Market report: Friday close

HOPES of a bid for perennial takeover candidate

TBI

It has emerged that French construction giant Vinci was yesterday's seller of 22m shares at 64p, cutting its holding in the owner of Luton Airport to 61.2m shares, or 11%. That leaves it nursing a loss on the sale of almost £6m, having paid on average around 90p a share for the initial investment.

The sell-off leaves TBI with a potential stock overhang in a further 61.2m shares and that left the price down 1/2p at 64 1/2p. Only yesterday TBI reported a near-6% rise in passenger traffic which compares with a 9% rise for rival BAA, steady at 556p.

Vinci made a bid approach, rejected by the TBI board, just before 9/11. But speculators have kept a close eye on the shares. It is reckoned that bargain-hunter JO Hambro Capital Management, which already has a 4% holding, may have bought some of the shares from Vinci.

Still in the wings is Irish racehorse owner Dermot Desmond, who continues to hold 28m shares, or almost 6%. He also owns London City Airport.

The rest of the market traded in a narrow range, with the FTSE 100 index rising 9.5 to 4390.6. In New York, the Dow Jones industrial average rose 47.64 to 10,219.20 and the Nasdaq composite index added 16.42 to 1,951.74 in early trading.

Bid target Marks & Spencer rose 4p to 367 3/4p ahead of Monday's strategic review.

Shire Pharmaceuticals slipped 8p to 466p. US securities house Lehman Brothers rates Shire underweight but is sticking with its 490p target price. It says 70% of royalty income is at risk, due to increased competition to Glaxo-SmithKline's HIV treatment Combivir, which provides most of Shire's revenue. GSK was down 4p at 1087p after agreeing to pay $92m (£50m) to settle a US anti-trust case involving its antibiotic Augmentin.

The payment will settle class actions dating back several years. The company says legal charges amount to $315m, which will come out of second-quarter earnings, but this should be offset by profits from equity investments. Earnings forecasts are unlikely to be affected.

Deutsche Bank has turned bearish-of housebuilders, downgrading the sector from buy to hold. It reckons they have enjoyed a good run and look fully priced. Persimmon, 4 1/2p cheaper at 610 1/2p, is cut from buy to hold, along with Barratt Developments, down 2p at 562p.

Deutsche tells clients that if they have to stay weighted in the sector, they should look at Bovis Homes, 1/2p better at 514 1/2p, and George Wimpey, 1 1/4p off at 359 3/4p.

Sportswear retailer JJB Sports fell 15 1/2p to 258 3/4p in response to disappointing sales numbers. Analyst Richard Ratner at broker Seymour Pierce has cut his pre-tax profit forecast from £91.2m to £89.5m.

Troubled rail contractor Jarvis rallied 6p to 34 1/4p as some of the bears squared positions following this week's sharp fall on news it is in breach of its banking covenants. There is also vague talk of a bid from the Spanish construction group Ferrovial. Jarvis has until the end of the month to sort itself out.

It was the first day of dealings on AIM for Avanti Screenmedia, a provider of television services to shops, following a placing by broker Seymour Pierce of 2.3m shares at 130p. The price touched 137 1/2p before settling at 133 1/2p. Shares in NCC Group also started trading on a when-issued basis at 176 1/2 following a placing at 170p.

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