McAlpine climbs as gossip sparks chase

TALK of an imminent 350p-a- share cash bid for

Gerald Ronson's Heron International was again mentioned as a possible bidder. It was said to have been the first bidder behind an approach three years ago for McAlpine, which later drew interest from rival Bryant and led to the eventual sale of its housebuilding division to George Wimpey for £463m.

Ronson has this year erected a 10.2% stake in housebuilder Crest Nicholson (1p dearer at 306 1/2p). But dealers reckon that could be a smokescreen and he is still interested in McAlpine.

McAlpine's management, led by chief executive Ian Grice, has spent two years restructuring the group.

It has moved into a number of quality service businesses and recently acquired AIMS, which took it into workplace compliance and the whitecollar area of facilities management. It has a strong order book and a £114m cash pile.

Selected housebuilders fell away after the likelihood of a 1/4% rise in UK interest rates to 3 3/4% next week rose after UK consumer credit for September hit a record £10.7bn, up from £9.3bn. Fearing a subsequent rise in mortgage rates, Barratt Developments shed 10p to 493 1/2p, Berkeley Group 15 1/2p to 765p and Persimmon 15p to 475p.

Interest rate concerns left the Footsie 7.2 points lower at 4265.7. It had risen 20 points in sympathy with Wall Street's overnight leap of 140 points on the Fed's decision to keep US interest rates on hold at 1%. The Fed said policy will stay 'accommodative for a considerable period'.

The Dow Jones eased 23 points early yesterday on sporadic profit-taking after weaker-than- expected third-quarter earnings from Boeing, and reports that BellSouth had called off merger discussions with AT&T.

Late transatlantic vibes that global banking group Citibank is running the slide rule over Barclays helped the UK bank touch 499p before closing 1 1/4p dearer at 493p. Many speculators caught a cold when rumoured bidder Bank of America announced its £27.8bn purchase of US rival Fleet Boston Financial.

Rexam, the former Bowater paper giant, shrugged off director Francis Labbe's resignation and closed 12 1/2p better at 404p.

Asset manager St James's Place jumped 18 1/2p to 153 1/2p after Dresdner Kleinwort Wasserstein upgraded to buy following in-line third- quarter figures and a bullish assessment of Q4 prospects. The group pulled in £34.1m worth of new business in Q3, 2% down on a year ago, but a big improvement on the 17% fall over the first six months.

Aim-listed Clipper Ventures sailed 5 1/2p higher to 19p after hearing that the State of Western Australia will be one of the sponsors of the company's Clipper 2005 Round the World Yacht Race in a £588m deal.

Telecommunications Group, the former Roxspur engineering company, began trading on Aim after acquiring Cellular Holdings. Almost 5m shares were traded and the close was 7/8p dearer at 7p.

Buying in anticipation of an imminent earnings-enhancing acquisition left in-car entertainment and communications company Armour Group 5 1/4p up at 55p.

Eckoh Technologies, the speech application service provider, firmed 1 3/4p to 17 3/4p on news of an exclusive one-year contract with Vodafone. Eckoh will host Vodafone Rapide Virtual Events using its broad range of advanced voice services. Evolution says buy.

Business services company Ambient gained 8p to 56 1/2p after announcing plans to demerge and float its Moneybox ATM subsidiary on the UK market. Meanwhile, it has bought G2, one of Moneybox's rivals.