The long-awaited £1.9bn takeover by PowerGen of East Midlands Electricity, the regional electricity company (REC), whipped up interest in the energy sector on a cautious day for the stock market.
Dealers marked PowerGen down 20p to 830p after analysts trawled through the detail of the deal, while attention moved to the last remaining independent REC, Southern.
Now left out on a limb as an obvious takeover candidate, Southern rose 6p to 535p. Hyder, the combined Welsh utilities group also gained 4p to 929p on hopes of further consolidation.
The FTSE-100 Index moved cautiously ahead despite a strong pound, rising 17.7 points to 5895.1 in the opening minutes, taking heed of strong international markets.
Car audio security group Toad leaped up 1p to 25p after announcing improved earnings for the year. Sales will also be boosted by a £3m contract to supply policyholders of Royal & Sun Alliance, also announced today.
More dramatic price moves were wired in from the telecoms sector as Cable & Wireless announced the sale of a stake in the Latvian company Lattelkom for £146m.
The move takes C&W’s sale proceeds from non-core assets to £700m since last November and shares rose 14p to 731p in applause.
Meanwhile, investors continued to demand Orange shares, squeezing them up yet another 9p to 645p after a weekend of glowing coverage in the media. And BT gained 11p to 763p amid hopes of further consolidation.
Insurance group Royal & Sun Alliance jumped up 10p to 629p after reports of a widespread senior management rejig at the group.
The rise came on a fairly stable day for insurers, compared with recent falls. GRE gained 3p to 368p, Norwich Union edged up 3p to 432p and the Pru rose a penny to 800p.
British Aerospace soared ahead on reports that British Airways was set for a £2.3m order of jets from Airbus Industries, marking a switch in its allegiance with Boeing. BAe powered 17p up to 446p on the news, with its supposed new customer up 4p to 642p.
PA News 29/06/98
