ARM Holdings rocketing on revived buzz of an Apple bid

The Cambridge-based chipmaker advanced 38p to 315p as the reheated rumours, which did the rounds in the City in April, suggested the iPad maker is plotting a bid.

But some traders remained scathing. One said: "It would make no sense for Apple to be interested in ARM.

"It researches and designs the chips, and the reason their business model is so good is that they have lower costs. Why would Apple want to buy its own research arm, when the whole reason ARM works so well is its economies of scale because it sells chips to lots of companies? If Apple did buy ARM, there could be competition problems too."

He added that the shares, because of the bid speculation, look "expensive", another reason Apple would be put off.

Another trader said: "If someone wants to buy ARM, I doubt it would be Apple."

A spokesman from ARM said that the company had not received an approach and agreed that a takeover from Apple would not make sense.

The gains came despite "sell" advice from Liberum Capital, which says the shares have a "fair value" of 190p and warns Intel is likely to make "inroads into ARM's territory".

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ARM wasn't the only Footsie company attracting takeover talk.

Mexican silver miner Fresnillo climbed 24½p to 1007p following big gains yesterday on rumours, reheated from May, that it is on the shopping list of Carlos Slim. The world's richest man is said to be keen on moving into the metals sector.

Other traders reckon the company is more likely to win the attentions of one of the titans of metal, such as BHP Billiton, 26½p better at 1844p.

Shares in London posted modest gains for a second day after a rally on Wall Street last night. The FTSE 100 index added 23.34 points to 5109.20 as mining shares helped the benchmark higher.

However, for yet another day, BP was a drag on the FTSE 100. The crisis-struck oil giant's shares plunged on opening, briefly trading at a 13-year low. They recovered slightly, to trade down 21.1p at 370.3p, still at their lowest since January 2003. The shares were heavily sold off in the US overnight, but BP protested the sell-off was unjustified.

But Home Retail Group topped the Footsie loser list, off 10.8p at 227.2p, after the retailer reported a slump in sales. The gloomy news from the owner of Argos and Homebase hit some of its high street rivals.

Game Group's shares sank 4.1p to 86p as Home Retail's figures showed the video gaming market was very tough. Meanwhile, entertainment retailer HMV, which found out last night it will be booted out of the mid-tier, lost 0.8p to 52.9p.

Other companies chucked out include Trinity Mirror, whose shares fell 5.4p to 81p, making them the worst performer on the FTSE 250. The two companies falling out of the top flight also lost ground, with Thomas Cook down 0.3p at 195.2p and London Stock Exchange down 1p at 593p. Demotion from the indices prompts selling by tracker funds.

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