B&B says goodbye to elite status

WHILE merchant bank

It goes from bad to worse for B&B. Chief executive Chris Rodrigues shocked the City in March by quitting for a lucrative job in San Francisco. Steven Cranshaw replaced him and immediately masterminded a strategy about-turn in May.

He put several non-core businesses up for sale, including John Charcol, which it bought in 2000 for £100m. Goldman Sachs was given the job of handling the auction.

The UK's biggest estate agent Countrywide (5 1/4p better at 287 3/4p) and private equity groups Isis Equity Partners and 3i are believed to be ready to pay up to £50m for B&B's estate agency chain.

Meanwhile, B&B has already sold two small wealth management firms to financial adviser John Scott & Partners.

The B&B share price has been hit by worries that as the housing market cools, buy-to-let loans could be the first area to suffer.

B&B has a leading position in the buy-to-let market. Indeed, it accounts for 22% of its mortgage book.

With HBOS (8p up at 713p) on the verge of launching its counterbid for Abbey National ( 1/2p dearer at 612p), professional punters believe that B&B could easily be the next takeover target in the sector.

Barclays (4p off at 528 1/2p) had a look and walked away, while Royal Bank of Scotland (8p better at 1601p) has been mentioned in the same breath as B&B before.

The Footsie retrieved an early 16-point deficit to finish 1.8 points up at

4565.6. Disappointing July manufacturing production and industrial output data combined with recent signs of a loss of momentum in the housing market and weak retail figures for August, make it even more likely that the Bank of England will leave UK interest rates on hold tomorrow.

Making up for lost time following Monday's Labor Day holiday, Wall Street jumped 81 points in the early stages ahead of Fed chairman Alan Greenspan's testimony to the House Budget Committee today.

Discount clothes group Matalan responded to a revival of ancient takeover rumours with a speculative gain of 11 3/4p to 226p. Turnover swelled to 13m. For the umpteenth time in recent weeks, US retail giant Wal-Mart is said to be ready to launch a £1bn knockout bid.

Justin Scarborough, at Lazards, says the prospects of a bid are low and that if an offer were to materialise then it is unlikely to be pitched much above 250p.

Vague rumours that struggling online travel group ebookers has received a bid approach accompanied a gain of 7 1/2p at 178 1/2p. The stock has risen more than 50p since the shock profits warning last month.

Rumours that Cable & Wireless is about to spend some of its £1.4bn cash pile on an acquisition left the shares 4 1/2p up at 114 3/4p. Thus, a possible target, buzzed 1 3/4p higher to 19p after winning a Chrysalis contract. The Heart radio station group is to use Thus's national MPLS IP network to carry data and broadcast traffic between its five major UK sites.

Fears of a cigarette ban in UK bars and restaurants continue to plague tobacco stocks. Gallaher lost 7 1/2p to 650p ahead of today's interim figures, while Imps declined 26p to 1219p.

Talk that forthcoming interim results will make pleasant reading helped stockbroker Collins Stewart Tullett to jump 21 1/2p to 390p.

Struggling furniture group Courts cheapened 7p to 88p after warning that it could be hit with a sizable bill for unpaid VAT. The company has in the past warned that it could be faced with a bill of around £44m.

Aim- quoted restaurant group Clapham House advanced 14 1/2p to 140p. Its recently-acquired eateries The Real Greek and The Bombay Bicycle Club are trading ahead of expectations.