UK Indexes Climb; Pearson Buys EDI; Inmarsat Plunges

Arthi Gupta
07 Mar, 2011
New York City

The UK indexes closed higher tracking gains in oil. The CBI urged UK chancellor to offer tax relief and focus on economic growth in the next budget. The LSE contemplated bid for Nasdaq. Pearson agreed to acquire Education Development International. IAG agreed to purchase eight aircrafts from Airbus.

[R]4:00 PM London – The UK indexes closed higher tracking gains in oil. The CBI urged UK chancellor to offer tax relief and focus on economic growth in the next budget. The LSE contemplated bid for Nasdaq. Pearson agreed to acquire Education Development International. IAG agreed to purchase eight aircrafts from Airbus.[/R]

UK stocks closed higher as energy prices resumed their climb and Libya drifts into civil war and Western government freeze assets of Libya. U.S. and UK have frozen more than $35 billion of Libyan assets.

In London, FTSE 100 Index gained 27.30 or 0.46% to 6,016.63 and the pound edged lower to close at $1.6246.

Crude oil edged up as much as 2.2% in London trading as Brent crude oil traded as high as $117.50 a barrel. The oil price has jumped more than $20 a barrel in the last three weeks.

CBI Urges for Tax Reduction

The Confederation of British Industry urged the British Chancellor of the Exchequer George Osborne to reduce tax, and to give thrust to economic growth and job creation in his budget on March 23.

In a letter to Chancellor, the business lobby said the government should address area of taxation, which is currently discouraging entrepreneurship and undermining British competitiveness.

LSE Contemplates Bid for Nasdaq

London Stock Exchange Group plc is considering a takeover bid for its U.S. rival Nasdaq OMX Group Inc., according to a report in the Sunday Times. The move comes close on the heels of LSE''s deal to combine with Canada''s TMX Group Inc., announced in early February.

Pearson Acquires Education Development International

Pearson Plc and Education Development International Plc have reached an agreement on the terms of a recommended cash offer to be made by Pearson for the entire issued and to be issued share capital of EDI at a price of 200 pence in cash for each EDI share and values EDI''s entire issued ordinary share capital at around £112.7 million.

With the purchase of EDI, Pearson will expand its work-based learning business and will create an enlarged qualifications group offering a comprehensive range of vocational and academic services to UK and international markets.

IAG Purchases Airbus A330-300 Aircraft

International Airlines Group, the combined business of British Airways and Spain’s Iberia entered into an agreement with Airbus to purchase eight A330-300 aircraft with an option on another eight for Iberia''s longhaul fleet.

The planes, due to be delivered between autumn 2012 and spring 2014, will replace up to 16 Airbus A340 family aircraft within Iberia''s longhaul fleet, which currently consists of 18 A340-300 and 17 A340-600 aircraft.

The new aircraft would be more cost effective to operate as they are around 15% more fuel efficient. With the new aircraft and options, IAG would have the flexibility to determine the overall size of Iberia''s longhaul fleet and capacity in future.

Daimler and Rolls-Royce in Talks to Purchase Tognum AG

Daimler AG, the German car manufacturer confirmed that it is in discussions to acquire the majority of Tognum AG in a joint offer with British engine manufacturer Rolls-Royce Group plc.

Daimler and Rolls-Royce plan to take equal holdings in Tognum. The deal is estimated at €3 billion or $4.2 billion.

Gainers & Losers

Barclays Plc dipped 0.13% to 312.70 pence after the banking firm released its remuneration report, which shows that Bob Diamond, who took over as Chief Executive from January this year, got £6.5 million or about $10.6 million in bonus in 2010.

BG Group plc gained 0.81% to 1,488.00 pence after the oil and gas company signed a sales agreement with Tokyo Gas Co., Ltd., for the supply of 1.2 million tons of Liquefied Natural Gas a year for 20 years from 2015.

Cls Holdings plc surged 6.97% to 660.00 pence after the property investment company reported fiscal year 2010 Group revenue rose 3.7% to £79.1 million from £76.3 million last year. Profit for the year surged 243% to £60.1 million or 127.1 pence per share from £17.5 million or 36.4 pence per share last year.

HSBC Holdings plc rose 1.38% to 661.50 pence after the financial services firm reportedly denied that it is moving its headquarters to Hong Kong from London amid shareholder queries on the higher operating cost in the city and revised regulatory regime.

Inmarsat plc plunged 12.71% to 597.50 pence after the satellite communications company said its full-year 2010 total revenue rose 12.9% to $1.17 billion from $1.04 billion in the comparable period, driven by growth of 6.5% in core MSS revenues and by a second half contribution from its Cooperation Agreement with LightSquared.

Profit during the year increased 71% to $260.9 million or $0.57 per share compared with $152.7 million or $0.35 per share last year.

Intertek Group plc surged 6.48% to 2,022.00 pence after the inspection, product testing and certification company reported fiscal year 2010 revenues increased 10.5% to £1.37 billion from £1.24 billion in the prior year. Profit for fiscal year 2010 rose 12.1% to £128.6 million or 79.3 pence per share compared to £114.7 million or 71.2 pence per share last year.

Michael Page International plc fell 1.49% to 527.50 pence after the recruitment consultancy stated fiscal year 2010 revenue climbed 16.1% to £832.30 million compared to £716.72 million in the prior year. Profit for the year soared 443% to £67.48 million or 21.1 pence per share from £12.43 million or 3.8 pence per share a year earlier.

Petrofac Limited climbed 1.09% to 1,482.00 pence after the UK-based energy services company said fiscal year 2010 revenue increased 19% to $4.35 billion from $3.65 billion last year. Profit for the year surged 57.8% to $557.8 million or 162.46 cents per share from $353.6 million or 103.19 cents per share a year earlier, helped by strong growth at its core engineering and construction segment.

Smith & Nephew Plc dipped 0.07% to 714.00 pence after the medical devices company said its Advanced Wound Management unit has issued a voluntary recall in the U.S. of selected lots of IV PREP Antiseptic Wipes.

Stagecoach Group plc climbed 0.43% to 212.50 pence after the international public transportation company reported UK Bus'' like-for-like revenue growth of 1.9%, UK Rail''s like-for-like revenue growth of 6.9% and Virgin Rail Group''s like-for-like revenue growth of 12.6% for the forty weeks ended February 6.