Most U.K. Stocks Fall, Led by ITV, Liberty; Lonmin Shares Soar

By Sarah Jones

Aug. 6 (Bloomberg) -- Most U.K. stocks fell, led by ITV Plc, the U.K.'s biggest commercial broadcaster, and Liberty International Plc after the companies posted a first-half loss.

Old Mutual Plc tumbled after the insurer said hedging failures reduced reserves in the American unit. Mining companies limited the retreat after Xstrata Plc made an unsolicited 5 billion-pound ($9.8 billion) bid for Lonmin Plc.

The FTSE 100 Index fell 6.6, or 0.1 percent, to 5,447.9 at 11:47 a.m. in London as two stocks declined for every one that rose. Eight companies from Royal Dutch Shell Plc to AstraZeneca Plc traded without the right to their latest dividends, dragging down the index.

The FTSE All-Share Index slipped 0.1 percent while Ireland's ISEQ Index fell 1.2 percent.

ITV lost 9.3 percent to 42 pence, the biggest decline on the FTSE 100. The broadcaster reported a first-half loss of 1.54 billion pounds ($3 billion) after writing down the value of its broadcasting operations as clients cut advertising spending.

The ``results highlight the challenges facing ITV,'' said London-based analyst Justin Diddams at Royal Bank of Scotland Group Plc in a note to investors. ``The numbers were in line with expectations but the outlook is deteriorating.''

ITV forecast ad sales will drop 10 percent in the third quarter and also cut its interim dividend by half.

Liberty International lost 5.6 percent to 916 pence after the U.K.'s largest shopping-center owner reported a loss in the first half of 426 million pounds after its malls depreciated by 639 million pounds.

Old Mutual

Old Mutual fell 7.5 percent, to 98.4 pence, the steepest decline since January. The U.K. insurer said it will take a 257 million-pound charge because its Bermuda-based annuities unit guaranteed clients' investment returns without properly hedging its risks. The unit may take at least 15 million pounds in additional charges unless stock markets recover, Old Mutual said.

Lonmin paced advancing shares, soaring a record 47 percent to 3,410 pence after Xstrata made a bid of 3,300 pence in cash for each share, 42 percent more than Lonmin's closing price yesterday.

``Despite the recent fall in the platinum price, we believe that the market will see this transaction positively and expect to see other platinum producers trade higher on the back of this,'' London-based analyst Jason Fairclough at Merrill Lynch & Co. wrote in a note to investors.

Anglo American Plc, the world's fourth-biggest diversified mining company, increased 3.5 percent to 2,789 pence. Aquarius Platinum Ltd., a producer of the precious metal in South Africa and Zimbabwe, surged 19 percent to 456.5 pence.

Xstrata added 1.6 percent to 3,250 pence. The company also posted first-half profit that beat analysts' estimates.

The following stocks also gained or fell in the U.K. market. Stock symbols are in parentheses.

Eurasian Natural Resources Corp. (ENRC LN) advanced 39.5 pence, or 4.2 percent, to 989.5 after the Kazakhstan metals producer said first-quarter ferroalloy output rose 2.5 percent to 374,000 metric tons. Ferrochrome output advanced 3.5 percent to 293,000 tons.

F&C Asset Management Plc (FCAM LN) slipped 1.5 pence, or 1.4 percent, to 102.5 after the company, which oversees the oldest U.K. investment fund, posted a 58 percent drop in first-half profit as declining financial markets prompted investors to pull money.

Hunting Plc (HTG LN) rallied 77.5 pence, or 9.8 percent, to 870 after the oil-services provider announced the sale of its Gibson Energy unit to private-equity firms Riverstone Holdings LLC and Carlyle Group for C$1.27 billion ($1.22 billion).

Morgan Crucible Co. (MGCR LN) rose 5.75 pence, or 2.9 percent, to 205.25 after the company, whose ceramics and coatings are used by Ford Motor Co., reported a 5.1 percent rise in first- half profit to 28.8 million pounds, boosted by acquisitions.

Irish companies:

Elan Corp. (ELN ID) fell 30 cents, or 3.9 percent, to 7.32 euros in Dublin. Standard & Poor's Ratings Service changed its outlook on Ireland's largest drugmaker to stable from positive.

To contact the reporter on this story: Sarah Jones in London at sjones35@bloomberg.net.