UK Indexes Up 0.8%; Serco Offers Intelenet

Arthi Gupta
31 May, 2011
New York City

The UK indexes rose on optimism of a resolution to Greece

[R]5:00 PM London – The UK indexes rose on optimism of a resolution to Greece’s debt crisis. The British Chambers of Commerce lowered economic growth projections for the UK and home prices fell in May. Serco agreed to acquire India-based Intelenet for £385 million.[/R]

In London, FTSE 100 Index gained 44.67 or 0.75% to 5,983.17 and the pound edged lower to close at $1.6461.

BCC Lowers Economic Growth Forecast

The British Chambers of Commerce on Monday lowered the growth projections for the UK economy for this year and the next, citing rising inflation and public spending cuts.

The BCC now predicts the gross domestic product to grow 1.3% in 2011, slower than 1.4% predicted earlier. The forecast for 2012 was revised down to 2.2% from 2.3%.

UK Home Prices Fall

Home prices in the UK declined in May as long bank holidays during the month dampened demand, according to the latest survey of estate agents by Hometrack.

Prices fell 0.1% from April, while they were 3.7% lower in May than last year, according to latest reports from Hometrack.

European Markets Rise on Greece Talks

The European market indexes edged higher with the market indexes in Greece, Spain and Italy leading the region.

Greece remained the focus of bond investors as the nation hammers out agreement with the International Monetary Fund and the European Union regulators.

The sources in the European Union regulators said Greece is expected to announce austerity measures that will freeze pay of civil servants and delay new hiring for three years and cut capital expenditure plan.

In addition Greece will accelerate its privatization plan that will sell the stake in the utilities companies other government controlled assets. However, opposition party has boycotted the sale.

The International Monetary Fund is also seeking collateral from Greek government as a part of loan agreement.

Serco Acquires Intelenet

Serco Group Plc, the outsourcing and support services provider agreed to acquire India-based business process outsourcing services provider Intelenet Global Services Private Ltd. for up to £385 million, including assumption of Intelenet''s existing debt.

Serco expects the acquisition to broaden its customer and geographic reach and to be accretive to earnings in the first full year.

Brewin Dolphin Buys Tilman

Brewin Dolphin Holdings plc agreed to buy Tilman Asset Management, an Ireland-based private client fund management company, for €20.81 million or £18.3 million.

Brewin Dolphin will also make an additional payment of up to €15 million or £13.2 million in December 2014 based on the performance of Tilman to September 2014.

Software AG Plans to Acquire Metismo

Software AG announced today its acquisition of Metismo Ltd., the British mobile software platform developer. The financial details of the transaction were not revealed.

The company expects the acquisition to aid in moving its business process to a mobile environment.

Gainers & Losers

Alliance Trust Plc gained 0.24% to 382.40 pence after the self-managed investment company said that, during the three months to April 30, the total shareholder return was 5.4% and the NAV total return was 2.9%.

Capita Group Plc rose 1.66% to 735.50 pence after the outsourcing group acquired specialist healthcare recruitment firm Team24 Ltd. for a consideration, on a cash free debt free basis, of £24 million, plus up to a further £2 million depending on Team24''s profit performance in the year to March 31, 2012.

Eros International Plc increased 0.44% to 226.00 pence after the media and entertainment company said fiscal year 2011 revenues climbed 10% to $164.6 million from $149.7 million in the previous year. Profit for the year rose 6% to $44.8 million or 38.1 cents per share compared to $42.32 million or 36.1 cents per share reported a year ago.

GlaxoSmithKline PLC fell 0.04% to 1,316.50 pence.

Tullow Oil plc edged higher 1.13% to 1,343.00 pence after the oil and gas producer is planning for a secondary listing of its shares on the Ghana Stock Exchange and an offering of 4 million Tullow shares in Ghana.