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CORRECT: UK MIDDAY BRIEFING: LSE Prices Rights Issue For Russell Funds

Fri, 22nd Aug 2014 11:38

(An item published at 1133 BST mistsated the amount being raised by the LSE in the first paragraph. The correct version follows.)

LONDON (Alliance News) - London Stock Exchange Group Friday priced the fully underwritten rights issue it is launching with the aim of raising GBP938 million of net proceeds in order to part fund its USD2.70 billion acquisition of the US's Russell Investments.

It is launching the three-for-11 rights issue at 1,295 pence per share. It will issue 74.3 million new shares, about 27% of the group's existing issued share capital and about 21% of the resulting shares in issue. The issue price is a 30% discount to the theoretical ex-rights price based on the closing middle-market price of 2,005.00p per share on Thursday.

The news comes almost two months since the stock exchange revealed its agreement to acquire Russell, which constitutes an index management business and an investment management arm, from Northwestern Mutual, as it looks to scale up its presence in the US, which the group has identified as a key market.

London Stock Exchange wants to combine Russell's index business with FTSE, bringing together USD5.2 trillion of assets benchmarked to Russell and an estimated USD4.0 trillion of equities benchmarked to FTSE. However, London Stock Exchange is reviewing Russell's investment management business in order to determine its fit with the group.

The remaining USD1.14 billion to be paid for Russell will be financed through London Stock Exchange's existing bank debt facilities, including a recently signed additional GBP600 million multi-currency revolving credit facility.

RSA Insurance Group Chief Executive Stephen Hester is continuing his revamp of the company in order to bolster its capital strength, selling the insurance business of its branches in Singapore and Hong Kong to Allied World Assurance Company Ltd for about GBP130 million in cash.

Markets: UK indices have fallen marginally as geopolitical tensions have moved back to the forefront on news that a convoy of Russian lorries with humanitarian aid has crossed the Ukrainian border without an escort from the International Committee of the Red Cross.

US stock futures are pointing to a slightly lower open on Wall Street. The DJIA, S&P 500 and Nasdaq are all indicated to open down up to 0.2%.

