Two days since Permira’s dusk raid, Britvic remains the talk of City. The latest theory doing the rounds was that, although the private equity fund made its move in anticipation of a bid approach, it is unlikely to turn predator itself.

By raising its stake in the soft drinks maker to almost 14 per cent, Permira could be positioning itself to profit from a move by another buyer, traders speculated. One leading candidate would be Europe Beverages, the former European drinks arm of Cadbury that was bought out last year by a Blackstone and Lion Capital consortium for £1.27 billion cash.

“If Britvic were combined with Europe Beverages it would create a pan-European soft drinks company with an enviable stable of largely complementary brands,” Anthony Codling, an analyst at Cazenove, said in a research note.

Permira has little experience of the drinks industry, so would probably struggle to win the backing of Britvic’s board and could jeapordise the group’s long-term bottling agreement with PepsiCo. However, the prospect of a merger with Europe Beverages, the owner of the Schweppes and Orangina brands, may be viewed more favourably by both Britvic management and PepsiCo.

Using the valuation multiple Europe Beverages paid for Cadbury’s drinks arm, Mr Codling arrived at a takeout price of 383p per Britvic share, based on its 2007 earnings expecatations, rising to 400p on a 2008 forecast. Britvic shares rose 12½p to 293½p, pacing the FTSE 250 index risers.

In the wider market, the miners weighed against an early rebound as the FTSE 100 slipped to a third straight decline, down 5.3 to 6,198.6. Antofagasta eased 11½p to 508p and Xstrata retreated 29p to £24.77 as copper prices slipped to a six-month low in reaction to data showing a surprise increase in London Metals Exchange warehouse stockpiles.

Reuters was also among the casualties, down 3¾p to 439p, after Lehman Brothers downgaded to “equal weight” and cut earnings forecasts to account for the weak dollar. While cost savings will arrive by the turn of the decade, shares will look expensive in the meantime, the US broker argued.

BT Group beat the trend, adding 11¼p to 316½p having lagged over the previous two sessions after its pensions review proved more onerous than hoped. There have also been hopes that BT could spin off OpenReach, its local loop business, an option that management has rejected so far.

A broker tip helped Experian, up 5½p to 593p, after Morgan Stanley raised its rating on the credit checking agency to “outperform”. The dollar’s decline meant that Experian underformed its US peer Equifax by 15 per cent in the past few weeks despite its superior growth profile and scope to expand, it said.

In the midcaps, Northern Foods eased 6p to 114¾p after Credit Suisse reminded investors that the Fox’s biscuits maker has issued a January profit warning in all but one of the past five years. The Swiss bank’s team downgraded shares to “neutral”, saying that a 30 per cent rally in the past month meant risk was outweighing reward.

A year-end trading update from Bodycote proved as weak as feared, with shares in the heat treatment group down 8p to 229p. The big concern was over slowing sales growth at its testing labs, one of the company’s key expansion drivers.

Inchcape, the car dealership that last month agreed to buy rival European Motor Holdings, rose 15¼p to 510p as a story did the rounds that it could be a takeover target itself.

A benign trading update sent Aegis 1½p lower to 138½p. Trading took second place to speculation about the intentions of Vincent Bolloré, the French corporate raider who holds 29.2 per cent of Aegis shares. Some investors are anticipating a stalemate, with Mr Bolloré unable to afford a full bid and unwilling to sell the stake as it may benefit a competitor to Havas, the agency he chairs.

• NEW YORK: The Dow Jones industrial average hit an intra-day record early in the session amid optimism over global mergers, but finished 5.69 points down at 12,463.90.

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