Market report: Yesterday's trading

By Geoff Foster for MailOnline
Updated: 03:04 EDT, 8 December 2006

You win some, you lose some in this manic bid-crazed market.

Christmas certainly came early for many professional punters when shares of Benson & Hedges and Silk Cut cigarettes group Gallaher soared 211p to 1190p on confirmation of a bid approach - probably from Japan Tobacco.

But their celebrations were soon cut short when Premier Oil crashed 220p before closing 141p down at 1205p after saying it has terminated takeover discussions with all interested parties. Both stocks had been heavily punted on bid hopes in recent weeks.

So far this year there has been a stonking $1.6 trillion worth of European takeovers, compared with $998bn in 2005. UK plc is up for grabs at the right price and the Footsie continues to be driven higher by the juicy prospect of yet more mega bids and deals to come in 2007.

It closed 41.2 5 points higher at 6,131.5, while the FTSE 250 advanced 31.1 points more to a record 10,891.3.

Wall Street lost a 51-point gain to trade 14 lower ahead of today's crucial non-farm payroll (employment) data which will determine future interest rate policy.

The Federal Reserve meets on Tuesday to discuss rates. Threadneedle Investments says the pace of economic growth is slowing down and this will prompt the Fed to reduce rates in the first half of next year.

As rumours of a counter bid for Gallaher did the rounds, Imperial Tobacco soared 192p to 2079p and BAT added 32p to 1455p. French Spanish cigs group Altadis refused to comment on the Gallaher situation but could enter the fray, as could Bats.

Many dealers believe the insurance sector is where the next mega Footsie bid will materialise. Legal & General firmed 4p to 157½p on vague gossip the Prudential is lining up an offer.

But that jackanory was taken with a pinch of salt and punters chased the Pru 28p higher to 680p amid continuing rumours of a bid from HSBC, 1p dearer at 919p.

Everyone says Pru's UK operations are underperforming while its Asian operations are outperforming. HSBC is known to want 20% of its future revenues to come from life insurance products and Prudential has been in play since Aviva's (10½p better at 811p) £17bn bid failed earlier this year.

Perhaps top broker Cazenove believes Pru's days of independence are numbered. It yesterday upgraded to outperform from inline-Resolution, which is up for sale, gained 15½p to 654½p. Revived Bank of America takeover speculation lifted Barclays Bank to 719p before it closed 20½p up at 707p.

The Black Horse bank LloydsTSB galloped 7p ahead to 550½p on persistent speculation that Spanish banking giant BBVA will launch a £7-plus a share cash offer before Spanish tax rules change early next year.

Talk of a pending broker's circular helped plumbing giant Wolseley climb 38p to 1246p.

Growing speculation it could be the next retailer after Woolworths to warn about slow pre-Christmas sales, Next lost 31p to 1750p. Woolworths jumped 5p to 37½p on heavy turnover of 37½p on hopes a private equity bidder will now put it out of its misery. Remember, Apax Partners this year left it at the altar.

Proctor & Gamble takeover hopes blew condoms maker SSL International 17½p higher to 371¼p.

Another hectic day's trade in Commoditrade saw more than 32m shares traded and the international commodities investment group forced to admit that it has received several takeover approaches. It touched 37p before closing 5¼p higher at 36½p. Word is the take-out price will be north of 50p a share.

It is trading strongly and after only eight months, pretax profits are around £12m-plus, compared with last year's 12-month total of £7.1m.

Andrew Regan's Corvus Capital, which happily sits on 21.1% of Commoditrade, gained 1p more at 14¾p.

Software group Surfcontrol zoomed 116p higher to 545½p on news of a bid approach.

Medical House, the drug delivery and orthopaedic devices group, rose 7½p to 38p after signing a development, licence and supply agreement with a leading, but as yet undisclosed, global pharmaceuticals partner for its AutoSafety injector system.

After directors bought stock at 19½p, ReNeuron added 19p more for a two-day leap of 23⅞p. The biotech company lit the touchpaper after revealing it is seeking US Food & Drugs Administration approval to start clinical trials of its experimental treatment for chronic disability caused by stroke.

Earthport came to life at 22¼p, up 1¼p, after saying it has become a payment services partner for NuSkin Enterprises.

• Ahead of its planned flotation on Aim, Applied Intellectual Capital has collaborated with listed Weatherly International (unchanged at 20p) to evaluate the recovery of copper, zinc and other metals from substantial refining waste and mine tailings held by Weatherly.

AIC has developed a commercial process to separate and refine metals from highly buffered and high alkalinity ore bodies.