January 17, 2018 / 9:30 AM / 6 months ago

Britain's FTSE edges down, Interserve in post-Carillion scare

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* FTSE 100 down 0.3 pct

* Interserve sink then recoup most losses

* Informa surges on UBM bid

* Melrose sweetens GKN offer

By Julien Ponthus

LONDON, Jan 17 (Reuters) - UK shares edged down on Wednesday with a flurry of corporate news triggering sharp moves, such as for Interserve after the Financial Times reported the UK government was monitoring the contractor in light of the collapse of competitor Carillion.

The blue chip FTSE 100 index was down 0.25 percent at 7,736.82 points by 0815 GMT, broadly in line with the broader European market.

Within small market capitalisations, Interserve saw its shares fall about 10 percent at the open then gradually recoup most of their losses with a more modest 2 percent retreat.

“Comparisons with Carillon are all too easy to make of course”, Neil Wilson, a senior market analyst at ETX capital said, noting however that “in the case of Interserve, the arithmetic doesn’t look anything like as bad as Carillion”.

Informa’s 3.8 billion pounds offer for events organiser UBM also triggered dramatic moves with the latter surging 12.5 percent and the bidder sinking 9.1 percent at the same time.

Shares in luxury brand Burberry posted the second worst performance, losing 6.8 percent after reporting a 2 percent drop in retail revenue for the Christmas quarter.

“Following better than expected sales for the December quarter from Richemont and Hugo Boss, Burberry’s retail performance in Q3 may be seen as a bit disappointing,” said RBC Europe analyst Rogerio Fujimori, who has an “underperform” rating on the stock.

Pearson also sustained heavy losses, down 6.5 percent after saying it planned to cut staff and sell assets in a bid to eke out underlying growth in 2018 while its North American business continued to weigh on performance.

Provident Financial shares seemed set for another session of losses after Tuesday’s 13 percent fall, down over 15 percent.

Broker Liberum cut its price target on the stock and said the risks are still too great to consider owning the stock.

On a more positive note, British engineering group GKN added 0.6 percent after turnaround specialists Melrose MRON.L raised its takeover offer to 7.4 billion pounds after meeting the company’s shareholders.

The bidder, however, lost 1.5 percent.

Financials were one of the only sectors to add points to the FTSE 100, with Prudential and Standard Chartered up 0.6 percent and 0.9 percent respectively. (Reporting by Julien Ponthus Editing by Jeremy Gaunt)

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