News

London has made a subdued start to the week, with share prices generally lower in light trading.

News that one potential bidder for HBOS has abandoned the attempt to thwart the mortgage lender's agreed merger with Lloyds TSB has sent both banks lower. Financier Jim Spowart has abandoned attempts to engineer a rival bid for HBOS after receiving no political support for his plans, which would have focused on retaining jobs at HBOS.

Life groups are also mixed on a report that accounting changes will hit companies that write large amounts of annuity contracts such as Prudential, Legal & General and Aviva.

Supermarket giant Tesco is on offer after a JP Morgan research note which suggested that the company had misjudged its response to the threat from cut-price rivals such as Aldo and Lidl.

The housebuilding sector is lifted by rumours that private equity groups are sizing up heavily indebted Taylor Wimpey as a possible take-over target.

Week-end bid speculation also lifts cash-strapped Premier Foods, with United Biscuits rumoured to have tabled a £250m bid for the Branston pickle and Hovis bread maker.

Inter-dealer broker Tullet Prebon is firmer after US bank Citigroup upgraded the stock from "sell" to "buy" as it believes "market fears of volume declines across the board may be overdone." Tullet's larger rival ICAP moves up in sympathy.

Elsewhere, specialist thermal processing company Bodycote said performance in the second half of the year will be modestly below previous expectations as it reduced its share buyback offer.

Online gaming group 888 Holdings said trading in the fourth quarter has started slowly with daily averages below third quarter levels. However, trading during the first nine days of November was better than October, driven primarily by Casino and Bingo, with an increase of about 8% above October.

Ultra Electronics said trading to date in the second half has been in line with expectations, adding that the recent strengthening of the US and Canadian dollars against sterling, if sustained, would benefit the defence firm's results. The gain in 2008 would be small but with the potential of a larger benefit in 2009, the group said.

Gem Diamonds said given the weakening diamond prices and uncertainty over the global financial situation, performance for 2008 will be significantly lower than expectations and could result in a loss for the full year 2008.

Insulation board and panels maker Kingspan's underlying profits this year will fall by 33% after a further contraction in the UK and Irish construction sectors. Kingspan added it would also take €25m of one-off restructuring costs this year.

Vehicle replacement group Accident Exchange warned that profitability for the six months ended 31 October will be significantly below management expectations due to the slowdown in referrals and shorter rental periods experienced in the second quarter.

Online fashion retailer Asos more than doubled revenues in the half year to September with sales still going strong into the second half. Sales for the 6 months to 30 September 2008 rose 107% to £65.7m while profit before tax for the same period was up 68% to £4.1m.

Structural steel supplier Severfield-Rowen is to set up a new India-based joint venture with JSW, the third largest steel company in India, with a capacity of about 5m tonnes and plans to expand to 32m tonnes by 2020.

Trio Finance, a closed-ended real estate investment company, shoots up after announcing it is launching a tender offer at $5.61 a share to return up to $44.9m in cash to shareholders. The company, which had invested in real estate debt including mortgage backed securities, has sold all its realisable assets and is now entirely in cash.

UBC Media said the last six months has been "extremely challenging" as the radio group discontinued loss-making ventures and increased losses for the period. The group discontinued its loss-making Cliq mobile phone download service and cut its exposure to digital radio.