2007-06-16

Great Britain | National Information Companies Prices and Markets

U.K. Stocks Rise, Paced by Sainsbury, Morrison, Tesco

Great Britain: U.K. stocks rose for the third day. J Sainsbury Plc led shares of retail companies higher after a Qatar-backed fund increased its stake in the supermarket chain.

The benchmark FTSE 100 Index added 27, or 0.4 percent, to 6676.9 in London at 8:59 a.m. The FTSE All-Share Index gained 0.4 percent to 3451.10. Ireland's ISEQ Index rose 0.8 percent to 9583.61.

Sainsbury climbed 4.7 percent to 591.5 pence. Delta (Two) Ltd., a Qatar-backed investment fund, raised its stake in the company to 25 percent after acquiring an additional 7.1 percent of the stock.

``These guys will want a say in what happens at the company and will want a better balance sheet,'' said James Bevan, who helps manage $8.9 billion as chief investment officer at CCLA Investment Management Ltd.

``We shouldn't assume that just because companies take big stakes they have predatory intentions. They may just want a bigger say in how the company is run,'' Bevan said.

William Morrison Supermarkets Plc, the fourth-biggest U.K. food retailer, rose 3.3 percent to 310.75 pence. Tesco Plc, the country's largest retailer, jumped 1.5 percent to 459.5 pence.

``Morrison has struggled to digest Safeway so it's seen as vulnerable'' to a takeover, said Kevin Lyne-Smith, managing director at Julius Baer Holding AG in Zurich, which oversees $260 billion.

``An ex-U.K. retail buyer or private equity is always a possibility but the U.K. is a tough market with two 800- pound gorillas, Tesco and Asda, dominating,'' he said.

Separately, Panmure Gordon & Co. raised its recommendation on Morrison to ``hold'' from ``sell.''

``Morrison is not as attractive a proposition as Sainsbury, either in terms of earnings or assets,'' the bank wrote in a research note.

``That said, the news of stake-building in Sainsbury is likely to ensure that the market focuses on property assets once more.''

The following stocks also gained or fell in the U.K. market. Stock symbols are in parentheses.

U.K. Companies:

D1 Oils Plc (DOO LN) gained 8 penc, or 4 percent, to 208. The U.K.-based maker of biodiesel fuel said it noted the recent gain in the company's share price and said talks were reaching an ``advanced stage'' regarding a ``strategic collaboration.''

Ensor Holdings Plc (ESR LN) added 2 pence, or 5.3 percent, to 39.5. The U.K. construction and roofing company reported full-year revenue of 28.3 million pounds, up from 26.7 million pounds.

Lonmin Plc (LMI LN) gained 140 pence, or 3.5 percent, to 4117. Morgan Stanley raised its share-price estimate on the world's largest platinum producer to 5075 pence from 3900 pence.

``We maintain our very bullish call on platinum, and expect the sector to continue to outperform,'' the bank wrote in a research note.

Royal Dutch Shell Plc (RDSA LN), Europe's largest oil company, gained 11 pence, or 0.6 percent, to 1971. BP Plc (BP/ LN), the second-largest, climbed 2.5 pence, or 0.4 percent, to 585 pence. Crude oil traded near a nine-month high in New York after a drop in U.S. refining raised concern that fuel supplies may remain below average.

Sanctuary Group Plc (SGP LN) gained 2.25 pence, or 13 percent, to 20. Vivendi SA's Universal Music Group, the world's largest record company, agreed to buy Sanctuary Group Plc for 44.5 million pounds ($88 million) to add artists including The Kinks and Black Sabbath to its catalogue.

Speedy Hire Plc (SDY LN) increased 40 pence, or 3.1 percent, to 1315. UBS AG raised its recommendation on the U.K.'s largest tool-rental company to ``buy'' from ``neutral,'' citing the acquisition of Hewden Tools.

``We believe this is a good deal for Speedy since it gets exposure to significant earnings upside at an attractive price,'' the bank wrote in a research note.

Tullow Oil Plc (TLW LN) increased 20.75 pence, or 5.3 percent, to 415.75. The explorer for hydrocarbons on three continents surged for a second day after the company said it's drilling an appraisal well in Uganda.

William Ransom & Son Plc (RNSM LN) gained 4 pence, or 8.9 percent, to 49. The U.K.'s oldest independent pharmaceutical business reported full-year net income of 1.28 million pounds from 746,000 pounds.

Irish Companies:

Irish Continental Group Plc (IR5A ID) added 35 cents, or 1.7 percent, to 20.85 euros. One51 and Doyle Group Ltd. have agreed to offer 22 euros ($29) a share for Irish Continental Group Plc, valuing Ireland's largest ferry operator at 560.9 million euros.

Sarah Thompson Bloomberg - 2007-06-16