Lonmin shines on bid speculation

LONMIN, the world's third-biggest producer of platinum, borne out of the late Tiny Rowland's empire, gave a sparkling performance as bid speculation gripped the mining sector.

It soared 113 1/2p to 845p on hefty turnover of 7.2m share, amid gossip that it has agreed to sell its valuable 28% stake in Ashanti to Anglo American. Mining giant Anglo is believed to be lining up a full- scale offer for the Ghana-based gold miner.

Another story suggested Lonmin was in merger talks with Impala Platinum (Implats), the world's second-largest platinum producer. Implats finance director David Brown denied the story, suggesting it was just a revival of an ancient rumour, but punters continued to dig deep for stock.

In the early 1990s, Implats planned to merge with Lonrho Platinum, now part of Lonmin, but the deal was blocked on competition grounds. Implats now appears to have other things on its mind. Shareholders in South African group Gencor recently approved the long-awaited unbundling of its 46% stake in Implats. Gencor will distribute its 30.6m shares, worth about £993m, on 23 May.

Lonmin recently touched a low of 661p, which reflected a sharp drop in the platinum price. After reaching a 23-year high of $707 an ounce in February, it collapsed as speculative investor interest in the metal waned.

Elsewhere, all eyes were on the retail sector following Canadian billionaire Galen Weston's agreed £598m bid for Selfridges (42 1/2p up at 398p). Private equity firm Permira's indicative £1.5bn offer for rival department store Debenhams pushed it 78 1/2p higher at 409 1/4p.

It set the High Street alight. Speculators went shopping for other perceived takeover targets. Hopes that Scottish entrepreneur Tom Hunter will turn his attentions back to House of Fraser left it 1 1/2p better at 92p. Mothercare rose 9 1/2p to 139 1/2p and Woolworths 2 1/2p to 36p.

Menswear group Moss Bros firmed 1 1/4p more to 45p. Joe Bloggs entrepreneur Shami Ahmed owns 9.1%, and Kevin Stanford, co-founder of the Karen Millen fashion chain, 9.14%. Stanford has requested a meeting with Moss Bros boss Adrian Wright. Interesting.

Other notable risers included Dixons, 6 1/4p up at 120 1/2p, GUS, 18 1/4p dearer at 608 1/4p, Boots, 17p higher at 606p and WH Smith 26 3/4p to the good at 343 3/4p.

Drawing strength from Wall Street's impressive early rally, the FTSE 100 perked up to finish 18 points better at 3987.4.

Somerfield, the struggling supermarket group, gained 2 1/2p to 101 1/2p on turnover of 7.6m shares. Buyers filled their trolleys with stock, amid talk of an increased 120p-a-share cash offer from John Lovering and Bob Mackenzie.

ITV giants Granada eased 3/4p to 67 1/2p and Carlton Communications 4p to 99 1/2p. Lehman Bros warned that the risk of their proposed merger not happening outweighs the current valuation upside. The broker expects flat first-half advertising income for both companies and forecasts full year 2003 growth of minus 2%.

Rumours of a bid approach helped pub group Yates froth 12p higher to 84 1/2p. AIM-listed oil and gas explorer Petrel Resources gushed 4 1/4p to 11p. The company, which is working to secure licences to explore and develop oil fields in Iraq, has no immediate plans for a fundraising.

Reflecting a recent Collins Stewart recommendation and director buying, security and communications systems provider Screen buzzed 3 1/4p higher to 15p.

Smallpox vaccine maker Acambis jumped 16 1/2p to 329p. UBS Warburg upgraded it to 'buy' and raised its target price to 290p from 250p following last week's upbeat quarterly figures.

Systems Integrated Research soared 4p to 9 1/2p. Durham County Council accepted its tender to supply an open integrated learning system for secondary, primary and special needs schools.

Celebrating Chelsea FC's entrance into next season's European Champions League, Chelsea Village improved 1 1/2p to 23 1/2p. Oxus Mining raced 2 1/2p higher to 17p after the Kyrgyzstan government renewed a licence to develop a gold deposit in the Talas Region of the country.