Investors hope for bidding war after rumours of Jardine Lloyd Thompson takeover

Shares in the FTSE 250-listed insurance broker shot up 21p to 602p as whispers spread across the Square Mile and Canary Wharf that it has attracted the attentions of an admirer, prepared to cough up 800p-a-pop.

This would value JLT at a stonking £1.7 billion.
The word on the grapevine is that the interested party could be US giant Marsh & McLennan.

But shareholders will hope a bidding war could break out for JLT, amid speculation Aon may also take a look.

Investors were keen on the idea, with 461,225 shares changing hands by 10.30am, compared with a daily average of 220,000 in the last month.

The FTSE 100 index reversed early losses, to post a gain of 4.67 points to 5708.56 as mining stocks helped the benchmark higher.

Artificial joint maker Smith & Nephew was the benchmark's best-performer, up 15½p to 566p, thanks to better-than-expected results from US peer Stryker.

S&N is a favourite of the rumour-mongers so the big rise also sparked speculation a predator could be set to pounce on the company.

BG Group was one of the Footsie's biggest losers as investors turned jittery over its Australian coal seam projects.

It is expected to win environmental approval on Friday, but doubts about it getting the immediate thumbs-up arose after Origin Energy discovered traces of carcinogenic toxins in exploratory wells in Queensland.

BG has no involvement in Origin's projects, but traders warned that any delay to the oil explorer getting the green light could disappoint the market and eat into growth.

However, Macquarie analyst Adrian Wood said: "The fact that this stuff has been found gives ammunition to the people who want to stop coal seam gas (but) it's been blown out of proportion. It shouldn't be sending shock waves across the coal seam gas industry."

BG's shares dropped 26½p to 1160p. Whispers last week put the oil explorer on the shopping list of the Chinese, despite cynicism from some of the City's cooler heads.

If rumour is to be believed elsewhere, Manganese Bronze's suitor is as good at doing U-turns as the firm's taxis.

The black cabs group was one of the day's stand-out stocks, surging 6¼p to 37.5p, on talk that Geely, which already owns a fifth of its shares, is set to return with a new offer. Geely walked away from a move to take control of Manganese through a placing and cash injection in August.

Struggling clubs owner Luminar ticked up ¼p to 13p on optimism that bosses might be able to reassure investors at tomorrow's first-half results.

Back on the top flight, three big names trading without rights to their recent dividends were among those filling up the loser board.

BAE Systems, sold off yesterday on fears about the Government's defence spending review and after US peer Lockheed Martin warned of contract delays and cancellations, took the wooden spoon. Its shares fell 11.3p to 352.6p, while Smiths Group lost 15p to 1224p and BSkyB sank 7½p to 698p.