Market report: Wednesday close

FURTHER heavy turnover was recorded in ITV merger twins

Granada rose
4 1/2p to 116 3/4p as more than 115m shares changed hands while Carlton firmed 9 1/4p to 214 1/4p on turnover of more than 43m.

US securities house Goldman Sachs has thrown its weight behind the merger, upgrading Carlton from in-line to outperform and repeating its outperform advice on Granada. Deutsche Bank also recommends Granada as a buy and has raised its target from 110p to 125p while lifting its forecast on Carlton from 200p to 230p.

Morgan Stanley has raised its target for Granada from 77p to 86p and that of Carlton from 110p to 152p. Lehman Brothers has

both from equal weight to overweight and raised its prediction for Carlton from 175p to 238p and for Granada from 110p to 130p.

Goldman sees further scope for improvement in the shares of both companies as the City begins to take into account the potential for cost savings and the new advertising sales structure. Morgan Stanley estimates annual savings of £60m from 2005.

But some big advertisers-such as drugs giant Glaxo-SmithKline, food retailer
J Sainsbury and carmaker Toyota, have concerns about the merger, and reports claim that this may prompt the Competition Commission to investigate the television advertising market.

News of bid talks at diagnostics specialist Amersham, up 89 1/2p to 641p, initially breathed life into the rest of the market. The FTSE 100 index was trimmed
3.4 points to close at 4268.6 as Wall Street opened lower.

Manchester United ran into profit-taking, falling 12 3/4p to 235p following the flurry of activity in the wake of yesterday's news that Irish gamblers JP McManus and John Magnier had spent £62m raising their stake to 23.15% after buying BSkyB's holding of almost 10%.

Now it has emerged that hedge fund Lansdowne Partners has sold a further 3.7m shares, reducing its stake from 5.17% to 3.72%. The buyer is TV producer Jon De Mol, who now owns 10.6m shares, or 4.11%. Malcolm Glazer, owner of the NFL's Tampa Bay Buccaneers, has almost doubled his stake to 5.17% since last week. United now boasts a stock market value of £643m.

Bid target Canary Wharf retreated 6 1/4p to 263 3/4p. Deutsche Asset Management has sold a further 284,504 shares at 266p, bringing the total disposed of during the past two days to onem.

Vodafone rose 1p to 124 1/2p on support from broker UBS. It has moved from neutral to buy and raised its target from 125p to 147p as part of a review of the European mobile phone industry. It remains neutral on mmO2, 2p better at 64p, but has raised its target price from 53p to 67p. UBS has repeated its buy recommendation on fashion retailer Next Group, down 10p at 1166p, after raising its target from 1350p to 1375p.

Discount retailer Matalan firmed 15 3/4p to 260 3/4p. Hopes of recovery offset news of a sharp drop in profits. Goldman Sachs has raised it from underperform to in-line while broker Beeson Gregory has lifted its target from 250p to 280p. Deutsche Bank says buy and has upgraded from 220p to 275p.