Newspaper article The Evening Standard (London, England)

RBS Private-Equity Bid Buzz Sets off a Flurry

Newspaper article The Evening Standard (London, England)

RBS Private-Equity Bid Buzz Sets off a Flurry

Article excerpt


TALK of a possible private-equity bid for Royal Bank of Scotlandsinsur-ance businesses thrust the whole sector into the limelight today asinvestors cal-culated that interested private-equity groups would inevitablylook at rival providers as well.

Admiral Group led the pack, up 35p at 8941#2p, with RSA close behind, rising5.4p to 140p. Prudential was 25p higher at 722p with Standard Life 81#4p betterat 261p. RBS climbed as high as 361p before settling at 3543#4p, up 83#4p.

Whitbreads cut-price hotels could be a safe place for investors to rest duringa recession. Thats the theory being pushed by analysts at Citigroup, who arebetting the group will benefit from lower holiday budgets.

People have not tended to sacrifice holidays entirely, instead looking to savemoney on cheaper accommoda-tion, says Citigroup. About 70% of Whitbread profitscome from Premier Inn and only 20% from its pubs/restau-rants business, nowconsisting of Beefeater and Brewers Fayre.

Budget hotels have proved resilient in previous downturns and Citi says therecent fall in Whitbreaddown 181p since the beginning of the yearhas been excessive. It is upping the group to buy from hold but sticking withits 1400p target. With the bank holiday weekend just around the corner, Citisreasoning hit home and Whitbread was 39p higher at 1258p.

In fact, a holiday spirit lifted the whole market and the FTSE 100 rose 54.9points to 6142.2, encouraged by Wall Streets robust performance and strongtrading on most major Asian stock markets. Even so, trading in London was thinwith anecdotal evidence from the trading floors pointing to many investorshead-ing off early before the holiday. Not, we suspect, to their local PremierInn.

Yesterdays rare burst of US opti-mism lifted plumbing supplier Wolse-ley 231#2phigher to 5231#2p. …

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