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Market Watch


A HECTIC week of corporate action sent investors scurrying out looking for other potential bid targets and provided a boost for the entire construct ion sector last week.

Glassmaker Pilkington topped the leaderboard after Japanese rival Nippon Sheet Glass made a bid of 150p that was rejected, although the St Helens-based firm is expected to take an offer of 165p, which would value the company at £2.2 billion.

The identity of the suitor for Mowlem is not yet clear although some sources suggest that Carillion ? up 15.25p to 276p last week ? could be the mystery bidder instead of a major overseas contractor, as originally tipped.

The talk in the Square Mile last week was of a £2.25 per share bid for Mowlem, which is well ahead of the level that the shares closed last week at 182.5p ? up 9.5p.

One analyst said: 'If the board got that price, it would be a tremendous deal for the shareholders.

'The problem is that Mowlem has a pension fund deficit, which is being revalued by actuaries right now.

'That debt could come out at £100 million and any bidder could have to settle that on top of the £2.25 per share bid for the company.' With structural steelwork specialist Severfield-Rowen informing the market that trading was 'significantly ahead of current market expectations' and that the firm's order book had hit £163 million, this generated further confidence in the sector.

Out of the 104 shares on the Construction News index, 83 rose last week. Just 10 fell and the rest were static.