Newspaper article The Evening Standard (London, England)

JPMorgan Puts Dent in Royal & Sun Bid Hopes

Newspaper article The Evening Standard (London, England)

JPMorgan Puts Dent in Royal & Sun Bid Hopes

Article excerpt


JPMORGAN has poured cold water on suggestions Royal & SunAlliance maysoon find itself the target of a bid.

Shares in the insurer have performed strongly in the past couple of months butthe US investment bank sees that as a reason to downgrade them from overweightto neutral. It admits they should continue to be supported by talk of atakeover, and concedes RSA would make an attractive bid target. However, itsays that at the current price, down 1p at 154.8p, the company remains at asignificant premium to its adjusted book value of 140p.

JPM adds that competitors may prefer to grow their businesses organically, asbuying RSA would involve large amounts of goodwill. It remains positive on thegrowth possibilities in non-life markets outside the UK, but does not expectthis to trigger a re-rating in the short term.

Elsewhere in the insurance sector, Old Mutual firmed 1.2p to 161.6p. The SouthAfrica-based life assurer plans to buy back [pounds sterling]350 million of its own shares.

The purchases will be made in London and Johannesburg.

Share prices in general consolidated their position above 6500 on the FTSE 100despite a lacklustre performance in

New York overnight. The index rose 31.5 points to 6531.9.

A fresh burst of speculative buying hoisted Northern Rock 12.4p to 148p.

HSBC was up 22p at 93312p, reflecting another record-breaking run in Hong Kong.

Credit Suisse has repeated its outperform rating on Inmarsat, 614p ahead at45712p, and raised its target from 460p to 500p on the back of second-quarterresults and an upbeat investor day from the global satellite network operator.

The broker is lifting its 2007 revenue forecast by 3% and profits target by5.4%, with 2008 predictions up by similar amounts.

Goldman Sachs has cut Meggitt, down 312p at 321p, from buy to neutral and saysthis reflects limited scope for improvement to its revised price target of335p, down from 365p. …

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