FTSE 100: down 0.4% at 6,747.69
FTSE 250: down 0.2% at 15,809.12
AIM ALL-SHARE: up 0.1% at 765.03
GBP-USD: flat at 1.6578
EUR-USD: down at 1.3265
GOLD: up at USD1,282.21 an ounce
OIL (Brent): down at USD102.36 a barrel
Other Top UK Corporate News
Petrofac said Chairman Norman Murray has resigned with immediate effect and will be replaced by Senior Independent Director Rijnhard van Tets. In a statement, the FTSE 100-listed oil and gas services company said Murray has stepped down for "compassionate reasons". Murray had been chairman since May 2011, while Van Tets has been a director of Petrofac since May 2007.
Japanese consulting firm Nippon Koei Co said it was considering its position in the takeover battle for Hyder Consulting, after Arcadis NV agreed with Hyder on Thursday a new GBP288 million deal to buy the firm and bought a 15.6% stake. Hyder Consulting had agreed a GBP256.2 million deal to be acquired by Arcadis in July, but last month Hyder recommended instead a higher GBP268.1 million offer from Nippon Koei. In a joint statement Thursday, Arcadis and Hyder Consulting said they have now agreed a 730 pence cash deal, well above the 680 pence in cash that the Japanese consultancy had offered. Arcadis also bought nearly 6.1 million Hyder Consulting shares.
HellermannTyton, which was promoted to the FTSE 250 in March last year, posted pretax profit of EUR34.6 million for the six months ended June 30, up from EUR21.8 million a year earlier, as revenue rose to EUR292.4 million from EUR267.5 million. On the back of its performance the company increased its interim dividend to 2.82 cents from 1.32 cents. The company's three main divisions - electrical, automotive and data communications - all performed well, with the automotive businesses again leading the way with revenue rising 16% to EUR146.6 million from EUR126.5 million a year earlier.
Magnolia Petroleum is a big gainer after it said net production stood at 257 barrels of oil equivalent per day on July 1, up from 150 barrels of oil equivalent per day on April 1, as wells in which it holds a larger-than-average interest have come into production. Connemara Mining is also doing well after it was awarded a prospecting licence in County Kilkenny, Ireland. Sefton Resources is down after its net loss for the six months to June 30 widened to USD959,000, from a loss of USD253,000 last year, as revenue fell to USD1.4 million, from USD2.2 million on the back of lower production and sales volumes. African Consolidated Resources is also down after it agreed to a further extension to the date on the payments due on the purchase of the Dalny Mine in Zimbabwe and said it is still seeking financing to continue as a going concern. Wildhorse Energy is another faller after it cancelled a rights issue, saying it plans to conduct a review and possible restructuring of its board, operations and strategy. All funds submitted to the company will be returned to subscribing shareholders.
Other Top Economics And General
A UK house price sentiment index rose at the slowest pace in five months in August, results of a survey by Knight Frank and Markit Economics showed. The house price sentiment index, an indicator of house price trends, fell to 61.8 in August from 62.4 in July. However, a reading above 50 indicates that prices are rising. It was the seventeenth consecutive month of increase.
A first group of Russian lorries with humanitarian aid has crossed the border with Ukraine, Russian news agencies reported. The group of 34 lorries arrived at the Izvaryne border post inside Ukraine, Interfax said. Izvaryne is under the control of pro-Russian separatists. The lorries had crossed the border without an escort from the International Committee of the Red Cross (ICRC), thus ignoring a demand made by the Ukrainian government. The Foreign Ministry in Moscow said earlier that is had decided to send the convoy ahead without ICRC escort.
US warplanes Thursday bombarded militant Islamist State targets in northern Iraq despite the terrorist group's threat to kill a captured American journalist. The US military conducted six airstrikes against the al-Qaeda breakaway group near the Mosul Dam, destroying vehicles and bomb emplacements, the Defence Department said. The latest hits have brought the total number of airstrikes to 90 since the US started its aerial campaign in Iraq on August 8.
Islamic State militants cannot be defeated without action against their strongholds in Syria, the top US general said Thursday. "This is an organization that has an apocalyptic end-of-days strategic vision and which will eventually have to be defeated," said General Martin Dempsey, chairman of the joint chiefs of staff. Asked whether the terrorist group that is operating across Iraq and Syria could be defeated without attacks against them in Syria, he said no, but that the cross-border threat must be addressed by a regional coalition "that takes on the task of defeating ISIS over time."
Israeli jets pounded dozens of targets in the Gaza Strip while Palestinian militants continued to fire rockets into southern Israel, with the violence once again gaining momentum after a lengthy ceasefire. Israel's cabinet was reportedly considering calling up 10,000 reservists. Israel withdrew its ground troops out of Gaza early this month, but there have been calls by hardliners in the government to increase the military's operations against Hamas and other militant groups. Three Hamas commanders were killed in airstrikes in south Gaza, as Israel, for what appeared to be the first time in the latest conflict, has managed to hit high ranking members of the group.
The National Guard is to withdraw from Ferguson, Missouri as nearly two weeks of often violent protests have finally waned, Governor Jay Nixon said Thursday. The situation in the St Louis suburb has "greatly improved" since Nixon ordered the Guard to back up state police earlier this week, he said. Only six arrests were logged overnight in the town, which saw a more peaceful night after steady protests related to the killing of an unarmed black teenager by a policeman.
Two US missionaries have left a hospital in Atlanta after what one of them termed a "miraculous" recovery from the Ebola virus. Dr Kent Brantly and health worker Nancy Writebol had recovered from the virus and posed no public health threat, doctors at Emory University Hospital said Thursday. They had been airlifted to the US August 2 for treatment at a special infectious disease unit after first receiving the experimental treatment ZMapp in Liberia.
Afternoon Watchlist (all times British Summer Time)

All Day US Jackson Hole Symposium (Continues on Saturday)
No corporate events are scheduled for Monday due to UK bank holiday

Tuesday's Key UK Corporate Events

Randall and Quilter Half Year Results
Audioboom Full Year Results
Stagecoach Group Interim Management Statement
Antofagasta Half Year Results
Bunzl Half Year Results
Petrofac Half Year Results
Regus Group Half Year Results
UTV Media Half Year Results
WPP Half Year Results

Monday's Key Economic Events (all times British Summer Time)

00:50 Japan Corporate Service Price
09:00 Germany IFO
11:00 UK CBI Distributive Trades Survey
15:00 US New Home Sales

Tuesday's Key Economic Events (all times British Summer Time)

10:00 Italy Consumer Price Index
13:00 Germany Consumer Price Index
13:30 US Durable Goods Orders
14:00 US S&P/Case-Shiller Home Price Indices
15:00 US Consumer Confidence

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