Economics
Industrial activity levels sped up last month, according to the
CIPS/NTC purchasing managers’ index, a closely watched survey of the sector.
Its headline activity gauge rose to 54.9 from 53.7 in April, on a scale
where any figure above 50 indicates rising activity. Industry continued to
raise prices aggressively, the survey suggested. Its output price index
edged up to 56.9 from 56.8, matching a record high chalked up in February.
Eurozone quarterly economic growth slowed as expected at the start of
the year as consumer demand contracted and export growth plunged, Eurostat
data showed. It confirmed its earlier estimate that eurozone GDP rose by 0.6
per cent in the first quarter and was up by 3 per cent over the
year.Eurostat also said that eurozone unemployment fell to a seasonally
adjusted record low of 7.1 per cent in April from 7.2 per cent in March.
US manufacturing The US Institute for Supply Management said that its
manufacturing index rose last month to its highest level in a year,
providing hope that the economy will continue to expand despite a housing
slump and rising gas prices. The index registered 55, above the April
reading of 54.7.
US housing resales Pending sales of existing US homes in April
unexpectedly fell to their lowest level since February 2003, according to
the National Association of Realtors. Its Pending Home Sales Index fell by
3.2 per cent to 101.4 from an upwardly revised level of 104.8 in March.
Banking
& finance
Down 0.35%
ACP Capital, the SME-specialist merchant bank, has bought a 20 per cent
stake in GCI, a German private equity company, as part of its plan to build
a business across Germany, Italy, France and the UK.
Aberdeen Asset Management completed its purchase of some of Deutsche
Bank’s Australian fund management businesses for A$116 million (£48
million).
LCL, the French retail bank that is part of Crédit Agricole, announced
that it planned to cut 3,519 jobs, or 15 per cent of its staff, by 2010.
IFR Capital, the AIM-listed investment company that focuses on the
European food retail sector, has bought Homann Chilled Food in Germany for
€89 million (£60.5 million). IFR toon on €93 million debt as part of the
deal.
Construction
& property
Up 0.05%
Invista Real Estate Investment Management, the UK’s largest listed
property fund manager, has bought 317 freehold houses in the South West of
England for £127.5 million from HBOS via a joint venture with Bank of
America. The houses were built for and let to the Ministry of Defence on a
gross yield of 6.7 per cent.
PIK Group, the Russian property developer, raised $1.8 billion (£910
million) on its stock market debut on the Moscow and London exchanges, about
$400 million less than hoped for after the shares were priced at the bottom
of its $25 to $31 guide range. Deutsche Bank, Morgan Stanley, Nomura and
Merrill Lynch organised the offering.
Vincent Tchenguiz is bidding to become one of Britain’s largest
residential landlords with a £500 million venture with the Royal Bank of
Scotland to capitalise on the exodus from the buy-to-let sector.
Cyril Sweett, the quantity surveyor and project management consultancy,
is monitoring the redevelopment of Broadcasting House on behalf of its
backers, not acting as project manager as we reported (Business, May 29). We
are happy to set the record straight.
Consumer
goods
Up 0.67%
Heineken, the Dutch brewer, is to appeal against the recent ruling by
the European Commission that it ran a price-fixing cartel between 1996 and
1999 with Grolsch, InBev and Bavaria.
Hornby, the model railway group, posted lower than expected profits
despite a late recovery in sales. Hornby, which recently acquired Airfix,
the model kit maker, was hit by the strength of the pound against the euro
and the dollar as the modest 1 per cent profits increase to £8.1 million
fell below consensus forecasts of £8.8 million.
Engineering
Down 0.50%
Siemens plans to list part of its VDO Automotive unit by the end of
September, a spokeswoman said. “Preparations are going forward at full
speed,” she added. Siemens said earlier that it wants to list up to 49 per
cent of the unit, which analysts expect to achieve a market capitalisation
of between ¤9 billion (£4.75 billion and £6.1 billion).
Health
Up 0.88%
AstraZeneca said that its indirect wholly owned unit, AstraZeneca
Biopharmaceuticals, had valid acceptances representing about a 96 per cent
stake in MedImmune at the expiration of the initial offering period. The
pharmaceuticals group said that its unit would provide a subsequent offering
period to all MedImmune shareholders who have not yet tendered their shares,
after which AstraZeneca intends to complete the acquisition of MedImmune
through a short-form merger without a vote of MedImmune’s stockholders.
Industrials
Up 0.57%
Anglo American plans to give shareholders 35 shares in Mondi for every
100 they own in Anglo American, under proposals released in its demerger
prospectus for the paper and packaging company. Existing shareholders will
get 10 shares in Mondi Ltd, 25 shares in Mondi PLC, and 91 new Anglo
American shares. Mondi will be listed in London and Johannesburg.
Leisure
Down 0.47%
Carluccio’s, the Italian deli-dining chain, returned to the bid
spotlight after Richard Caring, the owner of the London eateries Le Caprice
and The Ivy, lifted his stake from 3 per cent to 5.1 per cent.
All Leisure Group, a cruise operator, is to raise £30 million via an
AIM listing that will value the 77 per cent stake of its founder, Roger
Allard, at more than £50 million.
Whitbread, the leisure operator, is poised to announce the sale of
David Lloyd Leisure for almost £940 million to London & Regional,
the property group that owns Next Generation Clubs.
