A strong double left SABMiller looking worse for wear, with Goldman Sachs cutting the brewer from its “buy” list and traders gossiping that Altria, its biggest shareholder, could be looking to sell its stake.

Altria, the US parent company of Philip Morris, holds just under 29 per cent of SAB shares and is due to post quarterly results on Wednesday. It is widely expected to begin a breakup by announcing plans to spin off its majority-owned Kraft foods unit.

That turned attention on Altria’s holding in SAB, which is valued at more than £5 billion and does not appear to fit naturally with the group’s plans to focus exclusively on tobacco.

But Altria has been a vocal supportive shareholder of SAB ever since it took the stake in 2002. Ben Maitland, a WestLB analyst, saw nothing to suggest that Altria’s attitude had changed, telling investors: “Any share price weakness resulting from rumours that the stake is for sale should be used as a buying opportunity.”

Goldman’s team was more concerned about SAB’s strategy than its shareholder base. A recent rally means the shares are trading on a par with international peers, meaning investors are not recognising the higher risk associated with SAB’s forays into new territories such as China, it said.

“SABMiller is now generally viewed as the leading emerging market brewer and the most effective operator in global brewing,” Goldman told clients. “However, its overall cash returns have fallen as it has embarked on several largescale acquisitions, not all of which have been successful.” SAB closed the day adrift by 13p to £11.70.

In the wider market, the FTSE 100 index added 11.9 to 6239.9 on thinner than usual volume. British Airways helped provide support, rising 14½p to 542p after it reached a deal to avert a strike by its cabin crews planned to start today.

BAT led the blue-chip risers, up 43p to £15.60 as the tobacco group prepared a bid for Tekel, its Turkish peer. Investors hope that, once the consolidation fog clears, BAT could reach an agreement with US partner Reynolds American to increase its shareholder return ratio.

Yell moved higher by 9p to 608p after Merrill Lynch upgraded the Yellow Pages publisher to “buy” in an otherwise downbeat sector note.

The logic behind leveraged buyouts of media companies is not as compelling as investors believe, producing an internal rate of return of just 11 per cent on average, the broker said. It argued that only an industry peer could buy EMI (up 1p to 242p) because cost savings would be needed to justify the price, and that Pearson (up 1p to 816p) does not look attractive because of its pension deficit.

On Yell, Merrill said the shares looked good value because stable revenues mean the company should deliver 15 per cent earnings growth over the next few years. Moreover, Yell would become a plausible candidate for a leveraged buy-out if its share price does not catch up with the earnings potential, it said.

Merrill’s team was also positive on WPP, up 6p at 742½p. With the Olympic Games, the US Presidential election and the Euro 2008 football tournament all taking place next year, prospects are strong enough to overshadow any weakness in 2007, they said.

Drax slipped 24p to a three-year low of 675½p. Shares in the coal-fired power station have dropped 17 per cent since the start of the year as falling wholesale gas prices gave a price advantage to gas-fired plants.

Among the mid-caps, Mitch-ells & Butlersrose 7p to 686½p after news late on Friday that Robert Tchenguiz had increased his holding to nearly 15 per cent of the pubs group.

The financier was rumoured to have taken the stake to pressure M&B to switch to Reit status, but that seems unlikely after HM Customs said that companies trying to avoid tax through Reit status would be “dealt with appropriately”. New York: Mergers and acquisitions helped to push the Dow Jones industrial average up in early trading, but shares fell back over concerns for this week’s Fed meeting on interest rates. They closed up 3.80 points at 12,490.80.

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