Travis Perkins Bid; Consumer Confidence Wanes

Arthi Gupta, Mayank Mehta and Sanjay Barot
28 May, 2010
New York City

UK stocks rebound led by positive gains from retailers but consumer confidence wanes. Shell acquires East Resources Inc. for $4.7 billion. Travis Perkins discusses

[R]4:00 PM London, 11:00 AM New York – UK stocks rebound led by positive gains from retailers but consumer confidence wanes. Shell acquires East Resources Inc. for $4.7 billion. Travis Perkins discusses £553 million offer for BSS Group.[/R]

UK stocks rebounded led by positive momentum from retailers but consumer confidence waned. Shell acquires East Resources Inc. for $4.7 billion in cash. Prudential seeks lower price from AIG. Travis Perkins discusses £553 million offer for BSS Group.

In London FTSE 100 Index closed lower 6.74 or 0.13% to 5,188.43 and the pound edged lower to close at $1.457 and to close at €1.176.

Consumers in the United Kingdom turned increasingly cautious in May even after the formation of a coalition government following the general election. Falling for a third straight month, the consumer confidence index dropped to minus 18 in May from minus 16 in April, a survey by GfK NOP revealed today.

The index has fallen off from February''s minus 14, but remains well above its year-ago reading of minus 27. Out of the five measures comprising the index, three decreased in May. The annual moving average of the index, however, increased to minus 19

Royal Dutch Shell plc announced today that it has agreed to buy East Resources Inc., a privately-held U.S. natural-gas explorer, for $4.7 billion in cash. Anglo-Dutch oil giant agreed to buy the subsidiaries, which own the business of Pennsylvania-based company from its private equity investor Kohlberg Kravis Roberts & Co.

British insurer Prudential Plc confirmed today that it is renegotiating with American International Group Inc. regarding purchase terms of AIG''s Asian insurance unit, American International Assurance Co. Ltd.

Prudential sought lower price from AIG after 20% of the shareholders rejected the $20 billion rights offering.

Prudential needs approval of 75% of the shareholders for the AIA deal. Institutional investors with more than 15% of the company stock and private shareholders with almost 5% holding to oppose the deal.

Travis Perkins plc and BSS Group plc''s board announced that they are in advanced discussions regarding a cash and share offer for the entire issued and to be issued share capital of BSS. The indicative offer comprises 232.91 pence in cash, 0.2608 new Travis Perkins shares per BSS share and the payment of BSS''s final dividend for the year ended March 31, 2010 of 6.09 pence per share.

The indicative offer values BSS at a price of 433 pence per BSS share and values the entire issued and to be issued share capital of BSS at around £553 million, the company noted.

Gainers & Losers

888 Holdings plc, the online gaming entertainment provider plunged 15.2% to 57.00 pence.

AstraZeneca PLC, the biopharmaceutical company rose 1.4% to 2,901.00 pence.

Electrocomponents plc rose 2.6% to 218.90 pence after the high service distributor of electronics and maintenance products said fiscal year 2010 revenues rose 0.2% to £972.6 million from £974.6 million a year ago. Net profit for the year fell 20.5% to £52.6 million or 12.0 pence per diluted share compared to net profit of £66.2 million or 15.2 pence per share a year ago.

Fresnillo plc, the silver and gold miner rose 2.2% to 903.00 pence.

Millennium & Copthorne Hotels plc, the hotel group rose 1.4% to 422.00 pence.

Prudential plc, the international financial services company fell 1.3% to 540.00 pence.

Severn Trent Plc rose 2.6% to 1,190.00 pence after the water group said fiscal year 2010 revenues rose 6% to £1.7 billion from £1.6 billion a year ago. Net profit for the year was £249.2 million or 105.5 pence per diluted share compared to net loss of £57.8 million or 24.6 pence per share a year ago.