Thursday evening business bulletin

May 15 2008 By Andrew Mernin

Blue chip banks suffered heavy losses on the London market today as fresh fears over Barclays’ balance sheet put the sector under pressure.

Barclays said it was still considering fundraising options - such as tapping shareholders for cash - as it unveiled a £1bn first quarter write-down due to credit market difficulties.

The news - which came just a day after Bradford & Bingley’s shock £300m cash call - hit the sector hard, but the wider FTSE 100 Index shrugged off the bank woes to close up 35.8 points at 6251.8.

A choppy early session on Wall Street saw the Dow Jones Industrial Average swing between positive and negative territory as US Federal Reserve chairman Ben Bernanke gave a speech at a banking conference in the US. A brief rally lent support to the Footsie in the closing hour.

Billionaire entrepreneur Sir Tom Hunter today lost a legal bid to prevent garden centre chain Dobbies raising £150m from shareholders.

Sir Tom - who owns 29.9% of the chain - was hoping 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 Dobbies after a £155.6m takeover last year and is underwriting the issue of new shares, meaning it will buy any not taken up by existing investors.

It will cost Sir Tom’s West Coast Capital (WCC) investment vehicle around £40m to buy the extra shares and maintain its stake in the business, which could otherwise fall to around 15%.

Today the Scottish Court of Session refused WCC’s attempts to gain an interim order blocking the open offer.

Dairy Milk maker Cadbury today said higher prices left it on course to beat targets for the first six months of the year.

The group, which rebranded from Cadbury Schweppes earlier this month after spinning off its drinks arm, has been upping its prices to combat soaring commodity costs this year.

Cadbury - the world’s second largest confectionery firm - said interim revenues growth was on track to be above management goals of between 4% to 6%. Cadbury shares rose 5% as investors cheered the upbeat performance so far in its first half.

The group has sought to push through higher prices to combat 5% to 6% rises in commodity costs, but to the detriment of its market share.

The pound at 5pm was US$1.9491 compared to US$1.9446 at the previous close while the euro at 5pm was £0.7948  compared to £0.7954 at the previous close.