EMI bid talk strikes right chord

LONG-suffering shareholders in music giant

The fact that the seller was prepared to unload the lot at a whopping 5 1/2p discount to the prevailing market price rang alarm bells.

EMI, whose bestselling artists include Kylie Minogue, Robbie Williams and the Rolling Stones, plummeted to equal its recent 10-year low of 80p.

But then and much to everyone's surprise, it rallied strongly. Speculators piled in amid vague talk of a bid approach and the close was 10 1/4p higher at 97 1/2p on hefty turnover of 55.8m.

EMI has tried to merge with AOL Time Warner's music division and with Bertelsmann in recent years. But discussions were aborted after European competition authorities made it clear they would not broker mergers between any of the big five record labels.

Declining sales of CDs and piracy have battered EMI's share price - so much so that credit rating agency Moody's has downgraded its debt to junk bond status and warned that profits were likely to decline this year and next.

Speculation has been rife too that EMI could withdraw its £60m cash bid for Boosey & Hawkes. But shares of the music publisher advanced 12 1/2p to 128 1/2p after it said the board is considering offers for the company now the sale of the instrument division is complete.

Minnow i-Touch, which provides information, entertainment and messaging services to mobile users, improved 1/2p to 16 3/4p. Evolution Beeson Gregory advised clients to buy following in-line fourth-quarter figures and an interesting Spanish acquisition.

Blue-chip stocks remained hostage to military developments in Iraq. Wall Street's overnight fall of 307 points on realisation that overthrowing Iraqi dictator Saddam Hussein will take time, prompted early weakness in London. The Footsie fell 82.9 before clawing its way back amid reports of coalition military successes on the outskirts of Baghdad to finish 18.7 better at 3762.

Wall Street retrieved a 33-point deficit to trade 82 higher in nervy morning trading.

ICI's catastrophic profits warning saw its shares crash to a 28-year low of 81 3/4p before closing 59 1/2p down at 94p. Its position in the Footsie looks in jeopardy when the FTSE committee next meets on 11 June.

Worries about trading ahead of its fourth-quarter update on April 8 left Marks & Spencer 11 1/2p down at 289 3/4p. Next shed 32 1/2p to 789 1/2p ahead of tomorrow's trading update.

Currys-to-PC World electrical retailer Dixons eased to 87p before closing 2 1/4p lower at 90 1/2p. Joint broker Schroder Salomon Smith Barney slashed its 12-month target price to 100p from 135p. It downgraded its 2003 pretax profit forecast by £5m to £295n and next year's by £30m to £300m. The broker believes high-ticket discretionary spending will be the first area hit by flagging consumer confidence.

Nervous selling ahead of today's annual figures left pick-and-mix store Woolworths 1p off at 29p. Analysts will be hanging on new management's every word about longer-term strategy. Broker Baird Equities says management has to reposition the business over the next 2-3 years to cope with changing demands.

Irish drugs company Galen rose 23p to 397 1/2p after UBS upgraded from neutral to buy and lifted its target price from 450p to 600p.

AIM-listed support services group Sherry Fitzgerald gained 24p to 107 1/2p on a bid approach from its management. Computers services group DCS fell 2 3/4p to 9p after abandoning plans to bid for BSoftB, 1 3/4p easier at 11p.

Recruitment consultancy PSD jumped 9p to 135p after chairman Peter Hearn bought 1m shares at 125p, increasing his holding to 19.2%.

Set-top box manufacturer Pace Micro Technology lost 3/4p to 27p after Amstrad boss Sir Alan Sugar denied he was interested in bidding for the company.

AFTER a slow start to the current year, broadcast equipment and services group Vislink has seen £8m of orders flood in this month. That includes £1m each from the BBC and the NYPD for its rapid deployment satellite systems. Gearing has been halved to 15%, while a pretax profit of £1.14m has replaced a loss of £0.81m in the previous year. Shares closed 1/2p off at 14 3/4p.