UK Consumer Confidence Falls; Seagate Rebuffs Offer

Arthi Gupta
30 Nov, 2010
New York City

The UK indexes slid after consumer confidence fell to 4-month low in November. Irish private sector credit growth slackened in October. Seagate rejected buyout offer. BASF formed a venture with Ineos Industries on styrenics businesses.

[R]4:00 PM London – The UK indexes slid after consumer confidence fell to 4-month low in November. Irish private sector credit growth slackened in October. Seagate rejected buyout offer. BASF formed a venture with Ineos Industries on styrenics businesses.[/R]

In London, FTSE 100 Index rose 16.40 or 0.31% to 5,568.21 and the pound edged lower to close at $1.5542. The index recovered from the losses in the afternoon to as much as 0.3%.

Business Secretary Vince Cable joined Chancellor of Exchequer George Osborne in urging banks to disclose bonuses paid to high ranking employees at banks. In an interview with BBC Radio 5, he said that we need transparency in the U.K. “not just for banks but for high pay in general.”

UK Consumer Confidence Declines

The GfK NOP Consumer Confidence Index, an indicator of sentiment among 2,000 Britons, decreased by 2 points to -21 in November, a four-month low.

The index gauging the economic situation over the next 12 months dropped to -22 in November from -20 in October. The index measuring the climate for major purchases fell to -17 in November from -15 in October.

Irish Private Sector Credit Growth Dips; Consumer Sentiment Steadies

Ireland''s central bank said on Tuesday that private sector credit growth slowed for the third straight month in October. Private sector lending climbed 0.9% in October after recording an annual 1% growth in September.

Loans to households declined 4.9% annually in October, versus the 4.5% decrease seen in September.

Irish consumer sentiment stabilized in November after falling to its weakest level in 17 months in October, survey results from the Economic and Social Research Institute, or ESRI, showed on Tuesday.

The KBC Ireland/ESRI consumer sentiment index was at 48.4 in November compared to a reading of 48.1 in October. A year earlier, the index was at 53.6.

Seagate Aborts Buyout Deal

Seagate Technology plc, the hard disk drive maker ended talks with private equity firms to go private, on lower than expected valuation offered.

Last month, the company announced that it had received a preliminary indication of interest from an unnamed party.

Steve Luczo, Seagate chairman and CEO. ""Management and the Board have chosen to cease discussions concerning a private equity-led leveraged buyout. Given the strong debt markets, improving business conditions and other financing options, Seagate has initiated a plan to further optimize its capital structure to maximize shareholder returns.""

Seagate also said that its board of directors authorized the company to repurchase up to an additional $2 billion of its outstanding ordinary shares to boost shareholder value.

BASF and Ineos Industries in a Venture

BASF SE, the German chemical giant signed a letter of intent with UK-based Ineos Industries Holdings Ltd. to form a new 50-50 joint venture called Styrolution on their styrenics businesses, with expected annual sales of over €5 billion.

BASF will receive a cash consideration following the completion of the transaction. Additional financial details were not disclosed.

Gainers & Losers

Aberdeen Asset Management plc dipped 0.06% to 178.90 pence after the independent asset management company reported revenue for fiscal year 2010 surged 51% to £638.2 million, from £421.9 million in 2009 due to the combined effects of new business flows, improved market levels and the inclusion of the ex-Credit Suisse business for a full year.

Profit generated in the period was £92.6 million or 8.04 pence per share, compared to a loss of £8.1 million or 1.71 pence per share last year.

Halma Plc slumped 4.86% to 313.00 pence after the safety equipment maker reported first-half revenue rose 12% to £249.08 million from £222.05 million a year ago. Profit for the period increased 37% to £35.31 million or 9.36 pence per share, compared to prior year''s profit of £25.73 million or 6.85 pence per share in the year earlier period.

Holidaybreak Plc soared 4.07% to 281.00 pence after the European specialist holiday group said fiscal year 2010 group revenue slipped 2.4% to £461.7 million from a restated £473.4 million in the comparable period. Net income in the period surged 676% to £20.2 million or 28.7 pence per share, from £2.6 million, or 4.4 pence per share a year earlier.

Triad Group plc plunged 16.67% to 15.00 pence after the IT services company reported first-half revenue decreased 13% to £12.30 million from £14.15 million in the comparable period last year. Loss before tax for the period narrowed 5% to £385,000, compared to a loss of £405,000 in the previous year''s comparable period. On a per-share basis, loss was 2.54 pence compared to a loss of 2.67 pence last year.

Ultrasis Plc declined 2.22% to 0.440 pence after the provider of interactive healthcare and related services reported fiscal year 2010 revenues declined 24% to £3.19 million from £4.17 million in the previous year. Profit for the period plummeted 95% to £146,000 or 0.01 pence per share, as against last year''s £3.2 million or 0.21 pence per share.