management has bought 1.9 million Lloyds shares in nine separate transactions at prices ranging from 373p to 402p.

Deutsche Morgan Grenfell, advisers to Gehe, are said to have approached Samuel Montagu, advisers to Lloyds, for the same information that has been provided to Unichem. A spokesman for Gehe yesterday declined to comment on the German company's intentions, but said "we are thinking about a number of projects".

Yesterday's share price movements resulted in the value of Unichem's bid terms falling to slightly less than 415p per Lloyds share - a 1.3 per cent discount to the market price.

Some dealers said, however, that any move by Gehe, owner of the AAH pharmaceutical wholesaling business, would not happen until after Unichem produced its formal offer document.

Meanwhile, the curtain comes down today on the epic battle between Granada, up 2p to 696p, and Forte, off 3p to 373p. Volume trading in Forte - which looks set to lose its independence - was again heavy with more than 13 million changing hands.

The Savoy group, which will almost certainly be put into play with a Granada victory, closed 3p better at pounds 11.33p. The price has now improved more than 200p in a fortnight. Similarly, Alpha Airports, 25 per cent owned by Forte, rose 3p to 113p.

Trading in Standard Chartered was also brisk at 5 million. Talk of a possible takeover bid from NatWest, 2p firmer at 657p, pushed Standard up 5p to 623p to value the bank at slightly more than pounds 6bn. BankAmerica was also tipped a possible bidder. Elsewhere in financials, Prudential slipped 4p to 430p on renewed gossip that it may mount an acquisitive strike against Lloyds Abbey Life, 2p better at 483p.

Yorkshire Tyne-Tees Television remained in the speculative bid frame, rising 19p to a fresh high of 778p. Bid rumours mainly home in on MAI, a penny firmer at 341p. Select TV, in the acquisitive sights of Flextech and Pearson, held steady at 29p despite news that MAM had sold 250,000 at the same price, cutting its holding to 1.188m. The bid price, when it comes, is said to be pitched at around 33p. Flextech fell 2p to 442p, while Pearson gained 4p to 652p.

Asda dipped 3p to 108p as Archie Norman banked pounds 1.85m from cashing in share options. The move rekindled gossip about Mr Norman pursuing his long-harboured aspirations to move into politics. Iceland, weak of late, was in demand and finished 5p better at 160p with more than 4 million dealt.

Highland Distillers met with unfavourable reaction to its pounds 46.6m purchase of a 26 per cent stake in Macallan Glenlivet. Shares in Highland, which said the deal would dilute earnings this year, fell 6p to 320p, and Macallan dropped 18p to 160p.

On the USM there were signs that the overhang of 6 million shares from a single seller a couple of weeks ago of Middlesex Holdings had finally been cleared. Shares held at 8p with volume put at 6.11 million. Tepnel Life Sciences traded 1p higher at 37p at one stage on news that Kit Madden, formerly of Wellcome, had joined as the board as a non-executive.

TAKING STOCK

o Firecrest continues to be one of the AIM's best success stories. Floated in August at 40p, the shares yesterday climbed another 13p to a peak 158p. The biggest of many trades was for 400,000 shares at the closing price. There is talk that the company will soon sell further rights to its Internet telephone system, following the pounds 1m sale earlier this month of marketing rights in Austria, Germany, and Switzerland.

o Keep an eye on Holliday Chemical Holdings. There was a single deal for 155,000 shares at 164.5p each yesterday, amid a rumour that Bayer was poised to launch a bid for the speciality chemical company. Shares trade at 164p, valuing Holliday, which recently surprised the market by holding its interim dividend payment at 2p, at more than pounds 170m.