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Daily Mail, London, market report column [Daily Mail, London]
[November 07, 2014]

Daily Mail, London, market report column [Daily Mail, London]


(Daily Mail (London, England) Via Acquire Media NewsEdge) Nov. 07--Jumping into bed with one of the world's biggest media moguls is not a move for the faint-hearted. But audacity is never something that has deserted Phil Bentley, the boss of Caribbean telecoms firm Cable & Wireless Communications.



He endured more than a decade at Centrica, and in January the British Gas boss left the chilly glare of the frost-bitten public and moved to Miami to take charge of the FTSE 250 telecoms firm.

Yesterday marked his first serious gamble at the group – to double its size by paying pounds sterling 1.2bn for a major fibre firm Columbus.


The deal will be funded with pounds sterling 446m of cash, which CWC is raising by selling 9.99pc of new shares and by taking on some more debt.

It also involves joining forces with one of the world's biggest media players.

John Malone, whose Liberty Global firm owns Virgin Media in the UK, will own 13pc of the new company through his own private company. The media mogul will also have a representative on the company's board.

The deal will move CWC into the Columbian market, and also allow it to offer all four telecoms services – mobile, landline, TV and broadband – to customers.

Bentley said the move 'is a game changer for Cable & Wireless'.

But the City wasn't quite as keen. Shares fell as low as 44.86p – a drop of 8pc – before a brief mid-afternoon rally.

But bears roared louder as the closing gong approached, and shares ended the day 7.4pc down, some 3.64p lower at 45.3p – the second largest faller in the FTSE 250.

As well as the City, other critics of the deal included local economists. In a bizarre late twist to the tale, Professor Avinash Persaud, senior fellow at the Peterson Institute for International Economics based in Barbados, wrote an open letter saying that Caribbean governments should block the deal. 'The deal will be a major blow to attempts to improve quality and access to telecommunication connectivity, a critical factor in the region's economic future,' he said.

Maybe the flak 'Miami Phil' received back at British Gas doesn't seem so bad after all.

Some lunchtime enthusiasm from dealers saw the Footsie hit 6573 before giving up its gains to close just 12.01 points better at 6551.15. But over at the FTSE 250 the index slipped 11.20 points to 15,515.13.

Among the blue chips, Randgold Resources was the largest climber after beating expectations in third quarter results and announcing that production would be at the top end of forecasts as a project in the Democratic Republic of Congo pushed forward. Shares, which have tumbled 20pc in the past six months, climbed 309p or 8.2pc to 4074p.

Experian was not far behind, after a big increase in consumer confidence helped the credit checking firm post an 11pc rise in profits. Worries over online fraud also helped drive business. Shares rose 59.5p to 999.5p.

The biggest dipper was RSA – where former RBS chief Stephen Hester now presides – after the insurer's premiums fell by 9pc. Shares cantered down 5pc to finish 24p lower at 460.1p.

Computer games software maker Playtech was forced to rush out a statement saying there was no need to panic despite shares dropping 8.5pc in a day, down 59p to 635.5p. The group has been hit by fears over the Malaysian market.

In the UK, Playtech partners with Genting UK, which is a wholly-owned subsidiary of Genting Malaysia, a large Malaysian multinational. The statement, dashed out with only minutes to go until trading finished, said: 'The company is monitoring the position closely and, regardless of the potential impact of any changes in the Malaysian market, remains confident of meeting the latest market consensus, following the recent third quarter interim management statement, for 2014 and beyond, reflecting the resilience and diversity of the company's business.' The biggest riser among the mid-cap players was healthcare giant Spire, which struck a long term deal with Bupa.

From April next year the pair have agreed a pricing structure all the way out to 2021. It came as Spire said revenue for the full year is expected to be in the range of pounds sterling 825m to pounds sterling 840m.

Shares perked up during the day and finished trading 15.3p higher at 299.3p.

Satellite firm Inmarsat said pre-tax profits rocketed from pounds sterling 14.8m to pounds sterling 65.7m in the last quarter – but only because it wasn't hit by a whopping impairment of pounds sterling 50m like last year.

The group rose to public prominence after it pledged – and then failed – to find the missing Malaysian Airline MH370. Shares didn't head for the stratosphere yesterday but they did at least get off the ground, closing 9p skywards at 699p.

That didn't last long. Quindell – the polarising claims processing firm accused of making up its business model – previously saw shares buoyed after three directors bought pounds sterling 1m of stock, even though they borrowed the money to do so. Yesterday all of those gains were reversed – and then some. Shares shed 9pc to close 12p lower at 120p. The pre-Gotham peak of 660p now feels very distant indeed.

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