Takeover fever boosts blue-chip towards all-time high

MARKET REPORT

Takeover fever pushed blue chips to within a whisker of their all-time high. Granada's dawn raid on Yorkshire-Tyne Tees Television and Rentokil's admission it wants to buy BET, the services group, produced an array of double figure gains as speculators hunted for the next target.

All the old bewhiskered favourites were dusted down; a few less obvious candidates were also dragged into the frame.

The FT-SE 100 index gained gained 34.8 points to 3,779.8, just 1.5 points from the peak established two weeks ago. The supporting index, which has for long lagged behind the blue chip measurement, was in even more positive form, claiming its third record on the run.

Lower interest rate hopes and a Scott Report, which seemed less damaging than many had feared, were other factors behind the market's upsurge.

Yorkshire jumped 150p to 1,017p with the warrants 158p higher at 825p. Granada, fresh from conquering Forte, picked up 10 per cent of the capital through Barclays de Zoete Wedd and ABN Amro Hoare Govett. It is now in a position to control Yorkshire's destiny, holding nearly 20 per cent with a deadlocked joint venture accounting for a further 3.88 per cent. Granada gained 9.5p to 734.5p.

BET, where a Stock Exchange leak investigation is surely underway, surged 34.5p to 184.5p with Seaq putting turnover at approaching 49 million shares. On Wednesday the shares gained10.5p with volume reaching 28 million.

Rentokil, which is seeking an agreed deal, was the worst performing blue chip, off 26p to 336.5p.

The latest episode in the Yorkshire soap opera sent shares of other broadcasting groups bouncing higher. Scottish TV went to 685p, up 57p, and Ulster TV gained 62p to 1,330p. The action flowed over to radio shares with Golden Rose, where Guardian Media has lifted its interest to 14.47 per cent, 11p up at 64p and GWR 14p higher at 225p.

Carlton Communications, still a candidate for barging into the agreed United News and Media merger with MAI, missed the party, falling 17p to 1.029p.

United rose 7p to 639p and MAI 24p to 446p. Other media shares were caught in the excitement. Mirror Group Newspapers, regarded by some as a possible Carlton target, rose 6p to 209p and Pearson put on 27p at 706p.

Elsewhere Ladbroke had another intriguing session, gaining 8p to 181p as takeover chatter continued. Royal Bank of Scotland, up 14p to 567p, and Yorkshire Electricity, 17p at 733p, were others touched by renewed speculation. Lasmo, on hopes of a bid from one of the oil giants, improved a further 4p to 175p.

Austin Reed, the retailer, caught the excitement, gaining 18p to 204p on talk Burton, 3p firmer at 132.5p, was contemplating a strike.

Clearance of its controversial US acquisition lifted Farnell Electronics 2p to 639p.

Shire Pharmaceutical could hardly have chosen a better day for its debut. Even so a jump to 218p from the 175p placing price was impressive.

General Accident ignored a Credit Lyonnais Laing downgrading, gaining 20p to 646p. Abbey National continued to enjoy the SBC Warburg buy recommendation, gaining 22p to 613p. Lloyds TSB, launching the bank profits season today, rose 12.5p to 347.5p.

Vodafone was ruffled by profit downgradings, falling 5p to 226.5p and Harrisons & Crosfield ran into selling, losing 5p to 157.5p.

British Aerospace rose 13p to 837p as the stories of a deal with General Electric Co were given another whirl and downcast Hanson perked up 6.25p to 186.5p as Merrill Lynch moved from sell to hold.

Frost, the petrol retailer, continued its revival with a 10p advance to 153p. Killik, the stockbroker, is keen on the shares but Merrill Lynch has them on its sell list.

Union, the finance group, held at 100p as Joseph Lewis, the acquisitive Bahamas-based investor, increased his shareholding to 14.15 per cent, buying 600,000 shares.

Lopex, the advertising and marketing group, edged ahead to 16p in busy trading. A stock overhang of 2.27 million shares was cleared at 15p.

A profit warning lowered William Jacks, a Malaysian controlled garage chain, 16p to 38p. Superscape VR, the computer group, gained a further 25p to 625p in response to its marketing deal with IBM. Manx & Overseas' US Internet link firmed the shares to 23p.

WT Foods held at 33p. Talk persists it is near to buying a large unquoted food producer.

TAKING STOCK

rA profit warning from Hornby, the toys group, had an unusual impact - it sent the shares higher, 17p to 170p. The caution accompanied an announcement the group had sold its loss making sportsboat business. It said losses from this operation, plus restructuring costs, would leave results below market estimates. The market had been expecting profits of more than pounds 1m against pounds 600,000. Hornby will have to book a pounds 4.2m loss on the sportsboat sale and also has to contend with a pounds 700,000 investment write off.

rNovo, the data storage and film entertainment group, could achieve profits of pounds 2.87m this year and pounds 3.06m next year, believe stockbroker Williams de Broe.

Analyst Simon Lapthorne regards the shares, unchanged at 33p, a buy.