THE City was on full private equity alert last week as barely a day passed without fresh rumours that another company may soon fall prey to buyers.
With still no word of a bid for Sainsbury, gossips turned their attention elsewhere. Shares in Cadbury Schweppes were hot after the group said it was demerging its two businesses, prompting word that Lion Capital and Blackstone are looking at its US drinks arm.
Private equity groups might also be interested in the company's confectionery arm, prompting Cadbury shares to jump 70.5p over the week, a rise of 13% to 610.5p.
Investors also took a punt on consumer products group Unilever amid speculation it may follow Cadburys' lead in breaking itself up.
Rumours focused on a potential demerger of the firm into two or three separate businesses. The stock finished up 41p, or 3%, at 1525p.
Imperial Tobacco ended nearly 5% higher on Friday, up 108p at 2330p, following its approach for Gauloise cigarettes maker Altadis. Imperial also gained from broker upgrades following the announcement of the offer, while recent rumours have suggested that British American Tobacco and buyout firm Kohlberg Kravis Roberts may get involved.
The market seemed to think at least some of the news was hot air, with the FTSE 100 closing 2.
6 points down at 6130.6.
Comet owner Kesa Electricals is expected to post healthy results for 2006 on Wednesday following an impressive Christmas trading performance which put rivals in the shade.
Analysts are forecasting pre-tax profits of £168m - 15% ahead of last year's £143.3m.
Designer clothing group Ted Baker was another winner in the run-up to Christmas and investors will be looking forward to some smart figures from the company on Wednesday.
Forecasts for the company's final results for the year to January 31 expect pre-tax profits to be 7% ahead at £19.7m. The optimism comes after the success of its winter collection which drove an 11% sales boost in the run-up to Christmas.
Investec Securities says the stock is a "key pick".
Mark Charnock at Investec said: "The Ted Baker product has performed well in what was, overall, a difficult season."
Richard Ratner, analyst at Seymour Pierce, said: "It is an aspirational brand, with an extremely wide product offering, which still has a long way to go to maturity.
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Engineering group Smiths will announce interim numbers on Thursday, its first major update since it unveiled the £2.5bn sale of its aerospace division to General Electric in February. The group has three remaining operations - detection, which provides security equipment to airports worldwide; speciality engineering; and medical businesses.
Management said last month that detection and speciality engineering had performed slightly ahead of expectations, but the medical arm, which supplies devices used during intensive care, surgery and post-operative care was behind expectations.
Peter Caldwell, analyst at Barclays, said Smiths' planned £2.1bn share buy-back would cheer investors, but added that the company needed to map out a clearer direction following the deal with GE.
Last year's 'A-Day' pension reforms simplifying regulations on saving for retirement are expected to underpin insurer Friends Provident's 2006 results on Tuesday.
The group said in January that radical changes in the pensions landscape helped drive a 31% surge in demand for life and pension policies.
Consensus forecasts for the company, which has nearly 5,000 staff, predict a £215m contribution from new business last year - well ahead of £144m the year before.
But concerns over its investment arm, F C Asset Management, have deflated profit predictions. In February F C warned it would cut its dividend level and reduce its operating margins by 30% in 2007 as it pumped more cash into the business to turn around its investment performance.
Analysts are forecasting underlying pre-tax profits of £513m, marginally down on last year's £524m.
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