The 15-year independence of Colt Telecom looks likely to come to an end, according to City whispers, as its major shareholder Fidelity tries to persuade the rival American telecoms firm AT&T to stump up 300p a share for the business communications company.
AT&T, which had a sizeable European presence during the dotcom days but has been quieter this side of the pond over recent years, is believed to have offered 240p to 250p a share, valuing Colt at £1.6bn to £1.7bn,
Fidelity, which has bankrolled the firm since it began as City of London Telecom in 1992 and owns over 60% of it, is pushing for 300p, which would value the firm, now with its fifth chief executive in six years, at just over £2bn.
Colt supplies more than 50,000 mid-sized and major corporations with telecoms services through 12,000 miles of network across 13 countries. The company, which recently moved its domicile to Luxembourg, has 3,850 employees but has struggled against intense competition. Its 2007 earnings are expected to be flat because of a difficult German market. Yesterday Colt edged up 0.25p to 154.50p.
Elsewhere, miners were lifted by bid speculation. First came talk that the Indian-focused Vedanta Resources may receive a £25-a-share offer, following speculation last week of a possible Chinese bid worth £27. Vedanta denied it was in talks but shares still closed 158p higher at £21.92. Even so, analysts said it was unlikely the founder, Anil Agarwal, would want to sell his 53% stake now, and not at the suggested price levels.
Anglo American added 199p to £31.54 on revived speculation of a bid from Xstrata, 152p better at £33.13. The whole mining sector has been rife with such rumours ever since the BHP Billiton move on Rio Tinto this month.
Financial shares were mixed. Several central banks, including the Bank of England, are to pump more money into the system, which could be seen as concern about the continuing credit crunch. At the same time, three-month Libor, the rate at which banks lend to each other, rose from 6.561% to 6.6%.
Shaking off these concerns, Alliance & Leicester climbed 50.5p to 686p as it released a keenly awaited trading update. This showed it had lined up a £4bn two-year financing facility with Credit Suisse but had written off £55m on structured investment vehicles. Bradford & Bingley said it had secured funding through to the end of next year, and its shares edged up 0.25p to 303p.
But Royal Bank of Scotland lost 1.25p to 443.25p. As if to prove the uncertainty surrounding banks, there was an early rumour that RBS would have to make a £12bn write-down, but analysts dismissed the story.
Overall, the FTSE 100 moved higher, up 42.9 points to 6349.1, making a two-day rise of more than 200 points.
The leisure group Rank leapt 15.75p to 108p on renewed bid talk, with rumours that the Hong Kong-backed group BIL International might be stakebuilding. A few days ago came reports that the US casino group Harrah's was interested in an asset swap with Rank.
Shares in the waste management group Biffa, rose 10p to 319p as private equity groups Montagu and HgCapital made another approach to the company after their first proposal was rejected.
The engineering firm FKI rose 11.75p to 81.5p. The company announced a 10% rise in first-half profits and said it would wait for the right price to sell its hardware division and its Logistex sorting equipment business.
Among fallers, pubs group Mitchells & Butlers sent the sector lower after it warned of weakening consumer confidence, with its shares losing 35.5p to 585.5p. After it reported a 25% drop in half-year profits on Wednesday, the electrical retailer DSG International fell 4.7p to 113.5p as a number of brokers cut price targets. JP Morgan cut from 130p to 125p and Citigroup from 160p to 120p.
The tool hire business Speedy Hire fell 47p to 868p, despite what seemed reasonable profit figures announced on Wednesday. UBS said it believed the shares were oversold but did cut its price target from £15 to £13. David Wallis, non-executive chairman, picked up 10,000 shares yesterday at 892p.
The London Stock Exchange slipped 20p to £17.70 despite news it is joining the FTSE 100 on Tuesday to replace Invesco, which is listing in New York.
Lower down, the mobile games publisher Superscape was 2.15p better at 8.75p as it revealed it was in talks about a possible cash offer at a premium to Wednesday's share price.
The technology consultancy Vega added 19.5p to 239.5p on talk of a bid and after the market closed came news that the Italian defence company Finmeccanica had agreed to buy Vega for 280p a share, valuing it at £61.6m.
But the troubled property group Erinaceous dropped 5.01p to 9.24p after it said its restructuring could involve a debt-for-equity swap, which would leave shareholders heavily diluted.
Hit parade
Kaupthing analysts have picked the retail winners from the latest Hitwise figures for online traffic. HMV is fighting back, up from 22nd to 11th in the Hitwise list. Marks & Spencer and Debenhams also did well, as did fashion retailer Asos. Kaupthing said: "The data reflects the number of hits on sites only, but where conversion rates are meaningful this will translate into top line growth. For example, we know that Asos has a high conversion rate (of around 8%), so this should be a positive indicator." Asos added 1.5p to 180p, but HMV slipped 4.75p to 114.5p, M&S 14.5p to 594.5p and Debenhams 3.75p to 90p.