London open: Lower despite rush of bid activity

22nd Jun 2009 08:31

Footsie has opened lower despite a rush of possible mergers and takeovers including a £41bn mining tie-up.Swiss-based mining giant Xstrata has confirmed an approach to rival Anglo American over a possible merger, but so far has received a lukewarm response from the London-based, but South African dominated group. In a statement, Xstrata said a merger was "highly compelling" and would provide "enhanced scale and financial flexibility to fund future growth".Lonmin is a big faller as Xstrata could be forced to sell its stake in the platinum miner if it pursues its Anglo ambitions.Royal Bank of Scotland chief executive Stephen Hester is set to be awarded a £9.6m pay and incentives package. The terms have already been agreed by UK Financial Investments, the body that runs the UK government's 70% stake in RBS, the FT reported this morning. Brit Insurance said it has made a proposal to the board of Chaucer in relation to a possible all share offer for the underwriter. The terms of the proposal are 0.23 new Brit ordinary shares for every existing Chaucer share.Property group Segro has reached agreement with Brixton on the financial terms of a possible recommended all-share offer, which could be accompanied by the issue of new shares to raise up to £250m. The possible offer for each Brixton share is 1.750 Segro shares. Independent News and Media, the Irish publisher of the UK's Independent newspaper, said it is considering a deeply-discounted rights issue in order to partly repay a €200m bond that was due to be paid back on 18 May. Life group Aviva has sold its Australian business to National Australia Bank for £452m, boosting its capital surplus by £400m. Total cash proceeds of from the sale are A$925m (£452m) comprising A$825m cash on completion, a dividend of A$40m and A$60m for a net asset adjustment.Mexican silver miner Fresnillo has withdrawn its offer for MAG Silver, saying it is no longer in the best interests of Fresnillo shareholders. The group said its decision reflects the fact that it has not been possible to conclude the independent valuation of MAG required under Canadian securities laws in order to permit the offer to proceed.Great Portland Estates said it received 96.3% take-up on its fully underwritten 8 for 11 rights issue to raise gross proceeds of £175m. The group said it received valid acceptances in respect of 126.7m shares. Bookrunners Credit Suisse Securities and J.P. Morgan Cazenove will procure subscribers for the remaining 4.8m shares.