Market Report: Bears and bulls serve Bass investors with pint of mixed

BASS SERVED a bit of a mixed pint to thirsty investors yesterday as conflicting rumours over trading did the rounds.

Dealers longing for a end-of-the-week drink saw the shares in the beer and hotel group pour 12p lower to 670.5p despite a good performance in the overall market.

Bar talk suggested that most of the damage had been done by whispers that Bass' InterContinental hotels are experiencing a slowdown in trading. The bears growled that the predicted millennium boom will fail to materialise and forecast a shortfall in Bass' 2000 earnings.

The heavyweight broker Credit Suisse First Boston added to the negative sentiment by cutting its profits' estimates from pounds 812m to pounds 732m. CSFB was said to be concerned about the level of operating profits. Fears of a competition probe into the acquisition of the pubs owned by Allied Domecq, 7.5p better at 327.25p, did some extra damage.

But the Bass glass was not entirely empty. Optimistic dealers said the company's brewery business, maker of Carling lager and Bass bitter, was making headway in the UK market. According to the rumours, fans of Bass beers have outdrunk the competition over the past few months, enabling the company to eat into its rivals' market shares. Whitbread, 23p lower to 615.5p, and Scottish & Newcastle, 7p down to 549p, were said to be the worst hit.

Remaining blue chips were punch drunk with good news as bid speculation and positive US economic data encouraged buyers. The FTSE 100 finished 25.3 better at 6,356.6, after touching a high of 6.402. The Dow's 200 point advance following the release of interest rate-positive employment numbers lent London a helping hand. Takeover talk in heavyweight sectors did the rest.

Drug stocks were on a high after news that Glaxo Wellcome, 30p better at 1,856p, is considering reopening merger negotiations with SmithKline Beecham, 66p up at 880p, in good volume of more than 37 million shares. AstraZeneca, 85p better at 2,818p, was also seen as a possible prey in the industry's consolidation game. Midcapper Medeva firmed 3.5p to 159p on renewed speculation of a bid approach, possibly from rival Celltech Chiroscience, 0.5p lower to 463p.

Telecoms were back on the bid list. Vodafone Airtouch soared 16p to 317p on growing rumours that it might team up with France Telecom to bid for Mannesmann before the German company buys Orange, 71p higher to 1,565p. Cable & Wireless missed out on the fun, slumping 20p to 693p after unveiling bad interims at its Hong Kong Telecom subsidiary.

Marks & Spencer bagged a 6.5p rise to 293.25p on rumours that Tesco, 4.75p better at 186.75p, was lining up a huge bid. Talk of a major clear- out, possibly including chief executive Bob Ayling, returned to prop up British Airways, 18p higher to 330p, while vague bid talk continued to swirl around Reuters, 17p better at 621.5p.

No such luck for Unilever. The Persil-to-Vaseline giant slipped 74.5p to 466.5p after poor results and a veiled profit warning. Fellow household products group Reckitt & Colman flushed 30.5p lower to 726p in sympathy.

The undercard had another busy session as punters resumed their chase for smaller stocks. The FTSE 250 rose 24.3 to 5,818.3, while the Small Cap edged 18.3 to 2,698.

The agreed 585p-per-share bid for Tarmac, 15p higher to 569p, from Anglo American, flat at 3,330p, put Aggregate Industries, 2.25p up to 75p, in play. Rival RMC surged 55p to 910p on hopes of a bid for Rugby, 2p lower at 118p.

London Bridge Software soared 245p to a record 3,225p after broker HSBC said "buy" and targeted pounds 34. Some of Thursday's hi-tech high-flyers came down to earth. Computer group Admiral, 82.5p lower to 1,062.5p, and chip designer ARM Holdings, 132.5p worse to 1970.5p, suffered the most.

The Archie Norman cash shell Knutsford finally fell 30p to 210p as some of the previous day's buyers got their fingers burnt. Recruiter Corporate Services rose 10p to 117p on rumours of a bid.

Talk of positive trading helped the biotech minnow Celsis 7.5p better to 47.25p, while vague bid rumours lifted Gresham Computing 9p higher to 51.5p and Scoot.Com 3.25p better to 47p.

Whispers of a deal with a major multinational pushed the Internet minnow Geo Interactive 28p higher to a record 251.5p. But talks over a 22p-per- share placing triggered a 6.75p slide to 27.5p in oil tiddler Pan Andean.

SEAQ VOLUME: 1.36BN

SEAQ TRADES: 111,220

GILTS INDEX: N/A

f.guerrera@independent.co.uk

STRANGE THINGS are happening at Newport Holdings, 1p higher to 125p. The property minnow is fighting a 120p-a-share cash bid from Trefick, an offshore investment vehicle. But last month some directors bought over 1 million shares at 120p a share. According to rumours, the sellers were investors who had bought into Newport at 135p in an early cash raising round. If the directors think 120p is a fair price, why don't they recommend Trefick's offer?

RETAIL INVESTORS are growing fond of Sterling Publishing. Shares in the publisher of business reference books hit a 12-month high of 59p after another 7p rise amid expectations of good news on earnings. Fans of the stock believe results, due out in a couple of weeks, could beat expectations of a pounds 3.94m profit. According to rumours, the acquisition in June of Net Resources, a web publisher, should boost the bottom line.