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FTSE 100 ends higher

LONDON: Britain's shares closed higher on Tuesday, boosted by renewed bid speculation in Thorn EMI which helped offset a weaker tone on Wall Street.

The FTSE 100 index of leading stocks ended 10.1 points up at 3,728.5 with a 140p rise on Thorn to a new record high of 18.43 stg, contributing 3.5 points to the overall index total.

"It looks like Sony at 23 stg per share (bidding for Thorn)," said one senior trader, echoing remarks from a number of dealers. Sony declined to comment on the rumour.

Other companies such as Viacom and Time Warner, also mentioned as potential suitors made a similar response.

Thorn itself declined to comment on the rise in its stock price, saying, in common with its rumoured bidders, that it does not make statements on market talk.

Thorn is parent of EMI Music, one of the world's top five music companies. In February it said it would demerge the EMI Music business from its Thorn electronics rentals activity.

Nigel Reed, analyst at Paribas, values a bid for Thorn at over 22 stg per share. Commenting on the prospective Thorn demerger, he said "There are some out there who might be happy with both parts of the business".

Bid speculation in Thorn lent the market momentum as the weight of interest in British Telecom and Cable & Wireless' merger talks began to wane for lack of apparent progress.

BT ended 7p off at 375-1/2 and C & W finished 9p lower at 529. Earlier both France Telecom and Deutsche Telekom said they were not interested in acquiring C&W's Mercury Communications unit. The sale of Mercury is regarded as a major regulatory pre-requisite to any merger between BT and C&W.

Singapore Telecom said it was in talks with C&W but declined to give any details other than to say they were part of "normal discussions".

Singapore Telecom denied that it was about to pull out of its Worldpartners alliance with U.S. industry giant AT&T.

AT&T, rumoured as the most likely bidder for Mercury, has declined to comment on market speculation over such move.

T&N closed 4p lower at 168 but above the day's low made after news that Britain's Court of Appeal upheld a claim for damages made by victims of asbestos-induced cancer, against a former unit of T&N.

T&N said it was not a test case and that the ruling would not have significant financial effects.

Granada closed 16-1/2p higher at 777-1/2, just below a new 782p high, after Merrill Lynch repeated a strong buy recommendation on the stock, ahead of an expected trading statement next week. Merrill set a short-term target on the stock of 800p per share.-Reuter