Giants set for mega-deal action

IT'S looking good. Corporate financiers on both sides of the Atlantic are working around the clock on mouthwatering multi-billion pound deals which, fingers crossed, should stand world stock markets in good stead over the coming weeks. Indeed, 2004 could be the best year for merger and acquisition activity since the heady days of the 1990s.

The year has not got off to a bad start. Mobile phone giant Vodafone( 3/4p dearer at 135 1/2p) yesterday confirmed that it is mulling a £20bn offer for US mobile operator AT&T Wireless. Across the pond, Juniper Networks announced a £2.15bn share-exchange offer for Netscreen Technologies.

Barclays Bank, which reports annual results on Thursday, gained 8p to 517p amid intense speculation it is considering a £2.2bn bid for Providian Financial, the US credit card company. HSBC firmed 15p to 864p on talk that it has GreenPoint Financial of the US on its radar screen.

Insurer Friends Provident firmed 3 3/4p to 146p following press reports of a possible £3.5bn, or 199p a share, overseas offer. Internet bank Egg cheapened 2p to 171p as dealers continued to hear that prospective buyers of Prudential's (7 3/4p better at 500p) 79% stake had walked away.

Drawing strength from Wall Street's 97-point Friday gain on hopes that the Fed will leave US interest rates on hold for a while longer, the Footsie rose 31.7 points to 4434.4. The Dow Jones eased 28 points early yesterday ahead of Fed chairman Alan Greenspan's Humphrey Hawkins testimony, which starts tomorrow.

Buyers dug in for mining stocks. Xstrata jumped 33 1/2p to 691 1/2p after HSBC upgraded to add because of the recent strength of the copper price. BHP Billiton advanced 17 3/4p to 463 1/4p following JP Morgan's upgrade to overweight from neutral - again due to higher commodity prices.

A report that former Vodafone boss Sir Christopher Gent would like to be chairman of ITV left the merged Granada and Carlton TV giant 2 1/2p better at 139p.

Break-up bid speculation helped banknote printer De La Rue rise 21p to 338p. The group has a 20% stake in Camelot, which on Friday launched EuroMillions, a lottery game that will also be played in France and Spain. The game is part of Camelot's strategy for reviving interest in the National Lottery amid flagging sales.

Already up 5 1/2p to 9 1/2p on confirmation that it is in reverse takeover talks, dealings in Aim-quoted World Trade Systems were suspended pending a further announcement.

Insurance software group Innovation, in which former Scoot.com boss Robert Bonnier has a sizable stake, firmed 1p to 39 1/4p. The company has raised £4.97m via the placing of 14.2m shares at 35p per share. Dealers said it was heavily oversubscribed.

Building material supplier Cape reflected a chart breakout with a gain of 2 1/2p at 71p. IDN Telecom buzzed up to 4.1p before closing 0.88p better at 3.85p. Results for the year to end-October 2003 will exceed market expectations.

Reflecting a recent Corporate Synergy recommendation and change of broker, software solutions provider First Derivatives jumped 12p in a restricted market to 73 1/2p.

Corvus Capital was suspended at 9 5/8p, up 3 3/8p, after confirmation it is in discussions to make a 'substantial' acquisition. An investment company is believed to be about to reverse into it.

Cobra Bio-Manufacturing crashed 43 1/2p to 101 1/2p following a shock warning that it will not achieve current market forecasts for the full year due to delays rather than cancellations in customer orders. Dealers suggested the fall was overdone.

Medical House held at 42 1/2p despite a line of 1.16m changing hands at 41p. Ten Alps Communications edged up 3/4p to 30 1/4p. Know Comment, one of its production companies, has won a BBC contract to provide live TV coverage of the four 2004 political party conferences in Scotland.

AIM-quoted diamond exploration company European Diamonds sparkled at 72p, up 6 1/2p. A party of fund managers and analysts flew to South Africa at the weekend to visit its big new mining project in Lesotho. They were apparently impressed and prospects look good. The mine could be producing up to 290,000 carats by the end of the year. It could soon attract interest from a bigger player.