Takeover activity among London listed companies over the past six months has been punctuated by sharp share price rises in the days leading up to bids being announced. If trades are based on privileged inside information, they would be illegal.

Shares in the London Stock Exchange (LSE), which itself is midway through a hotly contested battle for ownership, rose 10 per cent in the month before the declaration of bid intentions by Deutsch Börse, the German rival. They subsequently rose another 30 per cent.

Shares in Aggregate Industries rose 4 per cent on heavy trading volume the day before Holcim, the Swiss cement company, confirmed its £1.8 billion bid. When the bid was formally outlined, Aggregate shares rose another 23 per cent. Shares in Novar, the building supplies company, also jumped 4 per cent the day before Melrose confirmed its approach.

Leading FTSE investors would not comment publicly but have pointed to a general increase in levels of corporate activity and a subsequent rise in purely speculative trading. They say that high levels of corporate activity have prompted speculators to target potential deals in sectors where takeover activity has been high.

The Financial Services Authority, which monitors suspicious stock trading, does not comment on specific cases, but denied it was losing control over questionable dealings.

The regulator has about 16 people in its screening unit, which deals with allegations and complaints from the LSE, brokers and the public. An FSA spokesman said: “We are certainly not complacent. We are constantly monitoring activity in the market and routinely reviewing unusual price movements ahead of major announcements.”

Explore Industry Sectors

• Banking & Finance

• Construction & Property

• Consumer Goods

• Engineering

• Health

• Industrials

• Leisure

• Media

• Natural Resources

• Retailing

• Support Services

• Technology

• Telecoms

• Transport

• Utilities

Times Recommends

• B&B shareholders forced into funding rescue
• John Lewis department store sales plunge 8.3%
• Families turn to credit to cover mortgage bills