Speculation of corporate activity at broadcaster ITV and retail giant GUS could not relieve the pressure on the London market this morning.
ITV shares surged 7% on a report that Goldman Sachs Capital Partners and Apax Partners had made an approach that would see a radical restructuring of the business.
Although GUS was also higher on a rumoured approach for its Experian credit checking arm, an exodus of investors from the banking and insurance sector meant the FTSE 100 Index stood 25.2 points lower at 5966.1 in the first hour of trading.
ITV lifted 8.75p to 125.75p as investors felt there was truth in a report that a private equity consortium was working with former BBC director general Greg Dyke on a bid.
The market was also confident that Argos owner GUS could field more approaches from US-based private equity firms for its Experian unit after it was said that US-based firms Bain Capital and Thomas H Lee recently had a £7bn proposal rebuffed. GUS improved 3% or 31p to 1123p.
But investors trimmed positions in the insurance sector after an exciting start of the week saw Prudential shares shoot up in the wake of its rejection of a £17bn merger plan with rival Aviva.
Prudential faded 14p to 727.5p today and Aviva eased 9p to 821p – mirroring the rest of the sector where Legal & General dipped 0.75p to 144.25p and Friends Provident weakened 0.25p to 216.25p.
References: EGi News 22/03/06
