The latest round of euphoria over merger mania subsided today as the stock market paused for breath. A thin start to the session came as the Bank of England and the US central bank prepared to meet to discuss a possible rise in interest rates.
There was an air of caution following yesterday’s meteoric rise with the FTSE-100 Index 21.5 points lower at 5,577.5 but NatWest Stockbrokers saidinterest rates had peaked and that the bull run would resume later this week.
After yesterday’s surges, Glaxo Wellcome fell 51p to £19.32 and SmithKline Beecham down 6p to 839p. There was excitement in the City after Great Universal Stores made an “unsolicited” £1.6bn offer for high-street retailer Argos.
All eyes were on Argos with traders awaiting its response to GUS’s bold approach. GUS improved 8p to 741p, while Argos soared 167p to 609p.This also helped lift rivals Dixons 17p higher to 509p.
Meanwhile, a bidding war for The Energy Group was looming after the UK giant confirmed it was still in talks with Texas Utilities. Texas said the discussions could lead to an offer and its comments came after US rivals PacifiCorp raised its bid for Energy Group by 13% to £4bn. Energy advanced a further 17p to 772p.
Enterprise Inns launched an agreed £48m offer for Gibbs Mew in a deal creating a group of more than 1,500 pubs. Enterprise frothed 14p to 306p with Gibbs Mew seasoning 30p to 339p.
Satellite broadcaster British Sky Broadcasting confirmed it planned to launch its new digital service in June. The company rose 19p to 361p.BSkyB also said it was expecting to serve a writ on Carlton Communications if it did not pay the £30m associated with the contract to supplyprogramming for British Digital Broadcasting. Carlton slipped 1p to 435p.
PA News 03/02/98