Interactive Gaming Holdings asked for trading in its shares to be
suspended because of a delay in publishing its accounts but refused to
comment on speculation that John Heaton, its chief executive, had left the
company.
First Choice Holidays and TUI, the German owner of Thomson, are
expected to receive regulatory clearance from the European Commission next
week to complete a £4 billion-plus merger subject to the sale of an Irish
business.
Media
Down 0.44%
TMG, the Dutch media group, is to acquire a minority stake in
ProSiebenSAT1, the German commercial television giant, if the latter is
merged with the rival TV group SBS, the Dutch magazine and newspaper
publisher said. ProSiebenSAT1 is owned by KKR and Permira, the private
equity firms, which also hold the majority stake in SBS.
CKX Simon Fuller, the entertainment svengali behind American Idol and
David Beckham, have launched a $1.3 billion (£656 million) bid to take his
employer, CKX, private in conjunction with his boss, the US mogul Robert
Sillerman.
The Wall Street Journal The Bancroft family, Dow Jones’s controlling
shareholders, have unexpectedly agreed to meet Rupert Murdoch, chief
executive of News Corporation, parent company of The Times, increasing the
likelihood of a $5 billion takeover of the publisher of The Wall Street
Journal.
Natural
resources
Down 0.14%
TNK-BP Russian authorities gave BP an extra two weeks yesterday to
negotiate a deal over its future role in the $20 billion (£10 billion)
Kovykta gasfield, by delaying a decision over whether to revoke the group’s
licence.
Retailing
Up 0.38%
Thresher Group, the UK’s biggest off-licence business, which owns
Threshers, Wine Rack and Haddows in Scotland, has been sold by the
entrepreneur Guy Hands’s Terra Firma investment company to a consortium led
by Edmund Truell, the former head of Duke Street Capital.
Permira, the private equity fund, secured majority control of Valentino
in a €500 million (£340 million) deal, and will now make full bids for the
Italian fashion house and its Hugo Boss menswear brand. A full takeover
would value the group at €2.6 billion.
John Lewis Partnership, the employee-owned retailer, said sales at its
26 UK department stores in the week to May 26 fell 2.9 per cent compared
with the same week last year to £45.6 million. In contrast, sales at John
Lewis’s chain of 183 Waitrose supermarkets were up 9.6 per cent to £76
million. Like-for-like sales were up 6 per cent.
DFS, the furniture company, said profits rose 3.5 per cent to £61.4
million as underlying sales rose 5 per cent in the year to July 29.
Kingfisher is expanding its presence in Asia with the opening of the
first B&Q store in Hong Kong.
Support
services
Down 0.50%
Aggreko, the Scotland-based supplier of temporary power, said that
trading in its international division had been extremely strong with record
levels of fleet utilisation.
Office2office said that it had withdrawn from the four-year tender for
supplying office products to the Ministry of Defence, citing profit margins
below acceptable levels, and added that it expected its withdrawal to result
in increased costs and reduced turn-over this year. But it has extended its
contract to supply products to the National Health Service from October 2007
to March 2009.
Technology
Up 0.45%
Apple Fresh privacy fears have been sparked after it emerged that Apple
had embedded personal details into music files bought from its iTunes music
store.
Torex Retail, the retail software company, has named Keith Taylor chief
executive because Neil Mitchell’s employment has been terminated. Mr
Mitchell had been asked to step down as chief executive in January after the
Serious Fraud Office launched an investigation into the company’s finances.
He said that he had reported Torex to the SFO and would seek reinstatement
under legal protection afforded to whistleblowers.
iSoft, which is providing software to the NHS, said that it had
initiated legal proceedings over the refusal of a key partner to endorse a
£132.3 million takeover. ISoft, which has been hit by delays to a £6.2
billion contract to provide a centralised NHS database for patient records,
has backed an offer from the Australian software firm IBA Health to help to
secure its future. Computer Sciences Corporation, the company that
subcontracts the NHS work to iSoft, said yesterday that it would back the
bid, subject to certain conditions.
Telecoms
Up 0.72%
BT Group has cut prices by up to 20 per cent on two of its call tariffs
in an effort by the telecoms operator to win back customers.
The US Government has chosen AT&T, Level 3, Qwest, Verizon and
Sprint Nextel for a contract worth up to $20 billion (£10 billion) over ten
years to improve its telecommunications services. This is the second of two
contracts that comprise the Government’s Networx program, which is designed
to overhaul federal agencies’ telecommunication services.
Transport
Down 1.01%
BAA, the operator of Heathrow airport, has been given the green light
by the London Borough of Hillingdon and the Mayor of London to build a £1.5
billion terminal as a replacement for Terminals 1 and 2. BAA, which is owned
by Grupo Ferrovial, of Spain, said that phase one of the new building, named
Heathrow East, could be open by 2012 in time for the London Olympics.
Utilities
Down 0.41%
Gaz de France “shares the opinion” of Électricité de France (EDF) that
the two companies could cooperate as energy markets are liberalised from
July 1, a spokesman said. Pierre Gadonneix, the chief executive of EDF, said
that the opening of energy markets to greater competition on July 1 may lead
to joint projects with GdF.
British Energy The British Government sold a 28 per cent stake in
British Energy in Britain’s largest accelerated book-build, raising £2.38
billion. It retained a 36 per cent stake. Citigroup, Deutsche Bank and
Merrill Lynch were the bookrunners.
Up/Down = sector percentage change on day
