But with even ABN arguing 20p might prove a floor for the shares – at least pending clarification of how it will pay for its restructuring – Corus eventually ended up 0.25p at 20.5p. Morgan Stanley, too, was negative on the outlook for the steel sector. ABN Amro had become the latest broker to abandon its positive stance on the old British Steel following its dismaying interim results last week. With talks between the two understood to be progressing, EMI shares were up 5.25p to 153p.Nestor Healthcare, the agency nurses and doctors group, was up a penny at 317.5p as investors read last week’s rejection of takeover approaches as internal confidence in the group’s future prospects.Corus staged a dramatic reversal after plunging another 16 per cent in early trading. The hope is merger with Time Warner’s music business will allow it to save around £160m a year of costs and dramatically enhance shareholder value at EMI.

And Alizyme, the biotech group with three products ready to go into the last phase of human trials, was up a penny to a record 141p on speculation it has received an informal bid approach.Investors noted strong buying of EMI despite news that global music sales had dropped by 10.9 per cent in the first half of the year and despite a note from Lehman Brothers that predicted lower profit margins at the record company. Manchester United shares were a ha’penny better at 196.5p.There was more heavy trading in Woolworths (up 0.75p to 45p) as takeover rumours refused to die. Hays, which is still trying to sell its unwanted logistics business, saw its shares dip a penny to 106.75p.Manchester United again failed to shake off takeover speculation and after the market closed, it was revealed that Malcolm Glazer, the wealthy owner of American football team the Tampa Bay Buccaneers, had almost doubled his stake to 5.9 per cent. The stock was being punted by Dresdner Kleinwort Wasserstein yesterday, with the broker arguing the company is generating strong, sustainable profit growth from long-term contracts. There was also talk a big investment bank plans a seminar on the banking sector, which could generate positive news. Abbey National, up 23.5p to 517.5p, and HBOS, up 28.5p at 716.5p, were the sector’s other stars.The logistics giant Exel managed an excellent 29.5p jump to 692p on hopes of a strong rebound in air freight volumes next year.

The value of its rights – which trade separately, although investors have another fortnight to decide whether to pay up for the new shares – increased 5p to 17.25p.The FTSE 100 index closed a whopping 77.9 points higher at 4,169.2 in strong trading volumes.Barclays had one of the strongest rebounds, ending up 23p at 484.75p, as rumours it could receive a bid from Citibank of the US did another tour of the dealing rooms. Royal & SunAlliance, the troubled insurer, topped the FTSE 100 performance table with a 5.75p gain to 86.5p. The arrival of David Doyle as finance director (a new man from the Pru) could prompt what investors believe is an overdue review of the business.The one remaining option is that Egg will find a French joint venture partner to spare the blushes of the chief executive, Paul Gratton, but that hope appears to be fading.Prudential shares were up 14p to 424.75p yesterday, though, as financial stocks reversed the panicky sell-off that ended Tuesday’s session. So far it has spent just shy of £100m setting up the business, but customers have proved hard to come by, and word is the company could earmark the rest of the £200m investment for redundancies and other shut-down costs. Is Egg, the internet bank, about to kiss adieu to its £200m investment in France? The company, created and 79 per cent owned by Prudential, has spectacularly failed to crack the French market and speculation was growing yesterday that it plans to cut its losses.
Egg shares were down 3p to 126p in a market led higher by the other financial sector stocks.The company has tried to export its cheap and cheerful credit card offering from the UK, where it has been successful, to France, where credit cards are not so widely used. They hold a very different view from equity analysts and the City and, if the lawyers are right, the City has completely misread the situation.What merger savings are available?Some City forecasts see higher merger savings than ITV itself, such as ABN Amro (see above), while others say £100m is possible. Interestingly, there are much greater savings available to ITV from areas outside the merger – from tax breaks (the digital dividend), the savings from not having bought football rights and a much lower cost when it renegotiates the terms of its broadcast licences.What happens if the deal doesn’t go through?The risks for Carlton would be much greater, given its high gearing and the premium rating accorded to its shares.

Carlton’s Michael Green is much more vulnerable and his company’s shares are likely to fall much further if there’s no deal.However, since the autumn of last year, Carlton and Granada have shown they can work together in ITV and make real progress: relationships have improved with advertisers, audiences for programmes have stabilised and the ITV Digital debacle is now well behind it. The companies offer plenty of upside, even without the merger, including an advertising recovery that should begin to kick in next year.. A behavioural remedy is a much less clean solution and needs to be policed – regulators just don’t have the manpower for this.However, lawyers will also tell you there is also a very good chance of an outright ban on the Carlton-Granada deal. However, ask a competition lawyer and they will tell you firstly that the structural solution is statistically much more likely to be imposed by any regulator. Advertisers complain that they have been bullied by ITV for years.