Pound Falls, Page Rejects Adecco Offer

123jump.com Staff
15 Aug, 2008
New York City

UK stocks declined as weakness in oil and metals prices dragged benchmark index lower. Anglo American, BHP Billiton and Rio Tinto declined between 4% and 6%. Michael Page dropped 5% after it rejected an offer from Adecco SA that valued the company at $2.4 billion or 400pence a share. The pound dropped for the second week in a row as interest rates are likely to decline on weakening economy. The pound dropped 1% before recovering to close 0.3% lower in the session and lost 3% in the week.

[R]1:00PM New York, 6:00PM London - Tourist arrivals in UK fall 5% to 8.1 million in the quarter to June.[/R]

London stock indexes slumped tracking the retreat of oil and metal prices. In particular, gold prices fell the most since December 2007 to below $800 per ounce. However, an interest in homebuilders and retailers helped trim market losses.

Market Sentiment

In London trading FTSE 100 dropped 0.77% or 42.6 to 5,454.80. Of the 102 FTSE 100 stocks 55 rose, 46 declined, and 1 was unchanged. Wolseley led advancers in the index shares with a rise of 6.82% followed by Ferrexpo soaring 4.26%.

Tourist Arrivals in the U.K. Fall 5%

The Office of National Statistics reported on its Web site yesterday that the number of visits to the U.K by overseas residents fell by 5% in the quarter to June. Seasonally adjusted arrivals declined to 8.1 million from 8.5 million in the previous month, while earnings remained flat at £4.1 billion.

Also visits by U.K residents to overseas destinations dipped 1% to 17.7 million, while spending dropped by 2% to £9.1 billion.

The ONS said in the year to June 2008, the number of visits by overseas residents to the UK slid by 3% to 33.5 million from 32.5 million a year ago.

Arrivals from Europe declined 2% to 23.6 million, and those from North America slipped by 8% to 4.3 million, and visits from other parts of the world declined by 1% to 4.6 million.

On the other hand, in the year to June 2008, visits by U.K residents abroad gained 1% to 70.6 million from 69.8 million a year earlier.

In addition, visits to Europe edged up 1% to 55.7 million, while those to North America remained flat at 4.7 million, and visits to other parts of the world rose by 3% to 10.2 million.

Michael Page Rejects Adecco Bid

Michael Page reported on its Web site today that the company has rejected the bid from Adecco to acquire the entire share capital of the firm at 400 pence per share in cash.

According to the company, the offer “materially undervalued” the company and its prospects, and the interests of the shareholders and employees could be better served if it remained as an independent entity.

After the rejection of the proposal by the company, further discussions were held at a senior level between the parties, but Adecco has not yet increased its offer.

Michael Page will engage the Takeover Panel in order to craft a formal timetable under which Adecco must either announce a firm intention to make an offer for the company or announce that it does not intend to make an offer.

Gainers & Losers

Wolseley led advancers in the FTSE 100 index shares with a rise of 6.82% followed by rises in Ferrexpo of 4.26%, in First Group of 4.21%, in Marks & Spencer of 3.86%, and Carnival Plc of 3.55%.

Other homebuilders gained as well. Hammerson edged up 2% and British Land Co gained 2.01%. Retailers increased. Next surged 2.78% and Sainsbury advanced 1.25%.

Kazakhmys led decliners in the FTSE 100 index shares with a fall of 7.05% followed by losses in Eurasian Natural of 6.47%, in Anglo America of 6.43%, in Xstrata of 5.64%, and Antofagasta of 5.06%.

Kazakhmys declined as crude oil prices for September delivery fell by 1.6% to $113.20 per barrel.

Copper prices also fell 1.8% to $7,250 a metric ton, while nickel, tin and zinc prices also declined. Tullow Oil tumbled 5.06%, Rio Tinto plunged 4.06% and BHP Billiton shed 3.35% as a result.

Europe Markets Review

In London FTSE 100 Index closed lower 42.60 or 0.77% to 5,454.80, in Paris CAC 40 Index increased 32.71 or 0.74% to close at 4,453.62 and in Frankfurt DAX index higher 3.81 or 0.06% to close at 6,446.02. In Zurich trading SMI increased 29.47 or 0.41% to close at 7,235.93.