BSkyB rebounds after News Corp decision as Footsie closes higher
FTSE: 5,904.19 (+35.23) Mid-250: 11,841.47 (+63.45) Small Cap: 3,276.59 (+1.17)
CONFIRMATION THAT News Corporation dropped its bid to take full control of British Sky Broadcasting sent shares in the pay-TV company on a volatile run yesterday.
Having hit a year-low of 663½p after news of the demise of the deal broke it bounced back as traders considered their response to the news and took account of the underlying fundamentals of the business.
In a statement issued after the television reports of the development were first carried on Sky News, News Corporation’s Chase Carey, deputy chairman, president and chief operating officer, said: “It has become clear that it is too difficult to progress in this climate. News Corporation remains a committed long-term shareholder in BSkyB. We are proud of the success it has achieved and our contribution to it.” Shares in News Corp rose 2 per cent to $15.69.
Jeremy Darroch, BSkyB’s chief executive, said in a statement to the Stock Exchange: “Since the start of the offer period, BSkyB’s management team has remained fully focused on its strategic and operational priorities . . . With good momentum and a range of options for continued growth, BSkyB is well positioned to increase earnings and cash flow and deliver higher returns for shareholders.”
In closing trade, shares in BSkyB, the UK’s biggest commercial broadcaster by market value,rose 2 per cent to 673.9p.
Exposure by Burberry to emerging markets drove first quarter revenue up 34 per cent. Its shares rose 6.5 per cent to £14.84, at the summit of London’s benchmark index.
Marks and Spencer fell 2.5 per cent to 362½p after it said its outlook for the UK high street remained “cautious”.
Clothing chain Next ended flat at £24.08. Wm Morrison, a supermarket chain, fell 0.8 per cent to 296.1p. Tesco, the UK’s biggest retailer by market share and market value, slipped 0.1 per cent to 407.8p.
It was a similar picture on the FTSE 250. Home Retail, the owner of the Argos household goods shops, fell 1.4 per cent to 150.6p. Mothercare, the baby goods specialist, lost 1.9 per cent to 409.3p and department store chain Debenhams lost 1.5 per cent to 66.6p. But Supergroup, the fast-growing fashion chain rose 21 per cent to £10.43p.