Renewed interest in Shanks

OVER the past couple of years, rumours of a possible bid for waste management group

Word is that water company Pennon ( 1/2p up at 660 1/2p) wants Shanks to complement its own waste management division, Viridor. Finance is said to be in place for a cash offer of about 140p a share, valuing the group at £327m.

Analysts have for ever spouted that either Shanks' management will improve the return on assets, or the company will make an attractive acquisition target for a water group looking to diversify from its regulated business.

Shanks' interim profits to September fell 44% to £8.2m. Increased competition and regulatory costs have hit UK profit margins, and the non-recurrence of foot-and-mouth waste-related profits took its toll.

Any bidder for Shanks will have to take on hefty debt of about £309m, which has grown as a result of its successful Dutch acquisitions for cash three years ago.

Flat Far Eastern markets overnight made for a cautious start in London. The Footsie dropped 28.7 points at the outset and closed 7.2 points lower at

4359.8. Wall Street soared ahead of today's Federal Open Market Committee Meeting, coming close to breaching the 10,000 level.

The Fed is expected to keep interest rates at a 45-year low of 1%, but could alter the language in its accompanying statement. The question is whether it drops the reference to maintaining easier monetary policy for a 'considerable period'. If it does, markets will fret about a rise early in the new year.

Fund managers Amvescap fell 23p to 372p and Schroders 24 1/2p to 661p following a report that Luxembourg watchdogs were launching a probe into trading practices.

Electrical retailer Dixons eased 3/4p to 137 1/4p and rival Comet group Kesa shed 6 1/4p to 241 3/4p on nervous selling ahead of the UK Competition Commission's long-awaited report into extended warranties, expected today.

Old gossip that the Prudential (4 3/4p easier at 454 1/4p) has finally decided to buy the remaining 20.7% of Egg it does not already own, lifted the online retail banking group 7 1/4p to 137 3/4p.

Irish racing multi-millionaires JP McManus and John Magnier are keeping up the pressure on Manchester United. They lifted their stake in the world's richest football club to 24.24% (a mammoth 63.3 million shares), from 23.15%. Man U touched 269 3/4p on the news and closed 1/2p dearer at 267p.

With US sports baron Malcolm Glazer recently increasing his holding to 14.3%, dealers are confident that a cash bid will be tabled for the club before the start of next season.

Software firm K3 Business jumped 3p to 13 1/2p after being named among eight developers to partner with Microsoft in the launch of its customer relationship management software in January 2004.

Music promotions group Mean Fiddler advanced 4 1/2p more to 34 1/4p following confirmation that chairman Vince Power has sold a 16.2% stake at 46 1/4p to Denis Desmond, Ireland's biggest music entertainment and events organiser.

Profile Media softened 0.18p to 1 1/2p following a £2.3m placing and open offer. Barclays Bank agreed to convert its remaining debt into shares. Profile expects to be cash flow positive in 2004.

William Ransom, the natural healthcare company, rose 5 1/2p to 42p. It has sold its Hitchin site for £8.575m to a national housebuilder for residential development.

Hoping to make a mint out of the ban on drivers using mobile phones in transit, Armour Group accelerated 6p to 65 1/2p. Armour is the UK leader in telemute leads, used by the main mobile networks when installing hands-free car kits.

Placed on Aim at 140p, Pixology, which makes imaging software for digital cameras, edged up to 142 1/2p. The day's other newcomer, Brazilian Diamonds, closed at 37p compared with its placing price of 34 1/2p.

JULY's hiring of 10 fund managers from SG Investments proved a masterstroke for Aim-listed Savoy Asset Management, unchanged at 130p. They have brought in funds of £425m, swelling SAM's total to an impressive £1.1bn. With £2.2m cash and first-half losses down to £773,770 from £2.13m, broker Charles Stanley expects the recovery to continue and forecasts a full-year pretax profit of £200,000.