Benfield leaps on US suitor hopes

THE Yanks are coming for

It is common knowledge that Benfield held bid talks with Marsh & McLennan in 2002. They foundered when the two parties could not agree on a price or the role Benfield's senior managers would have within an enlarged US group. Benfield then proceeded with plans to float on the UK market and duly arrived last June at 250p.

Marsh & McLennan recently bought security firm Kroll in the US and could have enough on its plate bedding that company down. Dealers think that rival American insurance and reinsurance broker Aon Corporation could be the name in the frame.

One thing is certain, a £725m or £3-ashare cash bid for Benfield would lead to significant windfalls for its directors who have already amassed fortunes. Chief executive Grahame 'Chilly' Chilton, a big Formula One fan, owns 9.5% of the equity and chairman John Coldman 6.8%.

Helped by the strong overnight recovery on Wall Street from 90 points down to 32 up, the revitalised Footsie marched past 4400. It finished 62.5 points up at 4418.7 after impressive results from former bellwether ICI (24 1/4p better at 229 1/2p) and a reassuring trading performance by Shell (10p dearer at 400p) confounded pessimists and reaffirmed the belief that corporate Britain is in good shape. The Dow rose 45 points more in early trading yesterday.

Despite a declining share of the grocery market to 16.3% to 15.5% in the quarter to July, J Sainsbury rose 5 3/4p to 268p. Punters dream that entrepreneur Philip Green will move his corporate tanks to the struggling supermarket's lawn once he returns from recharging his batteries in Monaco.

Green was prepared to pay £4 a share or almost £9bn for Marks & Spencer (3p up at 347 3/4p) and put up well over £1bn of his own cash in the process. He has the fire power to put Sainsbury out of its misery and dealers believe that if he tabled a cash bid in the region of 360p a share, worth £6.1bn, the Sainsbury family which controls 28% of the equity would find it extremely hard to resist. City institutions would surely bite Green's hands off.

Asset manager Amvescap, whose Invesco funds group is being investigated for allegedly allowing improper mutual fund trading, touched 265p before closing 19 3/4p down at 285 1/2p. Investors ran for cover after a 40% fall in second-quarter profits and the board's decision to delay payment of a dividend until it reaches a settlement with US regulators.

Following the outbreak of West Nile virus, which is transmitted by mosquitoes, in the US and in Portugal, buyers piled into vaccines developer Acambis. Shares of the company, which began Phase I trials of its West Nile vaccine in November, shot up to 350p and closed 17p better at 332 3/4p.

Capital Radio reflected acute disappointment with the latest Radio Joint Audience Research figures which showed that its flagship 95.8FM London station is losing market share - 6.6% from 7.9% - in the lucrative breakfast show battle. It dropped 36p to 435p. Analysts had expected volatility because newcomer Johnny Vaughan had a hard act - presenter Chris Tarrant - to follow.

Chrysalis improved 2 1/2p to 199 1/2p on hearing that its Heart 106.2FM audience has rebounded from 5.8% to

6.5%. SMG, which saw its Virgin audience rise to 2.7% from 2.3%, edged up 1/4p to 98 3/4p.

Construction company Alfred McAlpine fell 23 3/4p to 260p following a 16% fall in interim profits to £6.7m because of problems at its infrastructure support division.

Builder Johnston Group soared 170p in a restricted market to 407 1/2p following a share-exchange bid from Ennstone, 2p off at 33p.