INVESTORS RUSHED to get their hands on Securicor stock late in the session amid suggestions that a rival bid to the proposed tie- up with Denmark’s Group 4 Falck could be on the way. The buyinginterest pushed Securicor 0.75p higher to 119.25p as traders positioned themselves to profit from such an outcome.
Who this predator might be was unclear yesterday but attention inevitably focused on Securicor’s biggest rivals Securitas and United Technologies. Securitas, which is based in Sweden, is the world’s biggest security group and could easily swallow Securicor. If interested, it could probably table a more enticing offer to Securicor shareholders than the nil premium deal being offered by Group 4 Falck. As could America’s United Technologies, which acquired Chubb in a $1bn deal last year.
Under the terms of the planned Securicor/Group 4 link-up, a newly formed UK company would buy shares in both firms. Then shares in the combined group would be listed in London and Copenhagen. The major attraction to Securicor shareholders of such a deal would be the cost savings the combined group would enjoy.
Elsewhere, technology stocks were hit by disappointing results from peers across the Atlantic. Figures from the US networking giant Cisco Systems failed to inspire, while a profit warning from the telecom equipment maker Ciena hit sentiment towards the New Economy hard. Hence, in London, Bookham Technology dropped 6.5p to 163.25p, ARM Holdings gave up 4.5p to 120.75p, Spirent fell 2.75p to 79.25p and Dimension Data lost 1.25p to 42.25p.
Despite the gloom in the technology sector, the FTSE 100 managed to rise 7.9 points to 4,398.5.
Egg retreated 3p to 172p amid vague whispers that attempts by Prudential to sell its 79 per cent stake in the company had hit a snag and could be in jeopardy. However, a source close to the insurer poured cold water on the speculation and said talks aimed at the sale of Egg remained on track. Shares in Prudential certainly did not respond to the rumour, rising 7.75p to 487p.
Lower down the pecking order, Spirax Sarco gained 10p to 550p as Credit Suisse First Boston told its clients to take a good look at the engineer before its full-year results next month. CSFB believes the group’s shares are cheap when compared with European peers, especially given their 10 per cent drop over the past few months.
Spring jumped 12p to 129 after the IT recruitment group boasted of securing a pounds 100m contract with a major high street bank. The move prompted analysts to revise up their earnings forecasts for this year and next.
Easyscreen dropped 2.75p to 29.25p after its chairman, Philip Docker, sold 425,000 shares at 30p. Mr Docker retains a 13 per cent holding in the company of 8.9 million shares and said he would use the cash raised from the disposal to fund the purchase of a house in Chicago, from where he will oversee the development and growth of Easyscreen’s US business. Meanwhile, ZincOx Resources rose 5p to 77p after the purchase of 25,000 shares at 72p by Peter Fry, the group’s finance director. Among the group group’s assets are potentially significant zinc prospects in Yemen and Mexico.
Redbus Interhouse gained 2.5p to 11.6p on rumours the computer services group is close to winning a million-pound contract from a building society. Hopes of a contract win also drove the video telephone maker Motion Media 3p better to 15.5p. Traders moved into NetStore, up 2.5p to 44.25p, before this month’s results from the firm. One reason people were buying into NetStore was talk that the figures will make pleasant reading for shareholders and could even beat expectations.
Another day and another strong performance by British Energy, despite attempts by the company to downplay all the excitement surrounding the stock. British Energy issued a statement to the stock exchange yesterday telling investors it knew of no reason for the recent jump in the group’s shares price. The statement was issued just before midday but did nothing to quell traders’ appetite for the stock, which finished 2.24p higher at 10.25p, as about a fifth of the company’s total share capital changed hands.
Despite rumours that the US hedge fund Appaloosa has been adding to its 4 per cent stake in the electricity group, it is yet to make an official announcement to the Stock Exchange to confirm this. Should Appaloosa build a significant stake in British Energy, market professionals reckon the hedge fund would try in some way to renegotiate the terms of the group’s debt restructuring.
David Tepper, who heads the fund, is said to be very experienced in these matters. He is presently co-chair of the committee of creditors to the US energy giant Mirant, which is in bankruptcy proceedings. All eyes are now on Appaloosa to show it is really interested in shaking things up at British Energy by adding to its stake. Of course, given the stock jump since the fund’s involvement, it might well be tempted to pocket the profit it has already made on its holding.
