Market report: Tuesday close

THERE was further heavy turnover in takeover favourite

Turnover yesterday hit 160m shares on talk of a revised offer from Dutch rival Royal KPN after the recent breakdown in talks. KPN has denied plans to table a new offer and mmO2 says it has not received one.

US securities house Morgan Stanley has raised its 12-month target price for from 98p to 118p, saying the shares are worth that without a bid. It has repeated its equal weight rating.

Competition in the UK mobile phone market will intensify this year as 3G phone launches put pressure on prices. Meanwhile, Goldman Sachs has an in-line rating on mmO2 and describes its forecast trading range of between 105p and 108p as realistic. It says talk of a 'sweetened proposal' from KPN is underpinning the price.

The rest of the equity market came rattling down following a continuation of the overnight setback in New York, where investors continue to fret about last Friday's US employment numbers. The FTSE 100 index fell 11.8 to close at 4542.0.

ITV slipped 3 3/4p to 129p, its lowest since Carlton Communications merged with Granada last month. The shares have traded as high as 148p.

Tenanted pubs chain operator Enterprise Inns jumped 14p to 655p. It is expected to join the FTSE 100 in tomorrow's regular quarterly review. Foreign & Colonial , down 2 1/4p at 189 1/2p, may get the chop.

Housebuilder Bovis fell 6p to 534p after yesterday's profits news. Broker UBS has downgraded from buy to neutral, having seen Bovis outperform the rest of the sector.

Redrow, down 8 1/4p at 369 1/2p, said forward sales jumped 56% to £330m in the half-year to 31 December. The interim dividend is raised 20% to 3p with pre-tax profits up 10% to £56.7m.

Marketing services group Aegis sees global ad spend rising by 5.3% this year. The US election, Olympics and Euro soccer championship will account for almost half the improvement. But chief executive Doug Flynn warns growth could slow in 2005. Pre-tax profits were up 13% at £80.5m but the shares slipped 9 1/4p to 100 3/4p.

Henlys tumbled 9p to a record low of 26 1/2p after the manufacturer of America's yellow school buses put out its fourth profit warning in nine months. It has sales of £500m a year but is valued at just £20m. The directors are continuing to talk to lenders.

In-car entertainment specialist Armour slipped 1/2p to 88P, having touched 92 1/2p on news it has won a contract to supply BMW with its multimedia system for a new range of cars.

That unlikely double act of Noddy and Miss Marple led to vastly increased revenues and profits at intellectual property group Chorion, up 3p at 221 1/2p. Chairman Lord Alli reported a sevenfold rise in pre-tax profits from £400,000 to £3.1m on doubled revenues of £18.6m. But shareholders who saw the board reject another bid approach from Postman Pat rival Entertainment Rights (unchanged at 11 1/4p) last month were warned they will still have to wait for a dividend.

It was first day of trading on AIM for Australian mining group Gippsland following a placing of 25m shares by broker Hoodless Brennan at 2.8p. They traded at 3.62p.