TNS, GfK Merge; RBS Offering

123jump.com Staff
03 Jun, 2008
New York City

Stocks in London trading manage to close higher after a day of volatile trading led by Royal Bank of Scotland. Bankers estimate strong demand for recent rights offering from RBS. The lender also advanced on market speculation that the Children

[R]1:00PM New York, 5:00PM London - Royal Bank of Scotland surges ahead of rights offering.[/R]

Stocks in London trading manage to close higher after a day of volatile trading led by Royal Bank of Scotland. Bankers estimate strong demand for recent rights offering from RBS. The lender also advanced on market speculation that the Children’s Investment Fund, one of the largest hedge funds will take a sizable stake in the offering.

Market sentiment

In London trading FTSE 100 rose 0.83% or 50.1 at 6,057.70. Of the 103 FTSE stocks 75 gained, 27 declined and 1 was unchanged. Imperial Tobacco led advancers in the index shares with a rise of 13.01% followed by Royal Bank of Scotland increasing 8.30% ahead of the bank’s right issue deadline on Friday.

Taylor Nelson and GfK AG to merge

Taylor Nelson and GfK AG announced in a statement today that both companies have agreed to merge and create a new market information group named GfK-TNS plc.

The companies believe that the transaction will result in “substantial operational efficiencies”, as they both achieved over 5% underlying organic revenue growth in the first quarter of 2008. In exchange for each GfK Share, TNS will offer 11.74 new ordinary shares of TNS with a nominal value of 5 pence.

David Lowden, the current chief executive officer of the company, will be the chief executive of the enlarged entity. GfK Nurnberg, the largest shareholder of GfK with a stake of 56.8% has agreed to the merger.

In addition, Hajo Riesenbeck- who currently is the chairman of the supervisory board of GfK Nurnberg- will chair the combined 14-member board, which will have seven board members from the respective companies. Klaus Wuebbenhorst, chief executive of GfK will join the board as a non-executive director.

Gainers & Losers

Imperial Tobacco led advancers in the FTSE 100 index shares with a rise of 13.01% followed by rises in Royal Bank of Scotland of 8.30%, in Home Retail Group of 6.35%, in Amec Plc of 4.18%, and Standard Life of 3.96%.

Home Retail Group rose after Seymour Pierce raised its rating on the stock from “hold” to “buy”. Other retailers gained as well. Kingfisher advanced 3.50% and Wolseley edged up 2.72%.

Amec also gained after it agreed to provide engineering and project management services for BP’s offshore projects.

Eurasian Natural led decliners in the FTSE 100 index shares with a drop of 5.23% followed by losses in Vedanta Resources of 3.23%, in Persimmon of 2.41%, in HBOS Plc of 2.29%, and Carnival PLc of 1.66%.

Eurasian Natural fell on market rumors that Kazakhmys may sell its stake in the company.

Vedanta Resources and other commodity stocks fell as oil prices dropped. Rio Tinto Plc declined 0.66% and BHP Billiton climbed down 0.87%.

Homebuilders also shed on signs of tightening credit markets. British Land Co. plummeted 0.96%.

Financial stocks also slipped as a result. Alliance & Leicester dropped 0.68%, Barclays slumped 1.44% and Standard Chartered slipped 0.99%.