The transaction, intended for completion in January, could well end up being delayed.Directors at the newly floated HHG, up 2.25p at 40.5p, clamoured to buy into the stock. HHG was demerged from AMP, Australia’s biggest life insurance company, and made its debut in London on Tuesday. In total, four directors bought a total of 550,000 shares at 37p.There was another day of brisk trading in Innovation Group, down 0.75p at“ 26.75p. The insurance software provider has certainly been a popular choice over the past month as Robert Bonnier, the former Scoot boss, and GAM London, the fund manager, have built substantial stakes.Mr Bonnier is fresh from the success of his investment in Regus, the office space group, which has been one of the market’s best performers over the past year. The problem that B&B faces is that it is simply too small to compete with the likes of Barclays and Lloyds. And given that the bid protection B&B enjoyed after its conversion from building society to bank has recently expired, a move on the group from a rival could soon materialise.In the drinks sector, last year saw a significant amount of takeover speculation surround Allied Domecq, and this looks set to continue into 2004. It has long been whispered that Shell is mulling a bid for the oil and gas explorer Shell certainly has the firepower for such a deal.

It is nearly four times the size of BG and by now will have certainly finished digesting its 2002 acquisition of Enterprise Oil.Other FTSE 100 takeover favourites are the insurer Legal & General, down 0.25p to 97.5p, and banking minnow Bradford & Bingley, up 0.75p to 303p. Christmas Eve is pretty much the quietest day of the year in the Square Mile, not helped by the fact that the market is open for just half a day.
So which companies are least likely to make it through to the end of next year as independent entities? At the top of traders’ lists is BG Group, 0.5p lower at 286p. But while the cost of a home rose by 33 per cent in the North, 24 per cent in Yorkshire and Humberside and 20 per cent in the North-west, growth was more subdued in southern regions. The South-east and South-west reported rises of just 6 per cent, while the market was not much better in London, with prices increasing by only 8 per cent.The year was also characterised by a fall in the number of properties being sold, and there was also a dramatic drop in the number of first-time buyers entering the market.Sales completed during the year fell to about 1.4 million, down from 1.6 million the previous year, while the number of people taking their first step on to the property ladder dropped to 360,000 from 521,000 in 2002, as steep price rises put homeownership out of reach for many.. In the absence of any major corporate or economic news, traders were left to gossip about which companies they believe are most likely to be bid for in 2004 One can’t blame them.

“Maybe not to the same extent, but it’s certain the astute landlord who understands the dynamics of the private rental business will continue to benefit from attractive returns over the long term.”The Nationwide and Halifax, the main lenders, are predicting growth in house prices of 8-9 per cent in 2004. The Royal Institution of Chartered Surveyors forecasts a slowdown to 6 per cent growth next year, while FPD Savills, the estate agents, predicts a rise of just 4 per cent.The housing market had a year of mixed fortunes during 2003, as growth soared in the north of the country but stagnated in the south.Halifax and Nationwide both said prices rose 15 per cent during the year, although this was well down on the 25 per cent jump seen in 2002. “All this means that the private rental sector will continue to be buoyant.”Landlords netted a total return of more than 25 per cent on an average property bought at the end of 2003 – much more than any other asset in 2003 “Will this be repeated in 2000?” asked Mr Heron. However, he hedged his bets saying dwindling numbers of first-time buyers, falling consumer confidence, rising mortgage costs and rises in stamp duty could drive the annual growth rate as low as 5 per cent by mid-2004.Capital Economics, the consultancy headed by Roger Bootle, forecasts prices will start falling this year, wiping 20 per cent off values over the next three years.Paragon Mortgages, a leading buy-to-let mortgage lender, expects the private rental market to enjoy another year of growth following high rewards in 2003. Therefore, by receiving a royalty stream and milestones, this is no longer a concern.”Jonathan Senior of Evolution Beeson Gregory said: “CAT can still make money further down the line, but any products are eight to ten years away, and this means they can spend money on new products that are further through development.”CAT has cash resources of around £100m and had a cash outflow in the year to September of £34m.CAT is planning to license in new drugs as it tries to find a course to profitability by its promised date of 2008. The company’s shares, though, have missed out on the biotech rally this year, as investors remain sceptical.The problem has become particularly acute because Abbott, the US pharmaceuticals giant which has launched a rheumatoid arthritis drug based on CAT technology, wants to cut the level of royalties it pays to CAT for the product and for five others the pair are developing The dispute is headed for the High Court..

Charles Dunstone and David Ross, founders of the Carphone Warehouse retail chain, are giving 5 million shares to their senior employees as part of a new incentive scheme. However, the company said different managers would get different-sized gifts.The company has also put in place a new three-year share option scheme for its 500 store managers.The 5 million shares being given away are conditional on the recipients being employed by the company on 1 October 2006. Although the gift of shares will create an income tax liability, the company has agreed to lend managers the money to deal with the tax bill when it arises.A spokesman said: “When the company floated in 2000 everybody got shares through the company’s save as you earn scheme. People have grown up with their jobs and rather than at the top level doing something with share options, the company decided to just give people shares.”Mr Dunstone, the chief executive of Carphone Warehouse, is contributing 2.5 million shares Mr Ross, the deputy chairman, is giving away 1.75 million.