Prudential may take Egg off the menu

SOMETHING could be cooking at

Punters scrambled for stock on hearing that Pru is on the verge of selling all, or part, of its 79.3% stake in online banking services group Egg, 3 3/4p better at 129 3/4p. They hope confirmation could come with the group's interim results later this month.

Rumours were rife earlier this year that Prudential had been approached by American credit card giant MBNA to name a price for its Egg holding, currently worth nearly £700m.

Prudential's balance sheet had taken a pounding from the relentless bear market and dealers were confident it would be a forced seller.

Not so. Prudential has held on to its stake, but is said to have reviewed the situation in recent weeks and come to the conclusion that it would a good strategic move to sell its holding down, or part with it all.

It could sell the lot at a premium for about £900m-plus. A partial sale could net between £350m and £450m.

Other insurers were helped by positive noises from US broker Morgan Stanley. Aviva advanced 18 1/4p to 446 3/4p, Friends Provident 5 1/4p to 120 3/4p and Legal & General 2 1/2p to 88p.

Wall Street's impressive 190-point return from Friday's Independence Day holiday came as no real surprise after markets in the Far East performed well overnight. Not to be left behind, the Footsie closed 53.3 points up at 4074.8.

Expectations are now skyscraper high that short-term corporate earnings are rising. Dealers expect the forthcoming second-quarter earnings season will provide concrete evidence that these hopes are justified.

An Ernst & Young survey, which showed the number of UK companies issuing profit warnings in the second quarter were the lowest since records began five years ago, made pleasant reading too.

Sterling eased to $1.6502 with the euro lower at 68.7p and $1.1337.

Software group Sage rose 12 1/2p to 178 3/4p amid vague takeover gossip and reports of a pending broker circular. Telecoms equipment group Spirent buzzed 3p higher to 26 3/4p after Lehman Bros upgraded to overweight with a price target of 36p.

Drugs giant Astra Zeneca jumped 66p more to 2554p on continuing hopes that the US Food & Drug Administration will give Crestor, its cholesterol-lowering drug, the green light tomorrow to go on sale in the world's biggest market.

Responding to its view that pretax profits for the six months to end-June will beat analysts' forecasts, payment fraud prevention software supplier Retail Decisions rose 1 3/4p to 77/8p.

Aim-listed media group Metrodome firmed 1 1/4p to 45/8p after reducing operating losses by almost 70%. It now has the rights to more than 1,900 episodes of children's TV classics including Transformers, My Little Pony and GI Joe.

Milestone edged up 1/2p to 85p on winning its first TV licence - a local channel in Reading - since flotation. Integrated Asset Management advanced 4 1/2p to 52p after buying Appleton International, a specialist investment boutique, for £1.5m cash. Savoy Asset Management gained 5p to 105p on its purchase of Dorsetbased Barnes & Hedgecock, a firm of independent financial advisers with £44m of funds under management.

After signing a joint venture agreement with Longtoushan Company of China, gold explorer Caledon Resources edged up 0.37p to 4.37p. It plans to expand its operation in the Guangxi province and have a major impact on gold exploration in the region.

Provalis improved 1p to 9 1/4p on an upbeat trading statement that persuaded broker Seymour Pierce to upgrade from hold to speculative buy.

Tikit Group, the software minnow, rose 7p to 89 1/2p after first-half sales and profits were ahead of budget expectations. Charles Stanley becomes broker.

THE worst looks over for software group Planit, 1/2p easier at 23 1/2p. After major cost-cutting and restructuring, the firm now concentrates on providing computer-aided design and manufacturing solutions for the engineering industry. Analysts forecast a return to the black and pretax profits this year of £3.8m, up from a £571,000 loss.