Punters bet on Hilton merger

BIG bets were being taken on five-star corporate action developing at

Turnover swelled to £34.6m amid whispers that after a prolonged courtship, Hilton Hotels Corporation of the US is lining up a merger with the UK Hilton's hotel operations. Betting shop giant Ladbrokes would then be demerged.

Ladbrokes became the owner of all Hilton hotels outside America in 1987 when it bought the Hilton International chain, leaving control of US operations with HHC.

Friendly talks about bringing all Hilton Hotels worldwide back under one roof have have been going on for years since the two settled their bitter legal dispute over brand rights in 1995.

Matthew J Hart, the newly-appointed president and chief operating officer of HHC, is said to have persuaded UK chief executive Stephen Bollenbach that a merger would be the best way forward.

The City would welcome a demerger of Ladbrokes. The business has been going like a train in the current year helped by a long losing streak by heavyweight punters.

However, it needed chief executive Chris Bell's recent comment that 'one race per day in British racing is fixed' like a hole in the head.

Punters also flexed their muscles and sent LA Fitness up 7p to a year's peak of 213 1/2p. They responded to revived speculation that chief executive Fred Turok is to front a management buyout.

LA Fitness is one of the last remaining quoted health and fitness club operators with 66 clubs in the UK and more than 165,000 members. Last year Turok said he had no intention of following the likes of Holmes Place, Esporta, Fitness First and Cannons by going private. Never say never.

Encouraged by Wall Street's early recovery from a drop of 49 points, the Footsie rallied to finish 12.6 points better at 4435.4.

Many fund managers kept their powder dry ahead of today's crucial US employment figures for May which, if strong again, should rubberstamp a rise in US interest rates this month.

Expectations are focused on further confirmation that the recovery in US jobs continues. Economists expect to see a gain of 225,000 jobs and the unemployment rate to remain at 5.6%.

The overall mood remained cautious with Opec's smaller than expected increase in oil output failing to have an immediate cooling effect on high crude prices.

Billionaire Philip Green's £9bn bid for Marks & Spencer, comprising 290p to 310p per share in cash and 25% in a new company worth between 31p and 100p, disappointed punters who were hoping for much more cash to be put on the table.

M&S lost 10p to 356p after an early dip to 347p. Turnover was a heavy £115m.

Investors got on their bike and helped Halfords take the yellow jersey on its stock market debut.

Placed at 260p to the lower end of the 250p to 300p indicated range - shares of the bicycle-to-car accessories group freewheeled to 267p and closed at 265p, a premium of 5p.

Shire Pharmaceuticals eased 2p to 500p after Eli Lilly said Strattera, its attention deficit hyperactivity disorder treatment, has been approved for the UK market and will be available by mid- July. That is bad news for Shire's own hyperactivity treatment, Adderall XR.

Following a weighty 'sell' article on tIps.com, the investment website, investors bailed out of Aim-listed 3DM Worldwide in droves.

Shares of the company, which owns intellectual property rights to a process that converts waste plastic into a form harder but much lighter than steel, crashed to 69p before closing 20 1/2p down at 78p.

Bull breeding company Genus rose 18 1/2p to 213 1/2p after broker Lazards advised clients to buy following record profits of £8.1m, up from £5.1m, with dividends up 1p to 6.5p Private & Commercial Finance, the leasing and finance provider, improved 2 1/2p to 45p on results.

Manston airport owner Planestation edged up to 5 3/4p after shop broker Evolution placed 105.9m shares at 5.4p with various institutional investors.

BUYERS are getting excited about Aim-listed Regal Petroleum again. It gushed 14p to 374p amid growing speculation that a drilling report on its Kallirachi field off Northern Greece will confirm it to be a five-star gusher. Analysts have already guessed it could have as much as 500m barrels of recoverable oil. Dealers hope Regal could be the next Cairn Energy, up from £3 in January to £11 yesterday.