Punters rush for MFI

AS THE market waited for billionaire retailer Philip Green to put his money where his mouth is by tabling a £9bn bid for the struggling Marks & Spencer, professional punters were keeping a close eye on

Amid intense speculation of a possible US bid or management buyout, shares of the UK's largest kitchen and bedroom retailer touched 161p before closing 7 3/4p better at 156p on hefty turnover of 27m-plus.

There was early gossip that America's Home Depot, the world's biggest home improvement group, could be interested. It recently quashed rumours that B&Q's owner Kingfisher was on its shopping list but is still believed to have the UK High Street on its radar screen. Meantime, it has expanded abroad with the purchase of House Mart of Mexico.

However, dealers got more excited by revived chatter that MFI chief executive John Hancock was to lead a buyout at 190p a share, valuing the group at £1.2bn. The plan would then be to spin off the Howden Joinery arm, which is the jewel in its crown. Broker Dresdner Kleinwort Wasserstein says it is a major profits driver and worth at least 165p a share on a stand-alone basis

Howden is the fastest growing trade outlet in the UK. Whilst MFI's retail business has suffered from worries about rising interest rates and intense competition in the furniture market, Howden recently reported a 25% jump in total sales.

Out-of-town discount retailer Matalan, never very far away from bid gossip, jumped 8 3/4p to 197 1/4p. Speculation has been rife that founder and chairman John Hargreaves recently rejected a 300p-a-share cash offer for his controlling 52% stake. Rumours yesterday suggested Wal-Mart is sniffing around.

A late fall of 33p to 1111p in GlaxoSmithKline dragged the Footsie lower. Up 39.4 points at best, it closed a fraction better at 4422.8. GSK was hit by news of a multi-million-pound lawsuit, filed by New York State attorney-general Eliot Spitzer, accusing it of 'concealing important information about the safety and efficacy of Paxil' its anti-depressant drug, when used to treat children.

Share prices have been boosted by a lower oil price ahead of today's pivotal Opec meeting in Beirut. Opec officials said they may boost output as much as possible to lower prices and Saudi Arabia said it was ready to raise daily output by up to 2m barrels.

Wall Street gained 38 points early on. Sterling softened to $1.83, while the euro improved to 66.7p and $1.22.

Cairn Energy gushed 30 1/2p to 1085p after announcing successful drilling at an appraisal well in the Mangela field in northern Rajasthan, India.

The bullish tenor of chairman Bob Holt's annual general meeting address left Mears, which provides maintenance services to the social housing sector, 5 1/2p up at an all-time high of 185p. A record order book, well in excess of £550m, has resulted in buoyant trading and full-year results will exceed current market expectations.

Shop broker Arbuthnot says buy and has upgraded its full-year pre-tax profit forecast to £7m from £6.4m and earnings per share by 5% to 8.4p.

Buying ahead of today's AGM on hopes it will announce a licensing deal in the US for its ATL-962 obesity drug lifted Alizyme 7 1/2p to 140 1/2p.

Aim-listed Cobra Biomanufacturing crashed 18p to 37p after posting a pretax loss of £1.2m at the halfway stage, compared with a profit of £0.5m. It blamed order delays, and a fall in demand for plasmid DNA.

Investment company Crown Corporation jumped 37 1/2p to 512 1/2p. It has sold multiple contracts for £190m to Lambert Financial Investment and plans to use the cash to develop prospects in the oil and gas sector.

Placed on Aim at 11p, shares of mineral exploration and development group Vane touched 13p and closed at 12 1/4p, a premium of 1 1/4p.

Luxury car dealer HR Owen reversed 1 1/2p to 204 1/2p despite veteran Jack Petchey's purchase of a further 100,000 shares via his Isle of Man company, Trefick. He now owns 5.24%.