Friday lunchtime business bulletin

Jun 13 2008 By Andrew Mernin

Halifax Bank of Scotland jumped 14% today after the City watchdog unveiled new rules for investors who bet on share price falls during rights issues.

The stock fell this week below its discounted offer price of 275p, but the FSA’s proposed measures on ``shorting" during cash calls helped HBOS extend the recovery seen yesterday to rise another 39.25p to 322.25p.

The performance of banking shares was one of few plus points during a downbeat end to the week in London today. The FTSE 100 Index was 46.8 points lower at 5743.7 by mid-morning, with the mood soured by a late sell-off on Wall Street.

Stronger-than-expected retail sales figures meant the Dow Jones Industrial Average ended in positive territory - up 0.5% - but the performance was short of the level seen at the time of London’s close yesterday afternoon.

Some of the biggest fallers came from the financial services sector, with Prudential down 13p at 625.5p and London Stock Exchange off 32.5p at 869.5p.

But the banking sector was helped by the fact that European firm UBS got its rights issue away with strong investor support.

Shop rents are falling at their fastest rate in 15 years, according to a report today that signals yet more gloom for the embattled retail sector.

A report by property consultancy Colliers CRE warned that the high street is facing ``the worst retail market since the early 1990s", with declining rents reflecting the tough conditions on the high street.

Retail rents dropped by 3.1% in the 12 months to May, on a ``real terms" basis, when RPI inflation of 4.2% is taken into account - the largest annual fall since the mid-1990s, said Colliers.

Its annual midsummer retail report also forecasts that rents will fall by a further 15% to 20% in real terms over the next three years.

Dr Richard Doidge, director of research consultancy at Colliers, said: ``We can see that performance in the sector has been very weak and in our view is likely to become worse."

Wales and the West Midlands have seen the steepest rent falls, while Greater London and the South saw rent rises almost at a standstill, said the report.

Sandwich bar chain Eat has been put up for sale with a price tag of up to £150m, it was reported today.

The 92-store group is on the sale block as part of a strategic review being carried out by its owners, according to the Daily Telegraph.

A sale - reportedly in the region of £120m to £150m - could net founder and former hedge fund manager Niall MacArthur a multi-million pound windfall.

Mr MacArthur set up the business with his wife Faith in 1996 and is still understood to hold a 45% stake, despite later selling a 42% holding to private equity.

A deal would be the latest in the sector after a majority stake in sandwich and coffee bar group Pret a Manger was sold to private equity firm Bridgepoint in February - reportedly valuing the business at around £345m.

Eat is said to have hired PricewaterhouseCoopers (PWC) to lead the business review, although PWC declined to comment.

The pound at noon was US$1.9442 compared to US$1.9465 at the previous close while the euro at noon was £0.7882  compared to £0.7922 at the previous close.