This morning was looking a little quiet until Prudential dropped Egg. Most of it has landed on its own face, however. Pru is selling the online bank to Citigroup for £575m in cash. This may be a respectable two times book value, but it comes about a year after the Pru itself valued the loss-making online bank at almost £1bn when it bought in the 21 per cent it did not already own for £200m. The Pru was even offered about £1bn from Royal Bank of Scotland, and Citigroup, two years ago. To make matters worse, the Pru has come out with new business figures today which, although better than some had feared, look weak next to L&G and St James’s Place last week. The Pru’s shares rose 2 per cent after the announcements but this must be because it looks more like a takeover target. Our reporters listening to the conference call with chief executive Mark Tucker think he sounded very defensive. With reason.
Alliance Boots, struggling to scratch growth out of its domestic market, is moving into China with a joint venture with Guangzhou Pharmaceuticals Corporation, the country’s third largest pharmaceutical wholesaler.
Shares in consumer debt advisers continue to plummet today, providing us with a good topic to get stuck into. Accuma on Friday warned of slower growth in its individual voluntary arrangement business and saw its shares halve. This morning, the stock is down another 20 per cent. Debt Free Direct also warned on Friday but, although its shares had fallen a bit after the Accuma statement, its news came after the market had closed. This morning, its shares are down 34 per cent. Both Accuma and Debt Free Direct blamed increased resistance from the banks, though why anyone was surprised is a mystery. Debts.co.uk, down 4 per cent this morning, issued a very defensive statement this morning saying it was doing just fine. Debtmatters is off 26 per cent this morning but no statement yet.
We’ll also return to Jim Pickard’s fascinating story this morning about new data showing the commercial property boom may be at an end. Analysis by Lambert Smith Hampton of every deal done in the second half of 2006, covering £27.5bn of transactions, shows that yields have started to tick back up again after falling for the last five years. We’ll see if others agree and to what extent it is reflected in behaviour on the ground.
Greene King, the brewer and pub operator, said turnover was in line with expectations for the 36 weeks to Jan 7. As our online news editor, Andy Slade, put it in our morning editorial conference, like others who are giving up smoking, Greene King is turning to food.
LSE watch: the shares are slipping again. This morning they fell back to about £12.80.
Rumour of the day: SABMiller shares are off a touch on rumours Neil Hume is picking up that Altria (owner of Philip Morris and Kraft) may soon announce it is selling its 29 per cent stake in brewer.