Canadian data communications equipment specialist Gandalf Technologies Ltd, Ottawa, this week upped its stake in rival Case Group Plc, to 9.53%, fuelling speculation that it is preparing a hostile bid for the Watford company. Gandalf declared a 5.39 shareholding on March 17 (CI No 894) and has now bought a further 2.65m shares, taking its holding to 6.05m. It refuses to confirm plans for a bid, and the City is divided over the ease with which the smaller but financially tighter Canadian company could accomplish this. Case remains hostile to Gandalf’s manoevering and has described the latest move as unwelcome. After a meeting between the two in January, initiated by Gandalf, a possible merger was discussed, but Case declared it was not seeking one, and if it were, Gandalf would be a very unsatisfactory partner. Chief executive Peter Burton said that the lack of synergy between products, plus Gandalf’s inability to offer Case any new product distribution channels ruled out the option of a merger.