Yell surges on talk: But is it a takeover or is it a disposal?

The mutter from the gutter was that a suitor is lining up a bid at 30p a pop for debt-laden Yellow Pages publisher, Yell. Whispers named private equity as the possible predator.

The rumour pushed Yell to the top of the FTSE 250 leaders board, with its shares surging 1.5p to 17.2p as almost 15million changed hands by 11.30am - more than are normally traded in a whole day .

But some traders weren't buying the yarn. "It's got too much debt. I think this is just a story to puff them up," said one. Another dealer added: "There are some punters snapping them up today but I think that's just because it has been oversold."

An alternative story was that Yell is looking at a disposal to cut its debt.

On the top flight, software group Autonomy claimed pole position, climbing 81p to 1712p. Bid chatter started yesterday afternoon, with Oracle and Microsoft being mooted as potential suitors. Talk had a bid at a stonking 2500p but today traders thought even that wasn't going to be enough to persuade Autonomy's bosses.

"People are saying that [chief executive] Mike Lynch is not going to accept anything less than £30," said one, adding: "Those shorting Autonomy are getting burnt."

Another trader said: "Autonomy has been signing contract after contract recently. I reckon that it would have to be more like £35."

Tintin Stormont, the wonderfully named analyst at Singer Capital Markets, was somewhat sceptical: "If there was a bid forthcoming, it's more likely to be Oracle than Microsoft. But in terms of timing, the reasons for buying Autonomy now for Oracle held true last year and the year before that."

Shares in London yoyo-ed between the red and the black after their mega-rally yesterday. The FTSE 100 was up 5.91 points at 5372.32. BAE Systems put on 8p to 310p. The weapons maker has won a contract with the US army to upgrade armoured vehicles to protect soldiers from roadside bombs.

ARM Holdings claimed the Footsie's wooden spoon, sinking 15p to 358.8p, as analysts warned that demand for chips may be falling.

Panmure Gordon reiterated its sell rating and trimmed its price target from 275p to 265p. "Our recent conversations with semiconductor industry participants suggest that a weakening macro economy and increased nervousness has caused softness in demand for chips for consumer electronics in recent weeks," said analyst Nick James. "The stock looks over-extended and vulnerable to downgrades."

He also argued a bid - Intel and even Apple have been mentioned as potential suitors - was unlikely "given both strategic and valuation considerations".

On the mid-tier, McBride shot up 12p to 153p after posting record profits for the year. The maker of own-label household and personal care products for retailers posted pre-tax profits of £29.6million, up a third, on the back of sales 2% higher at £812.2 million.

Crisis-hit social-housing provider Connaught, soon to be relegated from the FTSE 250, clawed back a little of its mega-losses, up 1p to 19p.