FTSE Surges 2%; Reckitt Benckiser Sales Up 14%

Arthi Gupta
20 Apr, 2011
New York City

The UK indexes soared led by technology stocks. Tate & Lyle agreed to sell Vietnamese sugar interests for

[R]4:00 PM London – The UK indexes soared led by technology stocks. Tate & Lyle agreed to sell Vietnamese sugar interests for £33 million. Northgate inked debt refinancing package. Chemring agreed to buy detection systems unit of General Dynamics for £55.2 million. Rio Tinto raised stake in Riversdale to 72%.[/R]

The Bank of England minutes showed that six members of the Monetary Policy Committee voted to retain the key interest rate at 0.5% in April, while three members preferred a rate hike. The meeting was held on April 6 and 7.

Andrew Sentance preferred a 50 basis point hike, Spencer Dale and Martin Weale sought a quarter point increase.

Also, eight members of the MPC voted to maintain the size of quantitative easing at £200 billion. Only Adam Posen voted against the proposition, preferring to increase the size of the QE by £50 billion.

In London, FTSE 100 Index gained 120.43 or 2.04% to 6,017.10 and the pound edged higher to close at $1.6393.

Tate & Lyle Sells Vietnamese Sugar Interests

Tate & Lyle Plc, the food ingredients firm agreed to dispose of its Vietnamese sugar interests to TH Milk Food Joint Stock Co. for a cash consideration of £33 million.

Under the conditional contract, Tate & Lyle will also receive its share of the value of working capital and net cash to be retained in the business on completion of the deal.

Northgate Inks Debt Refinancing Package

Northgate PLC announced signing of comprehensive debt refinancing package for the group.

The refinancing comprises of new eight year £100 million term loan facility from the Prudential/M&G UK Companies Financing Fund, a substantially changed committed bank facility with an extended maturity of September 2014.

Initially £470 million in size and reducing to £395 million in November 2012 and the Group''s existing loan notes which will remain invested until their original maturity dates.

The company noted that, these facilities provide the group with £743 million of committed facilities up to the year-end in April 2012, and £620 million of committed facilities up to the year-end in April 2013.

Chemring Buys General Dynamics'' Detection Systems

Chemring Group Plc said it conditionally agreed to purchase the Detection Systems operations and certain related assets of General Dynamics Armament and Technical Products, a unit of General Dynamics Corp., for a total cash consideration of $90 million or £55.2 million.

Rio Tinto Raises Stake in Riversdale

Rio Tinto Plc announced that it will raise its shareholding in Riversdale Mining Ltd to 72% after it received acceptances from Brazilian steel producer CSN Europe Lda to buy its entire 19.35% shareholding in Riversdale.

Tesco Buys Majority Stake in blinkbox

Tesco PLC acquired 80% stake in video-on-demand pioneer blinkbox from Eden Ventures and Nordic Venture Partners.

The acquisition positions Tesco for the next stage in the Internet-driven revolution in home entertainment.

Hanover Insurance Offers To Buy Chaucer Holdings

The Hanover Insurance Group, Inc. said that it will acquire 100% of Chaucer Holdings PLC subject to satisfaction of the conditions set forth in its offer. Chaucer shareholders would receive 56 pence per share in cash, including the 2.7 pence per share dividend announced by Chaucer on March 7 for an aggregate transaction value of about £313 million.

The offer values Chaucer at around 1.26 times estimated tangible book value per share as of December 31, 2010, after adjusting for the effects of Chaucer''s recently announced estimated catastrophe activity.

Gainers & Losers

Bunzl Plc surged 3.50% to 739.50 pence after the distribution and outsourcing Group said overall trading has been consistent with expectations and that first-quarter revenue grew 12% from last year on a constant currency basis.

Catlin Group Ltd. gained 0.70% to 375.60 pence after the specialty property/casualty insurer and re-insurer estimated a loss of around $200 million, net of reinsurance and reinstatements due to the earthquake and tsunami which devastated areas of northeast Japan.

The company noted that the estimate is based on total insured losses of between $20 billion and $30 billion.

Computacenter plc climbed 0.09% to 455.80 pence after the IT infrastructure services provider said first quarter group revenue increased 2%, on a reported basis.

Elan Corporation, plc fell 1.42% to € 5.70 after the neuroscience-based biotechnology company reported first quarter total revenue rose 0.8% to $313.0 million from $310.5 million in the prior year. Profit in the quarter was $68.2 million or $0.12 per share compared to a loss of $6.8 million or $0.01 loss per share a year earlier.

Home Retail Group plc surged 7.07% to 224.10 pence after the home and general merchandise retailer said sales for fiscal year 2011 declined 3% to £5.85 billion compared with £6.02 billion in the comparable period.

Profit for the year slipped 9% to £190.9 million or 23.0 pence per share versus £209.8 million or 24.1 pence per share in the prior-year period.

Reckitt Benckiser Group plc soared 4.17% to 3,309.50 pence after the consumer goods company reported first quarter net revenue increased 14% to £2.28 billion from £2 billion in the comparable period. Net income in the quarter grew 2% to £355 million from £348 million last year.

Basic reported earnings per share marginally improved to 48.9 pence from 48.3 pence.