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CITY traders were doing their level best to play down talk of a £40bn-plus bid for oil giant Shell, up 8 3/4p at 399 1/4p, from its smaller French rival Total.
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Reports at the weekend claimed Total was keen to take advantage of the strong oil price and the lack of confidence in Shell's management after the write-down of about 22% of the group's oil reserves earlier this year.
Shell's management is said to have conceded that the controversy over the write-down had left it vulnerable to takeover.
Bruce Evers at broker Investec Securities said: 'A bid by Total is not impossible but it is highly unlikely with too many regulatory issues to overcome.'
He is urging clients to hold on to their Shell shares. Another broker pointed out that it would have to be classed as a reverse takeover. Meanwhile, the company is continuing to buy back more of its own shares. On Friday, it bought a further 2.2m at 394p.
The rest of the market reversed opening falls in thin trading. Investors appeared to be pinning their hopes on Wall Street this afternoon where prices were expected to start higher. The FTSE 100 index rose 48.70 points to 4350.2.
J Sainsbury led the top 100 companies higher with a jump of 3/4p to 257 1/4p excited by talk that giant US retailer Target had been giving the supermarkets chain the once-over.
Aerospace supplier Meggitt firmed 2p to 217 1/2p as the rump of its recent rights issue, 3.3m shares, was placed at 215p.
International news agency and financial information systems provider Reuters slipped 9 1/2p to 298p despite bullish comments from US securities house Lehman Brothers. It continues to recommend the shares with an overweight rating.
P&O rose 9 3/4p to 233p after last week's decision to sell its La Manga golf and leisure complex in Spain. It says it wants to rid itself of fringe operations so it can concentrate on its main port and ferry activities but it will not accept less than £100m for the business.
Broker UBS has raised its recommendation on the shares from neutral to buy and lifted its target price from 240p to 260p.
Anglo-Dutch steelmaker Corus close 1 1/4p higher at 43 1/4p as broker ING cut its recommendation on the shares from buy to hold. But it has raised its 12-month target price from 40p to 46p after upping its earnings forecast for this year from 1.26p to 3.97p and for 2005 from 3.29p to 6.03p. ING says Corus is trading at a 20% premium to rival Arcelor, which is unwarranted.
Systems Union added 1p to 87 1/2p after weighing in with interim pretax profits of £1.5m, struck after a restructuring charge of £1.6m. That compares with a profit of £2m last year. The financial software systems specialist is paying an interim dividend of 1/2p and says it is confident about future income and profitability.
It's all dark clouds for conservatories maker Ultraframe. A second profits warning in three months sent the shares tumbling 35 1/4p to a all-time low of 75p, knocking £40m off its market value. Profit performance in the UK and North America was 'significantly below expectations' for July.
Full-year pre-tax profit is expected to be about £12m, against the £20m the market revised down to in May. Ultraframe blamed higher production costs and overruns in America while the UK is suffering from margin pressure on lower sales.
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