DFS investors sitting pretty

THERE ain't no cure for the summertime blues. Who says so? The growing number of overweight bears who believe that all City bets are off until mid-September, when fund managers return from holiday bronzed and raring to go.

True, share trading volumes are currently nothing to write home about, but historically when all seems lost, something corporate often crops up to keep wolves from the doors of struggling stockbroking firms.

Indeed, dealers heard yesterday that Lord Graham Kirkham will this week prove there is life in the retail sector after Philip Green and Marks & Spencer. The chairman and founder of sofa seller DFS is expected to raise his cash offer from 442p to 452p per share, valuing DFS at £482m.The close was 6 1/2p better at 434 1/2p.

Kirkham's opening offer to take his beloved company private was 415p per share. DFS's shareholders said thanks but no thanks. They would only consider offers over 450p. A recent House of Lords ruling that the group did not have to pay back £14.6m of VAT has finally persuaded Kirkham to up the ante.

He floated the chain in 1993 and turned it into the most successful sofa dealer in the UK. Competition in the furniture trade remains intense and DFS has recently been hit by aggressive discounting from rivals who have slashed prices to shift stock.

Rival furniture seller Homestyle, valued at £73m, held at 110p ahead of results later this month. It is up from a June low of 81 1/2p. Dealers still await confirmation that the board has rejected a £130m bid for its Bensons Beds division. Shareholders should be told. A sale of Britain's biggest beds business would leave Homestyle with the loss-making Harveys curtain chain and plenty of cash. Sold down to a low of 80 1/2p last month after largerthanexpected losses and following a reshuffle which saw the last of the majority owning Cohen family leave the board, troubled furniture retailer Courts rallied 19p to 112p. It is in the throes of agreeing a new credit facility with a syndicate of banks.

Sporadic nervous selling ahead of Thursday's interim figures left perennial takeover favourite MFI Furniture 1/2p off at 132p. Evolution's Nick Bubb says the first-half performance will be poor and expects pretax profits of £34.5m. He is reasonably comfortable with his £110m full-year pretax forecast, up from £103.8m last time.

As Wall Street traded 60 points easier at the outset on jitters ahead of Fed chairman Alan Greenspan's Humphrey Hawkins testimony to Congress today, the Footsie fell away to close 18.1 points lower at 4,321.1. David Brown, chief European economist at Bear Stearns, is relaxed.

He says: 'There seems little chance of Greenspan shaking up markets. Benign inflation data last week suggests that the Fed will keep a neutral bias on growth and inflation. He will do little to upset expectations for a 25 basis points Fed hike on August 10.'

Sentiment in the UK was not helped by news that both Premier Foods and Virgin Mobile have slashed the price of their shares for the forthcoming flotations.

Hoping to secure lucrative new orders at this week's Farnborough Airshow, BAE Systems rose 4p to 218p.

Rumours of further stakebuilding by Malcolm Glazer, the multi-millionaire owner of Tampa Bay Buccaneers, saw Manchester United touch 257 3/4p and close 6 1/2p better at 252p. Glazer sits on 19.2%. There is continuing talk that Everton's 'wonder-kid' Wayne Rooney will soon be signing for the Red Devils.

Rallying from recent depression and responding to revived takeover gossip, Iceland supermarket chain Big Food Group finished 7p higher at 93p.

Aim-listed Cambridge Mineral Resources edged 1/2p higher to 12p on talk of an imminent drilling report on its Lomero Poyatos project in Spain.

Central African Mining & Exploration hardened 0.13p to 3 1/2p. It is to widen its search in Mozambique after the award of new prospecting and exploration licences.

Oasis Healthcare gained 1 3/4p to 16 1/2p after saying that the NHS dentistry reforms announced last Friday will provide greater stability within the UK dental care sector.