Market report: Thursday close

SHARE prices were on the slide again today amid fears that one of the major props to this market was about to be taken away.

For months the London Stock Exchange has been shored up by the high level of takeover activity, much of it generated by privateequity companies.

They buy assets for a knockdown price with the aim of selling them at a profit further down the line. Low interest rates have allowed them to borrow money cheaply.

Yesterday's late news that Apax Partners had withdrawn its offer of almost 58p a share (£837m) for stores group Woolworths shocked the City and posed the question - have we seen the top of the private equity market?

Woolies is adamant there is no black hole in its accounts, and the decision to withdraw reflects problems within Apax's strategy and the gloomy outlook for the retail sector generally.

Burnt fingers meant Woolworths was the biggest faller among second-liners today, dropping 13½p, or 30% to 41½p with more than 240m shares traded.

Broker Evolution Securities has downgraded its rating on Woolies' shares from add to reduce and has cut its target price from 55p to 42p. Analyst Nick Bubb at Evolution says Apax probably decided that given the current gloomy retail climate there was 'insufficient upside'.

The rest of the market also had to contend with another abysmal performance overnight by Wall Street, where a falling oil price was not enough to offset a slump in March US retail sales. Back in London, the FTSE 100 index closed 15.4 points lower at 4,945.4.

BT Group dipped 2¾p to 200½p despite broker UBS rating it a buy with a 244p target price.

It is the turn of Deutsche Bank to run its rule over the mining sector, which has benefited from higher metal prices. It says buy Vedanta Resources, down 12p at 448p, which offers clients exposure to the fast-growing Indian economy.

Broker Credit Suisse First Boston cut its recommendation on Rank Group, down 1½p at 277½p, from hold to sell.

Europe's biggest no-frills airline Ryanair lost 15 cents at €6.05 The group has resolved its dispute with Stansted and Gatwick operator BAA Group, down 3p at 598p, over fuel levy charges.

Ryanair has been withholding £7m a quarter, which it has agreed to pay under the terms of the out-of-court settlement between the two companies. In return, BAA has agreed to drop the price it charges for aviation fuel from 68p a litre to 48p.

Yell Group, the telephone directory that trades under the name Yellow Pages and was dragged into a competition inquiry last week, hardened ¼p to 419¾p. Broker Panmure Gordon has begun coverage of the shares with a buy rating and a 465p target prices.

Highway Insurance fell 2p to 37½p following the breakdown of bid talks with rival Chaucer Holdings, 1p dearer at 53½p. The two sides announced they were in talks last month with Chaucer prepared to make an allshare offer of 44 shares for every 54 Highway.

But Highway went away and discussed the terms with its main shareholders, who subsequently indicated they would be unlikely to back the deal.

Technology and support consultant Morse fell 17p to 91p on the back of a downbeat trading update. Broker Dresdner Kleinwort Wasserstein reduced its rating from buy to hold after learning that the company's sales had fallen shy of forecasts.