Conversely, shares in O2 traded above Telef?a's offer price yesterday, closing up 1.7 per cent at 209.25p reflecting continuing hopes that a counter bid might materialise, scuppering Telef?a's strategy.Mr McCafferty said: "Commentators suggest that the most serious contender is Deutsche Telekom among others, including Hutchison Whampoa and NTT DoCoMo."Orange shareholders in 1999 to the 2000 period will remember that an agreed bid by Mannesmann resulted in a subsequent transaction which saw Vodafone acquire Mannesmann. As our story on page 60 shows, the Office of Fair Trading is facing growing pressure for action, though it has proved resistant to date. Philip Hampton, the chairman of J Sainsbury, is just the latest to demand it. Spending by foreign companies on acquisitions in Britain rose to £12.3bn in the quarter - the highest since the fourth quarter of 2004 - from £8.8bn in the second, but the number of deals fell from 59 to 55. The Office for National Statistics said one of the biggest foreign acquisitions was the £577m purchase of the travel-booking website lastminute by the US group Sabre.Mergers and acquisitions across the world are being driven by the low cost of borrowing, piles of cash from soaring profits, and a recovery in equity markets. Investors should have learned that in bid situations, bidders tend to overpay for assets, and shareholders in the bidding company tend to suffer in the aftermath. Telef?a's main overseas expansion plans have until now centred on the emerging markets of Latin America as well as dominating in its domestic market. But yesterday it moved decisively to rebalance its portfolio of assets with the 200p-a-share acquisition of one of the most successful mobile operators in the most competitive and well-developed Western European markets.Having largely avoided the pitfalls of the 1999 to 2000 telecoms acquisition boom, there are fears that the Spanish company, led by its chairman C?r Alierta, has this time overpaid and fallen into the same trap that the likes of Vodafone and France Telecom suffered five years ago.Jim McCafferty, at Seymour Pierce, said: "Yesterday's [Monday's] surprise announcement of a deal between Telef?a and O2 is a reminder of events in the telecoms sector in the 1999 to 2001 period. Few people in the UK had heard of Telef?a until yesterday when its name was plastered across newspaper business sections after it revealed a £17.7bn bid for O2, the mobile phone operator that started life in the 1980s as Cellnet, under the ownership of BT Group.

With the expansion of real ales, this looks like a cocktail for winning back market share.Prices could also rise under cover of tackling binge drinking.The shares look pricey on 17 times existing forecasts. The lonely "buy" case is that the existing forecasts are too cautious Have a punt.. Like-for-like sales, which had been down 1.7 per cent in August, were only 0.9 per cent lower when the whole of the 23 weeks to 23 October are counted. The new licensing laws will allow extended opening hours, and Wetherspoon plans to run coffee shops and breakfast bars from 9am, unique among the big operators There is also at least an extra hour of boozing at night. So Wetherspoon will only be for investors willing to take risks, but it seems 2005's balance sheet is as bad as it gets, with 2006 healthier.Any moderation in the vicious trading environment will feed through quickly to profits, and things appear to be stabilising. For 10 sell recommendations on the pubs chain, there is only one positive tip. It is tempting to see this highly irregular imbalance as a screaming buy signal.Debt is high and interest cover low in this company - scarily so - a hangover from its aggressive expansion to its current size of 650 pubs and which had to be halted for safety's sake when trading deteriorated.

With the property market stabilising, so too should Friends' protection business.The company offers greater international diversification, too. In January, it bought Lombard International, the Luxembourg-based life insurer, so overseas sales have more than doubled.It is easy to overlook Friends, which has a market share of just 4.5 per cent in the UK. But its life and pensions boss Ben Gunn insists he will not chase growth at the expense of profits - a strategy that recently cost Friends' rival Standard Life dear. At 177.75p, the broker Bear Stearns says the shares are on a below-average rating for the sector. Buy.Take risk on improving Wetherspoon and prove analysts wrongThe City's analysts are near unanimously negative on JD Wetherspoon shares. That would be a fillip for group pension providers and Friends is one of the best placed to capitalise.