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FTSE moves higher

Created:
15 June 2007
Written by:
Jonas Crosland

London equities continued to make gains in opening trade on Friday, FT.com reports, after news of stake building in J Sainsbury lit up the retail sector. The FTSE 100 started the session 0.3 per cent higher at 6,670.5, a gain of 20 points. Mid-cap retailers also helped lift the FTSE 250, up 0.5 per cent to 11,867.1, a rise of 58 points.

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Sainsbury strode to the top of the leaderboard with a 4.5 per cent advance to 590.4p after the Delta Two fund bought 123m shares in the supermarket group for £732m, taking its stake in the company to 25 per cent.

Delta, an investment vehicle of the Qatari royal family, said the purchase was priced at 595p a share, raising hopes of a new takeover bid for the company. The news could also increase investor pressure on Sainsbury to release value from its property assets, and retailers with similarly large property portfolios also traded sharply higher.

Fellow grocer Wm Morrison rose 3.3 per cent to 310.8p, WH Smith made gains of 1.4 per cent and Kingfisher was 0.8 per cent higher at 242½p. Tesco rose 1.6 per cent to 459.8p.

Away from the high street, Lonmin was 3.7 per cent higher at £41.17 after analysts at Morgan Stanley increased their forecasts on platinum prices for 2008 and 2009 and lifted their price target for the stock to £50.75 from £39.00

Legal & General was 1.5 per cent stronger at 158.3p after analysts at Cazenove increased their rating on the stock to “outperform” from “in-line”, citing an upcoming share buyback and better growth prospects.

On the downside, Tate & Lyle fell 1.7 per cent to 573p after Morgan Stanley cut its rating on the stock to “underweight” from “equal weight”

For more on the market see our market data centre

Press summary:

Lloyds TSB has started the long-awaited sale of Abbey Life, its closed life insurance business that is expected to fetch more than £1bn.

The UK’s fifth-biggest bank is understood to have mandated Lehman, the investment bank, to send information on the business to interested parties that are thought to include Resolution, Swiss Re and Sun Capital, according to people familiar with the situation, writes the FT.

Richard Lapthorne, chairman of Cable & Wireless, faces an investor backlash over controversial pay proposals by the telecoms company last week. Several leading shareholders have threatened to vote against the re-election of Lapthorne at next month’s general meeting in protest. His planned bonus could pay out 5.5m shares within three years, worth about £11m at the current share price, says the FT.

Terry Smith, the chairman of Collins Stewart, has lashed out at shareholders who complain about uncapped bonuses and demand “platitudes” on environmental commitments and other such “tosh”. Writing in the Financial Times, he argues that some investors’ corporate governance demands waste the time of public companies and give an advantage to private rivals, which are free from such scrutiny.

Shares in Dobbies Garden Centres rose 17% yesterday on hopes of a £175m battle for the company between Sir Tom Hunter, the Scottish retail entrepreneur, and Tesco, Britain’s biggest supermarket chain. Hunter was rumoured to have been buying further shares in the market yesterday after snapping up 10%of the Scottish garden centre chain on Wednesday for £17.50 a share, says the Times.

A top executive at InterContinental Hotels has quit in disgrace after it emerged that he had lied about his academic qualifications. Patrick Imbardelli, who ran the group's fast-growing Asia Pacific business, resigned just a fortnight before he was due to join the main board of InterContinental, the world's biggest hotelier with more than 3,700 hotels worldwide. He was responsible for almost 200 of them, says the Telegraph.

Bank of America is being sued for allegedly colluding with ABN Amro to scupper the Royal Bank of Scotland-led consortium's €71bn bid for the Dutch bank. The claim has been made in a New York court and emerged in regulatory filings this week by Barclays, whose rival €64bn offer ABN has recommended, writes the Telegraph.

Blackstone, one of the world's biggest private equity funds, was left reeling last night after its planned $34bn stock market flotation was hit by news of a new Bill proposed by US politicians that will remove the favourable tax treatment for private equity funds. The move will send shock waves through the vast private equity industry on both sides of the Atlantic as it reveals the level of opposition in some quarters to the amount of money that private equity partners are earning, reports the Telegraph.

The head of Britain’s leading private equity lobby group was forced to resign yesterday in the face of growing criticism from within the industry. Peter Linthwaite stood down as chief executive of the British Venture Capital Association after an internal review sparked by his failure to fend off the increasingly fierce attacks on the industry. John Mackie, the former chief executive, will rejoin the BVCA part-time until a successor is named says the Times.

An investigation by the Serious Fraud Office (SFO) into BAE Systems’s dealings with the South African Government is focusing on £75m that is alleged to have been paid to middlemen acting for the defence company. The SFO is looking into a £1.6bn deal to sell Saab Gripen fighter jets to South Africa in 2001, writes the Times.

Technology will enable HSBC, Britain’s biggest bank, to halve the 8,000-strong workforce at its Canary Wharf head office within seven years, its chief executive said yesterday. Michael Geoghegan said he expected at least 4,000 employees to work from home or on the road by 2014, rather than at desks in the bank’s £1.1 bn headquarters, reports the Times.

Uranium miner UraMin is the subject of a bidding battle between rival nuclear companies. France's Areva, the world's largest nuclear reactor maker, said it was in talks with the Aim-listed company. UraMin is also thought to be talking to China National Nuclear Corporation, which oversees the country's civilian and military nuclear programmes, reports the Telegraph.

John Weston, the chairman and chief executive of software group iSOFT, has sent a letter to shareholders suggesting that CSC is set to approve a takeover from IBA after "constructive" discussions last week. "The iSoft directors believe that there is a reasonable likelihood that CSC will consent to the change of control of iSoft and the [IBA] offer continues to represent the best route forward," Weston said.

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