Canadian offer GSK punters CAN refuse

THE cheek of it! There was a flurry of excitement in the drugs sector just before the close when dealers heard that TRC Capital, a Canadian private investment company, had launched an audacious unsolicited mini-tender offer to buy up to 2.5m of GlaxoSmithKline's American Depositary Receipts, the equivalent of 5m ordinary shares, or 0.08%, at $38.10 per ADR.

GSK was quick to disassociate itself from the offer, advising ADR holders to ignore it. GSK shares, which had earlier been sold down to 1190p, rallied to finish 9p easier at 1201p.

Mini-tender offers seek less than 5% of a company's shares, avoiding many disclosure and procedural requirements of the US Securities Exchange Commission. It recently launched a probe into such activities and advises investors worldwide to be on guard.

TRC Capital has a history of making below-market or mini-tender offers. Barrick Gold, Sarah Lee, Financial Services of Canada, Stanley Works and more recently oil giant BP (3 1/4p dearer at 422 3/4p) have been subjected to its unwelcome and annoying offers.

Hefty buying in anticipation of good second-quarter results today helped Smith & Nephew soar 22p to 380p.

Speculation is rife that it is ready to increase its offer for Centerpulse, the Swiss maker of artificial hips and knees which is the subject of a higher, unsolicited offer from Zimmer of the US.

Zimmer's £1.8bn bid has been cleared by antitrust authorities in America and Europe and is well above S&N's earlier agreed cash and shares offer of £1.5bn. Buying Centerpulse would put S&N third in the £8.75bn-a-year orthopaedics market.

The Footsie edged up 4.2 points to 4141.2, bolstered by better-than-expected interims from mortgage bank Abbey National (47 1/2p up at 536 3/4p) and insurer Friends Provident (8 3/4p better at 135 3/4p).

Still unsettled by the surprise sharp drop in US consumer confidence in July, Wall Street traded a further 35 points lower as dealers nervously awaited the Fed's Beige Book report. This showed a modest pick-up in the economy since mid-June.

Sterling eased to $1.6183, while the euro traded at 70.3p and $1.1375.

Nervous selling ahead of today's interim results left mining giant Rio Tinto 36p down at 1299p.

Bumper half-year profits and a 19% hike in the dividend helped George Wimpey rise 17 1/2p to 341 1/2p and sent other housebuilders through the roof. Sentiment was also helped by news that house repossessions in the first half of 2003 fell 37% to 4,270, the lowest since 1983.

Barratt Developments jumped 26 3/4p to 484 3/4p, Bellway 19p to 645p, Persimmon 28 1/4p to 531 3/4p and Taylor Woodrow 11p to 214 1/2p. Berkeley closed 26p higher at 842 1/2p despite director Gregory Fry selling 30,000 shares at 830p.

Lara Croft computer games developer Eidos touched 136p before closing 1 1/4p dearer at 127p. It caught dealers on the hop by declaring that it will, after all, meet full-year market expectations.

Only a month ago, it warned that targets were at risk as it could not foresee whether it would ship 1m copies of its latest Lara Croft Tomb Raider game before the year- end. However, it managed to ship 500,000.

Software group XKO rose 6 1/2p to 75p after an upbeat agm. It has enjoyed a solid first quarter with results marginally ahead of expectations.

Aim-listed software minnow DCS Group, in which entrepreneur Bob Morton recently acquired a 6.8% stake from Sir Peter Rigby, jumped 3p to 17 3/4p.

Self- storage group LoknStore gained 9p at 65p after proposing a share buyback. Trading is also in line with expectations, with full-year turnover expected to be 12% higher at £5.6m.

Rumours of a large line of shares overhanging the market accompanied a 4p fall to 66p in set-top box maker Psion.

Capital Radio lost 15p further to 475p as investors continued to switch off ahead of today's RAJAR second-quarter audience figures.

TAKEOVER rumours continue to swirl around discount clothing group Matalan, 2 1/4p better at 197 3/4p. Abrasive founder and chairman John Hargreaves, who has more than 50% of the equity, is said to be fed up with the amount of criticism he has faced in recent times after the departure of not one, but two, of his high-profile chief executives. He is believed to be a seller of his stock, but at a much higher price.