May 15--The pin-striped brigade of Fenchurch Street should watch out. The Russians are coming and want a piece of Lloyd's of London.

Russian billionaire Alexander Knaster, who runs pan-European private equity house Pamplona Capital Management, certainly sparked a flurry of buying of Chaucer after revealing he is looking to acquire a possible 29.9pc stake in the specialist insurer, which runs two Lloyd's of London syndicates. PCM has completed due diligence and now wants to press ahead.

Chaucer's shares raced ahead to 45 3/4p before closing 2 1/2p better at 43 3/4p amid speculation that Pamplona had in fact already amassed a sizeable stake via CFDs -- contract for difference transactions. Dealers said it could have been warehousing stock after participating in a £75m placing at 40p a share earlier this year.

Chaucer confirmed it was in talks about a possible stake sale, as well as ongoing takeover discussions.

Pamplona's actions could flush out another bidder. Predators have been circling Chaucer for months. Rival Novae, 11p better at 369p, withdrew from merger talks in March, citing the deal not being in the best interest of its shareholders. Whispers now suggest that Brit Insurance, 7p up at 205 1/2p, is lining up a cash offer in the region of 65p a share.

Amlin, which in December became the first Lloyd's of London insurer to join the Footsie, is rumoured to have had a good look at Chaucer but walked away. It closed 1 1/2p easier at 358 1/2p.

Vague bid talk lifted life insurer Friends Provident 3.9p to 71.6p.

Not helped by awful annual figures from BT (6p down at 88.4p), the Footsie traded 36 points lower at the outset. It gradually dragged itself up by the bootlaces and helped by an opening gain of 55 points on Wall Street, closing 31.21 points better at 4,362.58.

Excited punters dug in at mining giant Rio Tinto, which retrieved a 95p deficit to close 91p higher at 2594p on revived takeover speculation. Dealers heard that BHP Billiton (2p dearer at 1392p) could be planning a new all-paper offer of two and a half of its own shares for every Rio share. If true, that would hopefully finally mothball Rio's controversial $19.5bn deal with Chinese giant Chinalco.

UBS stirred things up too by suggesting that BHP Billiton may offer to help underwrite a Rio rights issue and propose an iron ore joint venture as an alternative to a deal with the Chinese.

Silver and gold miner Fresnillo sparkled at 631p, up 66p, and pure gold miner Randgold Resources glittered at 3977p, up 138p, after tracker funds made their presence felt following their inclusion in the Morgan Stanley Capital Index.