Friday evening business bulletin

Jul 4 2008 By The Journal

London’s FTSE 100 Index fell nearly 1% today as fresh fears surfaced over the banking sector and weak metals prices held back miners.

The top share index dropped 41.7 points to 5434.9 by mid-session trading, with the focus falling on beleaguered banks amid more fears for the sector and as the Bradford & Bingley fundraising saga took a new twist.

An otherwise quiet day for corporate news provided little distraction away from financial stocks, while Wall Street is also out of action for the July 4 holiday weekend.

In London, Bradford & Bingley was the worst hit bank, down nearly 9% after being forced into another overhaul of its cash-raising plans.

B&B’s private equity investor Texas Pacific pulled out of its fundraising plans overnight after the bank was downgraded by ratings agency Moody’s.

The bank’s major shareholders have stepped in to support an enlarged rights issue, but shares still fell 5.5p to 55.5p in the FTSE 250.

The rest of the sector was on the back foot after Goldman Sachs said European banks could have to raise billions more in funding.

News that UBS was only saved from another hefty loss in the second quarter by a 3 billion Swiss franc (£1.5bn) tax credit also failed to offer reassurance.

Top flight bank Barclays sunk 10p to 282p and Royal Bank of Scotland was off 5.75p at 207.25p.

Broadcasting giant BSkyB is mulling a £2bn bid for Spanish pay TV platform Digital+, a report said today.

Sky is said to be looking at the group, owned by Prisa, as it seeks to build its presence in continental Europe, according to the Financial Times.

A deal to buy Digital+ would mark BSkyB’s first move outside of the UK and Ireland for more than eight years.

The firm’s last foray overseas ended with a £985m write-down.

BSkyB took the hit on a minority 22% stake bought in 1999 in German subscriber television service KirchPayTV, which collapsed when its parent company went into liquidation.

BSkyB declined to comment today, but the FT reports that the group is looking at tabling a bid for Digital+ when owner Prisa kicks off an anticipated auction.

Prisa is reportedly putting Digital+ up for sale in early autumn to repay debts.

It is also reported that Rupert Murdoch’s News Corp media conglomerate, which owns a 39.1% stake in Sky, had been eyeing Digital+.

Transport firm Stobart Group said it was extending the option to purchase Carlisle Airport for a further six months at a cost of £50,000. Carlisle-based Stobart proposed in March to enter into an option to acquire the airport for up to £15m.

It wants to upgrade the airport’s facilities and build a new logistics centre.

The pound at 4pm was US$1.9819 compared to US$1.9812 at the previous close while the euro at 4pm was £0.7919  compared to £0.7923 at the previous close.