London afternoon: Bid talk spices up dull day

Leading shares are still lacking direction, a condition matched in the US where shares are expected to open mixed. High-flying computer chip designer ARM Holdings is flying a little lower today after Panmure Gordon reiterated its "sell" recommendation and cut its price target for the stock to 265p from 275p. "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," the broker said, adding that consensus estimates look "aggressive" and therefore the stock "looks vulnerable to downgrades to consensus".Tullow Oil is another high profile faller. The company is to buy half-shares in five licences in the East African rift basins of Kenya and Ethiopia. Africa Oil Corp has sold Tullow 50% stakes in blocks 10BB, 10A, 12A and 13T in Kenya and the South Omo block in Ethiopia, an area covering 97,000 square kilometres.Bid speculation is driving the share price of "meaning based computing" company Autonomy higher with acquisition-hungry US software giants Microsoft and Oracle in the frame as likely bidders at a price north of 2500p per share.Takeover talk is also behind the sharp rise in the price of Yellow Pages publisher Yell Group, which is said to be in the sights of private equity groups.Scottish and Southern Electric is lower after being named in a mis-selling probe by regulator Ofgem. Three other big electricity suppliers are also under investigation - EDF, Scottish Power and nPower. The two other major suppliers British Gas, owned by Centrica, and E.ON are not involved.In company news, AstraZeneca has received approval from the European Commission (EC) for its schizophrenia and bipolar drug Seroquel XR as an add-on treatment for major depressive episodes where antidepressants haven't worked.Xstrata Zinc's proposed acquisition of Toronto-listed Noranda Income Fund has fallen through after the pair were unable to agree a price. Madrid-based Xstrata Zinc had increased its offer for the fund to C$3.90 for every priority unit, worth $146.3m (£90.2m), up from an initial offer of $3.40, or $127.5m.Royal Bank of Scotland is cutting another 3,500 UK jobs as it trims its back office operations, taking the number of staff axed since the bank was nationalised two years ago to 26,600. The staff cuts are part of a programme that aims to deliver annual savings of £2.5bn.Britain's largest supermarket Tesco is one of ten bidders battling it out to win the Southeast Asian business of French supermarket chain Carrefour. Up for grabs are 61 stores in Malaysia , Singapore and Thailand worth an estimated £650m.In the FTSE 250, McBride, which supplies household products for supermarkets to sell under their own names, is going well after it shrugged off the challenge from promotions of branded products to post a sharp rise in profits in the year to June 30 as shoppers continued seeking the cheapest items. The maker of washing-up liquid, shaving foam and many other products saw pre-tax profits before exceptional items rise to £42.4m from £29.6m on revenues that rose to £812.2m from £792.4m.Investors also have an appetite for Restaurant Group. The company, which operates the Chiquito and Frankie and Benny's chains mostly seen in out of town shopping centres and cinemas, posted a rise in profits and revenues in the 27 weeks to 4 July despite tough economic conditions. It saw adjusted pre-tax profits rise to £24.6m from £21.7m over a comparable period the previous year as revenues rose to £229m from £210m.Global recruitment firm Hays is another strong performer. It saw a return to growth in the second half of its financial year, which softened the blow of a 53% slide in pre-tax profits. Profit before tax and exceptional items in the year to 30 June tumbled to £71.1m from £151m the year before, beating market expectations. Broker Charles Stanley's above consensus forecast had been for a figure of £70m. Rail and bus company Go-Ahead is cautious on the economic outlook and the prospect of government spending cuts after reporting a fall in profits in the year to July 3 amid tough conditions. The operator of the Southern, Southeastern and Gatwick Express rail franchises and bus operations in cities such as Plymouth and Oxford, saw revenues edge up to £2.20bn from £2.19bn the previous year, but pre-tax profits, though down to £88.7m from £117.3m last year, were ahead of expectations. DSG International, soon to become Dixons Retail, bumped up both total group revenue and like for like sales by 3% in the first quarter as shoppers responded well to Apple's iPad and the electrical retailer's World Cup promotion. The Currys and PC World owner grew like for like sales by 6% in the UK & Ireland during the 12 weeks ended 24 July. Televisions were in demand in the run up to July's premier football tournament.Things continued to heat up at energy efficiency firm Eaga last year but the company conceded its faces some near term competitive challenges. Revenues in the year to 31 May grew by 3.1% to £762.2m from £738.9m the year before, and earnings before interest , tax and amortisation (EBITA) increased by 10.1% to £52.0m from (2009's £47.2m).