UK Home Prices Rise; Thomas Cook Surges

123jump.com Staff
09 Jun, 2009
New York City

U.K. house prices rise 1.1% in April. BlackRock values investment management unit of Barclays at $13 billion. Thomas Cook majority stake is likely to be auctioned after Arcandor files for insolvency. Greene King acquires 30 pubs at

[R]1:00PM New York, 6:00PM London - U.K. house prices rise 1.1% in April. BlackRock values investment management unit of Barclays at $13 billion. Thomas Cook majority stake is likely to be auctioned after Arcandor files for insolvency. Greene King acquires 30 pubs at £30.4 million from Punch Taverns.[/R]

The benchmark stock index fell fractionally in London despite house prices rising 1.1% according to a government report.

Losses were pared by rising financial stocks on news 10 U.S. banks will pay back $68 billion in bailout funds.

In London trading FTSE 100 fell 0.01% or 0.43 to 4,404.79.

Of the FTSE 100 index stocks, 53 rose, 48 declined, and one was unchanged.

Thomas Cook led gainers in the index shares with a rise of 10% after majority shareholder, German retail giant Arcandor filed for bankruptcy, leaving its stake up for grabs.

U.K. House Prices Rise 1.1%

Department of Communities and Local Government said today the average cost of a home rose 1.1% to £189,215 for the month, while the annual rate of prices declines slowed to 13% from 13.6% a month earlier.

Separately, the Royal Institution of Chartered Surveyors earlier reported that 6% of estate agents in the U.K. said property values rose in May and 42% said prices dropped.

Thomas Cook Majority Stake On Block

Thomas Cook surged 10% after majority stockholder based in Germany Arcandor filed for bankruptcy protection. Arcandor with 52.8% stake in the UK travel group will be forced to sell its stake.

Arcandor was forced to file bankruptcy after the German government denied it a 437 million euro loan. The lead bankers are likely to force the sale of the stake. Germany’s third biggest tour operator Rewe is expected to bid for the stake.

Thomas Cook however said today in a statement its financial position and operational performance is unlikely to be affected by the collapse of Arcandor.

“We remain as a completely independent and separate business, ring fenced from Arcandor. There is no impact whatsoever on our aircraft or our hotel relationships, nor on the holidays that we provide our customers,” said Thomas Cook.

BlackRock Values BGI at $13 Billion

Bloomberg News reported today that BlackRock will buy Barclays’ BGI for $12 billion to $13 billion in cash and stock, with Barclays holding 20% equity in the group.

According to the report, BlackRock is seeking to raise $3 billion from sovereign wealth funds in Qatar and Kuwait.

After the acquisition the U.S. fund manager’s portfolio in assets will grow to $2.81 trillion.

Gainers & Losers

Financial stocks gained on the news that ten U.S. banks will be allowed to repay the U.S. $68 billion rescue funds in order to slacken the Treasury’s hold on the banks.

Royal Bank of Scotland gained 2.3% to 36.10 pence.

Barclays increased 2.2% to 290 pence on the news that BlackRock will pay $13 billion in cash and stock for BGI.

Lloyds Banking increased 3.1% on reports the lender, which owns Cheltenham & Gloucester, will shut down the mortgage provider’s 164 branches and axe 1,660 to cut costs.

Commodity stocks advanced on optimism on the state of the global economy. Gold prices rose $8 to $957.90 per ounce and crude oil prices increased to $69 a barrel.

Vedanta Resources rose 2.3% and Xstrata edged up 1.8%. Balfour Beatty Plc increased 4.3% to 344 pence.

Greene King Plc increased 1.3% to 421.25 pence after it agreed to acquire 11 pubs from the highly leveraged Punch Taverns Plc for 30.4 million pounds compared to its book value of 32.4 million pounds.

Punch Taverns stock fell 1.1% to 155 pence as it struggles with 4 billion pounds of debt.

FTSE 100 Index Movers

Of the stocks in the FTSE 100 index, 53 increased, 48 declined and 1 were unchanged.

Aviva PLC decliners in the FTSE 100 index with a loss of 2.82% followed by losses in Cobham PLC of 2.41%, in Compass Group PLC of 2.31%, in Pearson PLC of 2.12% and in British American Tobacco PLC of 1.90%.

Thomas Cook Group PLC led gainers in the FTSE 100 index with a rise of 10.04% followed by increase in Balfour Beatty PLC of 4.32%, in Home Retail Group PLC of 4.13%, in Tullow Oil PLC of 3.96%, in Eurasian Natural Resources Corporation PLC of 3.37%.

Europe Markets Review

In London FTSE 100 Index closed lower 0.43 or 0.01% to 4,404.79, in Paris CAC 40 Index increased 7.07 or 0.21% to close at 3,296.73 and in Frankfurt DAX index lower 6.86 or 0.14% to close at 4,997.86. In Zurich trading SMI decreased 3.05 or 0.06% to close at 5,388.67.