Telecoms stocks buzzed with anticipation today on the back of hopes cable television group Telewest was about to receive a £6bn takeover approach.
The company, which has seen its share price suffer recently, perked up 7% after a report over the weekend said a US venture capital company, Callahan Associates, had approached the company regarding an offer. Shares rose 11p to 171p.
Other telecoms stocks rallied, with Energis up 5p to 495p, BT up 14p to 867p and Colt Telecom up 120p to £21.60. The buoyant telecoms sector helped the wider market off to a positive start and by mid-morning the FTSE-100 Index was up 27.7 points at 6391.2.
Gains on the US and Far Eastern markets also helped keep London shares in positive territory. Other risers included power utility company Scottish & Southern Energy, which warmed up 3p to 578p after agreeing to buy the Swalec energy supply business from nuclear power generator British Energy. The £257m deal will see it take on 850,000 electricity and 300,000 gas customers.
Still in the utilities sector, shares in Welsh group Hyder trickled 6p lower to 349p after the group announced its board would back the latest 340p a share takeover approach from US-controlled Western Power Distribution.
Analysts said the takeover battle for Hyder between WPD and Japanese investment bank Nomura now looked to be drawing to a close and were unsure whether Nomura would counter WPD’s bid.
Acquisition deals also sparked shares in aerospace and engineering group McKechnie, which jumped 5% after yesterday’s announcement that it had received a £434m takeover bid.
The management buy-out offer, which is backed by venture capital group Cinven, values McKechnie at 400p-a-share. Shares in the group jumped 21p to 392p on the news.
Car distribution group Inchcape fell 3.5p to 295p as the company unveiled a fall in profits at the half-year stage.
The group blamed competitive markets and a rise in internet investment costs on the shortfall.
EGi News 07/08/00
