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U.K. Stocks Are Little Changed; Mitchells Rises, Whitbread Falls

U.K. Stocks Are Little Changed
Bottles of wine rest on shelves at an All Bar One bar, operated by Mitchells & Butlers Plc in London, U.K. Photographer: Chris Ratcliffe/Bloomberg

U.K. stocks closed little changed as gains at Mitchells & Butlers Plc and Resolution Ltd. offset losses in Whitbread Plc.

Mitchells & Butlers jumped 3.8 percent after the Daily Mail said a group of investors may bid as much as 1.7 billion pounds ($2.8 billion) for the pub company. Resolution advanced 2.8 percent as the insurance buyout firm said it plans to buy back 250 million pounds of shares. Rio Tinto Group led basic-resource shares higher, gaining 1.2 percent. Whitbread fell 1.8 percent after a downgrade from Barclays Plc.

The benchmark FTSE 100 Index increased 1.49, or less than 0.1 percent, to 5,864.65 at the 4:30 p.m. close in London. The FTSE All-Share Index also rose less than 0.1 percent, while Ireland’s ISEQ Index slid 0.4 percent after being closed yesterday for a public holiday.

The FTSE 100 lost 1.4 percent last week, its biggest decline in a month, after reports on U.S. employment and factory orders trailed economists’ forecasts, adding to concern that a recovery in the world’s largest economy may be faltering.

“The biggest blue-chip gainer in London is Resolution,” said Anthony Grech, the head of research at IG Index in London. “Investors are clearly seeing today’s news as a vote of confidence in the company. The medium-term risk is that any early strength may well prove too tempting for investors looking to reduce recent losses.”

Retail Sales

In the U.K., a report today showed that retail sales unexpectedly fell in May as consumers’ uncertainty about their jobs and incomes increased, according to the British Retail Consortium. Sales at stores open at least 12 months, measured by value, fell 2.1 percent from a year earlier. That compares with a 5.2 percent increase in April that was spurred by spending over public holidays for Easter and the royal wedding.

Mitchells & Butlers jumped 3.8 percent to 331.9 pence, its largest gain in four months. The Daily Mail reported that the pub owner may receive a cash bid from a group including Irish entrepreneurs J.P. McManus and John Magnier, billionaire investor Joe Lewis and a private equity firm. The newspaper did not say where it got the information.

Resolution rallied 2.8 percent to 308.3 pence after the insurance buyout firm founded by Clive Cowdery announced a share buyback as part of a plan to return 500 million pounds to investors over the next year. The company will purchase stock on the open market from tomorrow, while a further 250 million pounds will be handed to shareholders in the first half of 2012.

Rio, Xstrata

Rio Tinto gained 1.2 percent to 4,199 pence and Xstrata Plc rose 1.1 percent to 1,370.5 pence.

Ashtead Group Plc jumped 3.4 percent to 176 pence as UBS AG recommended investors buy the shares before the construction-equipment rental company reports earnings on June 16. The brokerage said that per-share profit may top analyst estimates by as much as 20 percent.

Findel Plc soared 23 percent to 6.37 pence after the U.K. home-shopping and education supplies company said its full-year results were “robust” and current trading matches its forecast. The company’s annual loss before tax narrowed to 1.4 million pounds from 74.8 million pounds a year earlier.

Whitbread fell 1.8 percent to 1,552 pence after Barclays lowered its recommendation for the owner of the Premier Inn and Costa Coffee brands to “equal weight” from “overweight.”

Hochschild Mining Plc declined 2.3 percent to 488.5 pence after Citigroup Inc. lowered its recommendation for the producer of silver in Peru to “hold” from “buy.” The shares sank 8.5 percent yesterday after Ollanta Humala won the South American nation’s presidential election.

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