Rank, the troubled casino and bingo operator jumped 8 per cent on heavy volume this morning amid speculation of a bid.

There have been reports that Las Vegas-based Harrah's Entertainment, the rival group which bought London Clubs International for £300 million last year, had sought to sell Rank its UK casinos into Rank in return for a 28 per cent stake. The approach was rebuffed by Rank, but it may have come back with a better offer. Harrah's is in the process of being acquired by private equity and may want to reduce its costs in the UK by parking its interests with Rank.

Privately owned bingo and casino operators Gala and Riva may also be interested.

There has also been talk that Genting of Malaysia would seek to bid or that Ladbrokes or William Hill could. But Genting last week took a big writedown on its UK bingo and casinos, so is unlikely to want to expose itself further, while the bookies have privately expressed unwillingness to bid.

By 10.30am some 14 million shares, twice the average daily volume, had changed hands and Rank's price was 90p. However, the stock is heavily shorted so any whisper of good news can have a big effect on the price.

The FTSE-100 improved steadily during the morning and was up 49.8 at 6,190.9 by 11.50am.

Sage Group was the top FTSE-100 performer, up 8 per cent at 209.2p after it said that it would increase its future dividend payments and revealed that all was going well with its US business, where there had been fears of a slowdown.

Compass was another stock that enjoyed a relief rally after better than expected results. It was up 7 per cent at 310.75p. It had been weighed down by negative comments from French rival Sodexho over rising food raw material prices.

Bank stocks bounced, with Barclays up 3.3 per cent at 547.5p. Collins Stewart upgraded to a buy.

BHP Billiton eased 2 per cent to £14.87 as analysts said that it would have to raise its offer for Rio Tinto to succeed.

Rio was up 22p at £51.89. Wolseley was down 1.6 per cent at 630.5p after it warned of even further deterioration in its markets over the next few months as the woes of the US housing market would spill over into the repair and maintenance market, and demand in the commercial and industrial market would also slow. It said that it expected the UK repair and maintenance market to soften further.

This hurt the housebuilders. Taylor Wimpey lost 2.8 per cent to 187.1p and Barratt Developments was down 1.2 per cent to 444.75p and Travis Perkins, the rival builder's merchant lost 4.6 per cent to £12.36.

In the mid caps, Paragon continued to recover, up 10 per cent at 137p and Benfield, the reinsurance broker, continued to gain up 3.25 per cent to 309.75p on talk that Aon of the US might bid.

Burren Energy also ticked up 3.4 per cent on talk that Mittall or Italy's Eni would bid again.

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