Traders fill up on Safeway bid talk

A MOUTH-WATERING tale that Carrefour is lining up a £3.6bn offer for Safeway had punters gorging themselves on Britain's fourth-biggest supermarket group. Even an early denial from the French hypermarket giant failed to suppress enthusiasm for the stock. It closed 13p higher at 304p on turnover of 18.7m.

Analysts pooh-poohed the idea. WestLB Panmure's Philip Dorgan said: 'Carrefour has far too many problems of its own. Its dire share price performance certainly rules out a paper bid because it would have to offer £4-plus-a- share to stand any chance of success.'

But he added: 'Purely on fundamentals, Safeway looks dirt cheap. Prospects are good and results on 15 May will prove that sales are improving.'

Traders reckon Safeway remains vulnerable and is losing market share to Sainsbury. They believe another predator is sniffing around or Safeway could even be looking to go on the acquisition trail itself. Rumours were rife a month or so ago that it was about to climb into bed with William Morrison, 5p better at 220 1/2p.

Convenience store Budgens firmed 1 1/2p to 112p after an upbeat trading statement. Sales for the 52 weeks to 28 April rose 8.4% and like-for-like sales contributed 5.1%. Analysts will visit several stores around London today. Musgrave, Ireland's largest wholesale food distributor, has 28% of Budgens and £30m of its convertible loan stock, bought from German food distributor Rewe 20 months ago. It paid 89p each for its initial 47.8m shares and is looking at a tasty profit. Trade sources suggest it will not be long before it bids about 140p a share for the balance.

Better-than-expected first-quarter profits from oil giant BP (16 1/2p up at 585 1/2p) and first-half figures at the top end of analysts' expectations from accounting software group Sage (9 3/4p dearer at 198p) put the market in a better mood. The FTSE 100 retrieved an early 22-point deficit to finish 11.7 higher at 5165.6. Dealers were relieved to see the recently-sick Dow Jones surge points after April's consumer confidence index and the Chicago business activity report came in slightly better than expected.

Currys-to-% World electronics retailer Dixons rose 6 3/4p to 227 1/4p on a JP Morgan recommendation. Matalan rose 7 3/4p to 350 3/4p in anticipation of today's results.

Aim-listed women's fashion group Jacques Vert climbed 1 3/4p to 12 1/2p. Trading since early February has remained in line with expectations. Total sales for the half-year to 27 April were up 17.6% on last year, with like-for-like sales up 16%. Cavendish Asset Management has been mopping up stock of late.

Drugs giant AstraZeneca was in need of a tonic at 3215p, down 104p. Selling was sparked by news that the US Food and Drug Administration has approved an extension of the labelling of Liptor, Pfizer's cholesterol drug, to expand the range of starting doses from 10mg to 20mg and 40mg. This raised fears it will make it harder for AZ's Crestor, which has still not been launched, to make inroads into the American market.

Detica, the first technology company to float for more than a year, got off to an uninspiring start. Issued at 400p, the shares touched 410p and closed at 391 1/2p for a discount of 8 1/2p. But dealers expect Vantis - a professional services company formed out of four accountancy practices - to trade well above the 90p placing price when it makes its debut today.

Information technology consultant ECsoft crashed 177 1/2p to 325p after warning of operating losses for the first half of 2002 of between £3.5m and £4m because of deteriorating market conditions.

Soundtracs, the sounds equipment maker in which entrepreneur Bob Morton has a stake, jumped 4p to 23 1/2p after putting itself up for sale. Mountcashel improved 1 1/2p to 67 1/2p after confirming bid talks with Corporate Synergy, 1p better at 8 1/2p.

Depressed by director selling, Torex bounced 30p to 731 1/2p after an upbeat annual general meeting. It has made an excellent start to the year and all divisions are trading in line with budget for the first quarter. A placing by Brewin Dolphin of 4m shares at 40p left Medical Marketing 1/2p better at 41p.