Sweb, itself now owned by Southern Co of the US, had been tipped as the most likely counter-bidder. But the company said it had no intention of following a trend set by North West Water’s merger with Norweb, nor Welsh Water’s with Swalec last year “Southern has no interest in water companies. SOUTH WEST Electricity has ruled itself out as a white knight for South West Water, the subject of a hostile bid last week from its neighbour, Wessex Water, writes Paul Farrelly. Recent high-profile deals include its role as adviser to the Government on the Channel Tunnel rail link.The price depends on what is sold. Hill Samuel’s total profits were restored to pounds 64m in 1995 and net assets stood at pounds 420.6m in October 1994. But Lloyds may retain a large proportion of Hill Samuel’s corporate loan book and clients..

It will find it harder this time around,” one analyst said.Once one of the finest City names, Hill Samuel no longer boasts the corporate client base that attracted buyers prepared to pay premium prices for names such as SG Warburg, sold to Swiss Bank Corp, or Barings, where Dutch Bank ING stepped in despite the debacle of rogue trader Nick Leeson’s losses.Lloyds’ success has been firmly based in its clearing bank business, and Hill Samuel staff have already experienced a clash of cultures with Lloyds’ traditional high-street banking ethos.Hill Samuel points out it has been rebuilding its corporate finance operations, and Hugh Freedberg, its chief executive, has been credited with restoring some pride to the bank. The merchant bank has now made a significant recovery from the poor lending policies and ruinous bad debts in the recession. But the City also believes buyers for the whole of Hill Samuel will be hard to find, and the price may not be much more than pounds 100m, a fraction of what TSB paid in its ill-fated takeover of the bank during the stock market crash of 1987.”It has already marketed the business around Europe one time. However, analysts believe Lloyds faces an uphill struggle to achieve a quick sale.TSB itself tried to sell Hill Samuel some four years ago but was unable to find a buyer.

Sources close to the negotiations say Italian banks such as San Paolo di Torino, or the Spanish heavyweight Argentaria, are among those being touted as possible buyers, as well as the usual crop of German and French banks.
Phoenix Securities, which is advising Lloyds, is understood to be well advanced in marketing the business to European financial institutions. A SOUTHERN European bank could emerge as a buyer for merchant bank Hill Samuel, which is up for sale following Lloyds Bank’s takeover of TSB. The newspaper Nihon Keizai Shimbun reported a Finance Ministry official saying that “this sort of fall will probably not have a big effect on Japan”.. “I think the market today [Friday] was a prelude to nothing,” insisted David Alger of the Fred Alger Management.”It was just a knee-jerk reaction, and on Monday we will see the market going up again.”The Japanese authorities were this weekend playing down the significance of the Wall Street fall.

The decline in stocks represented barely more than 3 per cent of the market as a whole, whereas the 1987 collapse was of 22.6 per cent.Still, many US analysts speculated that Friday may have signalled the beginning of a serious correction in the market that may take it down a full 10 per cent over the next few days before buyers are able to regain the upper hand.”It was long overdue for a correction, and we’re getting it,” suggested Bill Raffert, a technical analyst at Smith Barney.Not everyone was convinced the losing streak would continue, however. That crash came on a Monday with a dramatic 508-point slide on the Dow Industrial Average; it had been presaged by a miserable Friday, which entered a loss of 108 points.Indeed, this Friday’s sell-offs of stocks was the third most dramatic in Wall Street history.Those anxious to preserve some perspective – and discourage panic – quickly noted, however, that in percentage terms, Friday was really only a blip. It was the worst single- day fall in bond prices since August 1990, when Iraq invaded Kuwait.While few analysts on Wall Street expect the crisis to repeat itself on anything like the same scale, the echoes of 1987 are uncanny. It was triggered by news of much stronger than expected February jobs figures – virtually ruling out any further cuts in US interest rates for the next few months.”People are in something of a shock,” remarked James Solloway, research director at the US consultancy Argus Research, after the close of markets on Friday.The US bond market fared even worse, with the price of the benchmark 30-year Treasury bonds down a stunning 33/32 and the yield up from 6.46 per cent on Thursday’s close to 6.72 per cent. Most of the fall on Wall Street came after London markets closed.

The 171.24 collapse in the Dow Jones Industrial Average to 5,470.45 left Wall Street reeling. It is all driven by the US bond market, which seems to be in a state of funk.”The FT-SE 100 fell 47.9 points to 3,710.3 on Friday, despite the positive news of a quarter-point cut in base rates. STOCK and bond markets around the world are braced for a wave of selling and price markdowns tomorrow after Wall Street’s spectacular 171-point plunge on Friday. The worst of the US nosedive came late on Friday evening, long after markets closed in London, creating the prospect of a sharp fall as dealers elsewhere in the world scramble to catch up.
The Far East will be tested first. Speaking from Tokyo, Gerard Lyons, chief economist with the Japanese bank DKB International, said: “Undoubtedly the bond market here and the equity market to a lesser extent will be badly hit by the fall on Wall Street.”He said there was “a lot of negative sentiment around”, although he believed fears in Japan of a rise in interest rates were misplaced.In London, the FT-SE 100 index of leading shares could initially fall by more than 100 points, market watchers suggested. Patrick Foley, chief economist at Lloyds TSB, said: “I wouldn’t be surprised if the Footsie fell by 2 to 3 per cent first thing, and perhaps ended the day 1 per cent down, but that really is gazing into a crystal ball.”Ian Harwood, head of strategy at Kleinwort Benson Securities, said: “Obviously markets worldwide are going to be intensely nervous on Monday.