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Tuesday's news and views

Created:

10 June 2008

Written by:

Tanya Malick

• Supermarket giant Tesco said group sales for the thirteen weeks ending 24th May 2008 increased by 13.7%, driven by all parts of its strategy.

• BAE Systems has completed its acquisition of Ohio-based MTC Technologies in a deal worth $450m.

• Brewer SABMiller is expanding its operations in Russia after agreeing to buy LLC Vladpivo, the largest brewer in the Russian far east Primorie region.

• Miner Kazakhmys has agreed to acquire a further 7.7% stake in fellow Kazakh miner ENRC to increase its stake in the group to 22.24%.

• Broadcaster ITV has appointed Lee Bartlett as managing director of ITV global content as replacement for Dawn Airey, who resigned in April to join Channel Five owner RTL.

• An increase of 3.5% in UK like-for-like sales, excluding petrol during the first quarter, left supermarket titan Tesco in the red today.

• Software group Flomerics was unable to contain its joy this morning that as of 3pm yesterday rejected suitor Mentor Graphics had only received 2.44% acceptances for its 104p a share cash offer.

• Shares in direct marketing firm DM Group moved higher after it announced a strategic review which it said could lead to an offer being made for the company.

• Hampson Industries has entered into a new, extended £7m a year deal with a "major customer" to supply small, precision machined components, the aircraft components and car parts maker said today.

• Advanced Power Components has shipped its first batch of infection-resistant keyboards to hospitals across England to tackle the spread of hospital-acquired infections like MRSA and clostridium difficile.

• Marketing and advertising agency Adventis has acquired technology marketing firm Second2Limited for a total of £10.5m, including conditional payments.

• Tullow Oil has signed a memorandum of understanding with Eni for the sale of its 51.69% interest in the offshore Hewett Unit fields in the North Sea.

• Fashion group Ted Baker raised revenues by 8.4% in the 19-week period to 7 June, with gross margins in-line with expectations.

• Soft drinks maker AG Barr said revenue for the first 13 weeks of the financial year increased by 4% as its trading outlook remains in-line with expectations.

• Carclo saw underlying profits for the year rise 19.1% but pre-tax profits slipped as the plastics and engineering group incurred exceptional charges.

• Financially troubled marketing firm Media Square said annual losses increased as it completes its first year of a three-year turnaround.

FOR A SUMMARY OF LATEST MOVEMENTS IN EQUITY, COMMODITY AND CURRENCY MARKETS, SEE THE 'MARKETS' PAGE

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PRESS SUMMARY:

Investors have bet that the Bank of England will have to raise interest rates as many as three times before the end of the year.

Swap rates - the key money market measure reflecting traders' expectations for borrowing costs - rose at the fastest rate since Black Wednesday 16 years ago after a "shocking" rise in factory gate inflation. In scenes described by one observer as "carnage", traders embarked on a massive sell-off of UK government bonds, pricing in the likelihood that the Bank's Monetary Policy Committee will lift the official base rate to 5.75% by the end of the year, reports the Telegraph.

British Energy rebuffed a £10bn-plus takeover offer from EDF last night, arguing that recent increases in wholesale energy prices justified a valuation higher than that proposed by the French energy group last month. A statement from British Energy said that it had received a number of proposals but none had been above its closing share price on Friday of 735p, which valued the company at £11.8bn, writes the Times.

Qinetiq chief executive Graham Love and chairman Sir John Chisholm have been labelled as behaving dishonourably and the Ministry of Defence as "an innocent at a table of cardsharps" ahead of a report into the defence company's controversial privatisation. The report, published today by the House of Commons' Public Accounts Committee (PAC), paints a damning picture of the behaviour of QinetiQ's top management, reports the Telegraph.

Candover, the private equity group, is considering making an approach for Informa after news broke that the Lloyd’s List owner and United Business Media are in merger talks. A bid from Candover, the co-owner of Springer Science & Business Media, the German publishing group, would probably be made alongside Cinven, its partner in Springer. Informa previously turned down an offer from Springer at 630p a share at the end of 2006, reports the Times.

President Bush issued a call for a rise in the value of the US dollar on currency markets yesterday in a signal of mounting official alarm in Washington about the effect of the slumping greenback on the world's largest economy. In an exclusive interview with The Times on the eve of the United States-European Union summit in Slovenia, Mr Bush expressed concern about the dollar's continuing weakness and said that he favoured an appreciation in the US exchange rate.

House sales slumped to a 30-year low last month, raising fears that the downturn in the housing market could turn into a crash. Chartered surveyors reported that an average of 17.4 transactions had been completed each month between March and May, down from 18.5 in the three months to April. This is the lowest figure since records began in January 1978, according to the Royal Institution of Chartered Surveyors (RICS), writes the Times.

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