Market report: Wednesday close

OFFICE rental group

Word is the group has reached agreement with its American creditors, who are owed money on onerous long-term leases, which involves a debt-for-equity swap.

A further share placing at up to 30p to raise around £40m is also reckoned to be under way for the loss-making group.

Some sources claim institutions have already taken up the issue. This has resulted in a two-way pull, with bears such as Evil Knievil, aka Simon Cawkwell, who is reported to have shorted nine million shares in the company, hoping to drive the price lower.

He is opposed by backers of chief executive Mark Dixon, the former hot dog seller who brought the company to market three years ago, and continues to hold a 62% stake. They have been driving the price higher by taking out spread bets and contracts for difference with bookie Cantor Fitzgerald which now accounts for 115 million shares, or almost 20%.

At its peak, Regus reached 392p where it was valued at almost £1.5bn. It slumped to a low of 4p last year - just before the US subsidiary went into Chapter 11. Regus now has a price tag of less than £200m.

Share prices generally traded in a narrow band despite the Bank of England indicating further interest rate rises. The FTSE 100 index finished up 26.1 points at 4371.2.

Anglo-Dutch steelmaker Corus is seen as a recovery play by institutional investors. They chased the price 6p higher to 32p with 500m shares changing hands after it announced plans to raise £307m by way of a placing and open offer of five new shares for every 12 held. The 1.3bn new shares will be offered at around 23 1/2p, considerably higher than the 15p-17p first mooted.

The troubled group wants the money to strengthen its balance sheet and fund more restructuring. Two lines of stock totalling 20.5m shares went through at 31 1/2p. Several other large parcels of shares were also spotted. Brokers say the institutions are snapping up stock, knowing it will allow them to take up more of the new discounted shares.

Ryanair fell 25 cents to e6.57. Early indications point to the European Commission ruling against Belgian airport Charleroi paying the discount airline to operate from there. This could hit 20% of the airports Ryanair flies to.

International Power fell 3/4p to 115 1/4p in response to yesterday's profits warning. US securities house Morgan Stanley has cut its 12-month target from 150p to 125p.

Broker Numis has been waxing lyrical about music retailer HMV, 2p better at 170p, after a visit to the firm yesterday. Retail analyst Rachel Wearing at Numis said: 'We have great confidence for HMV going into the Christmas trading period. The DVD market is supported by a strong release pipeline which includes the Indiana Jones box set, The Office Series 2 and Terminator 3.' She rates the shares a buy with a 200p target.

Computer services group Xansa fell 8p to 99 1/4p despite broker UBS repeating its buy rating and raising its target 10p to 145p. Shire Pharmaceuticals rose 6p to 481p after US securities house Smith Barney removed the shares from its sell list.