Friday lunchtime business bulletin

May 9 2008 By The Journal

The London market was knocked back today as oil continued its record run and investors braced themselves for big losses on Wall Street.

Banks were among the main losers as the FTSE 100 Index mirrored falls for Europe’s major indices and shipped some of the steady gains seen over the past days.

With predictions of a 100 point opening fall for the Dow Jones Industrial Average later today, the Footsie was 92 points down at 6178.8 by mid-morning.

Banks featured heavily on the faller’s board after a downgrade for Barclays by broker Pail International. Shares in the bank were down 13.25p to 449.75p.

Britain’s biggest mortgage lender Halifax Bank of Scotland was also off, losing 21p to 492.5p, with Royal Bank of Scotland slipping 14p to 343.25p. Lloyds TSB was on the back foot, too, losing 15p to 428.75p.

Garden centre chain Dobbies was today set for a legal clash with billionaire entrepreneur Sir Tom Hunter over its plans to raise £150 million from shareholders.

Sir Tom, who owns 29.9% of the chain, is attempting to block an open offer announced by the Midlothian-based group in April to strengthen its balance sheet and fund expansion.

Supermarket giant Tesco owns 65% of the chain after a £155.6m takeover deal last year, although Sir Tom said at the time the deal undervalued the business.

It will cost Sir Tom’s West Coast Capital (WCC) investment vehicle around £40m to take up the extra shares and maintain its stake in the business. If it does not, WCC’s holding could fall to around 15%.

Sir Tom is seeking an interim order to block the proposals, although Dobbies said it would make a "robust defence" of its plans at a court hearing. WCC was unavailable for comment.

Oven maker Aga Foodservice today became the latest firm to signal weakening consumer spending with "mixed" trading so far this year.

The company said orders for its Rangemaster cookers are up more than 5%, but warned sales of Aga cast-iron cookers are expected to be flat in the UK during the first half.

It added cast-iron sales will fall in Ireland, where the market is "very weak".

The pound at noon was US$1.9491 compared to US$1.9548 at the previous close while the euro at noon was £0.7931  compared to £0.7883 at the previous close.