Marconi Suspension Stretches LSE
Memory for Precedent (Update1)
By David Tweed
London, July 4 (Bloomberg) -- Marconi Plc's request that its
shares be suspended from trading on the London Stock
Exchange pending a statement about its business was so unusual
for a FT-SE 100 company that the LSE couldn't pinpoint the last
time it received such an application.
``We think it's Freeserve in December (of) last year,'' said John
Wallace, a spokesman for the LSE.
Marconi, the U.K.'s biggest phone-equipment manufacturer,
requested before trading began today that its shares be
suspended, saying its board was meeting to discuss the state of
its business and that afterward it would make an announcement
on the outlook.
Speculation that Marconi would announce lower sales or job cuts
heightened concern about the prospects for other European
communications-equipment makers. That triggered drops by
Alcatel SA and Ericsson AB, both of which fell more than 6.5
percent.
``There's no doubt this had had an impact on the industry
generally,'' said Ian Van Stratum, a hedge-fund manager at Saphi
Asset Management. ``It doesn't really make any difference for
investors in Marconi. The shares will either fall today or they fall
tomorrow, assuming it's bad news.''
Freeserve
Freeserve Plc, which left the FT-SE 100 in October, asked that its
shares be suspended Dec. 6, before the announcement of its
takeover by Wanadoo SA, France Telecom SA's Internet arm.
The shares resumed trading by mid-morning that day.
Smaller U.K. companies whose shares have been suspended
recently include Future Internet Technologies Plc, an Internet
company which didn't trade between Nov. 7 and March 7, when it
was in talks about a takeover. E-district.net Plc, the owner of an
interactive television channel, was suspended Feb. 19 while an
audit was carried out and slid 90 percent when trading resumed
June 18 after police said they were probing fraud allegations.
Future Internet and E-district are listed on the Alternative
Investment Market, a part of the LSE reserved for smaller
companies.
U.K. companies have the right to request a share suspension to
avoid undue speculation pending announcements that may
influence stock prices, Wallace said.
``When we look at our data on suspensions, we find so much
information about automatic suspensions for breaching trading
limits and the like that we haven't been able to find when the last
time'' a member of the U.K.'s benchmark index asked that its
shares be withdrawn from trading pending a statement, Wallace
said earlier.
The Financial Services Authority, which oversees U.K. stock
listings, declined to comment on the Marconi suspension.
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(Acatel closed at 22.90 Euro, down 7.47%, on volume of 13,462,264) |
