UK Indexes Decline; Simon Property Raises Offer for CSC

Arthi Gupta
15 Dec, 2010
New York City

The UK indexes dropped after banking stocks fell. The UK retail sales and unemployment rate rose. U.S.-based Simon Property raised bid offer to about

[R]3:30 PM London – The UK indexes dropped after banking stocks fell. The UK retail sales and unemployment rate rose. U.S.-based Simon Property raised bid offer to about £3 billion for CSC. Old Mutual contemplated selling US Life operations to affiliates of Harbinger Capital.[/R]

The UK Treasury is likely to be paying for the support it has provided to British banks for years to come, the National Audit Office said on Wednesday.

The National Audit Office further reported that the scale of the support currently provided to the banks has fallen from its peak of £955 billion to £512 billion as at December 1, 2010.

However, the amount of cash currently borrowed by the government to support UK banks has risen to £7 billion since December 2009 to a total of £124 billion.

In London, FTSE 100 Index declined 1.79 or 0.04% to 5,889.77 and the pound edged lower to close at $1.5722.

UK Unemployment Rate, Retail Sales Rise

The UK unemployment rate remained at 4.5% in November, the Office for National Statistics said on Wednesday.

The number of people claiming jobseeker’s allowance fell by 1,200 to 1.46 million in November compared to the previous month, the Office for National Statistics said.

The unemployment rate for the three months to October was 7.9%, up 0.1 points from the previous three-month period, the first quarterly increase in the unemployment rate since the three months to April, the ONS said.

Retail sales continued their upward trend, with strong annual growth in the first-half of December, latest distributive trades survey by the Confederation of British Industry showed. Retailers expect sales growth to lose some momentum in the New Year, as the VAT hike comes into force.

Results of the latest distributive trades survey by the Confederation of British Industry revealed that 67% of retailers said their sales increased in the first-half of December, while just 11% said they were lower. The resulting balance of 56% was the highest since April 2002.

Simon Property Raises Bid Offer

Simon Property Group, Inc., the U.S.''s largest shopping-mall owner proposed a 425 pence per shares or about £3 billion in cash for the shares of UK-based regional mall operator, Capital Shopping Centres Group Plc.

The cash offer of 425 pence per CSC share represents a premium of 26% to CSC''s closing share price of 337 pence immediately prior to the commencement of the offer period on November 24, 2010 and a premium of 21% to CSC''s average daily closing price over the six-month period.

Old Mutual Proposes Closing Sale of US Life

Old Mutual plc, the Anglo-South African insurer said it now expects to close the sale of its US Life operations to affiliates of Harbinger Capital Partners LLC during the first quarter of 2011.

Old Mutual and Harbinger are continuing discussions with state regulators to obtain the approvals that are required prior to the consummation of the transaction.

Gainers & Losers

Cobham Plc dipped 0.10% to 205.70 pence after the manufacturing company said it will provide major Radio Frequency and Microwave assemblies for Aegis surveillance and fire control radar systems ordered as part of new-build Arleigh Burke guided missile destroyers for the U.S. Navy and foreign customers.

DTZ Holdings Plc gained 0.64% to 39.50 pence after the real estate adviser reported first-half revenue declined 5.3% to £159.28 million from £168.24 million in the same period last year. Loss in the period narrowed 63.4% to £8.88 million or 3.44 pence per share, compared to a loss of £24.31 million or 9.51 pence per share last year.

Infoserve Group plc surged 8.33% to 3.25 pence after the E-marketing services provider reported first-half turnover declined 2% to £2.9 million from £2.95 million in the prior-year period. Loss during the period narrowed 49% to £100,000 or 0.17 pence per share, compared to a loss of £195,000 or 1.02 pence per share last year.

SuperGroup Plc plunged 14.80% to 1,387.00 pence after the fashion retailer reported first-half Group revenue surged 65% to £90.3 million from £54.7 million. Profit in the period increased 14% to £8.89 million from the prior year''s £7.82 million. However, earnings per share dropped to 11.3 pence from 14.5 pence due to higher share count in the latest period.

3i Group plc dropped 0.37% to 320.00 pence after the international investor and the Hyva management team signed a deal to sell Hyva Holdings to a consortium led by Unitas Capital for an enterprise value of €525 million.