City File: Jumping on the bandwagon

THE MARKET has decided that MEPC will follow Hammerson, Brixton Estates, Slough Estates et al and jump on the rights issue bandwagon when it reveals half-year results on Thursday.

There are many who feel that MEPC does not need the money, having sold pounds 125m worth of property in the first half of the year. The sales have brought the group's gearing down to 75 per cent.

There is a question mark over MEPC's dividend, with many analysts expecting the company to signal a cut from 20p to 15p.

Significantly S G Warburg, MEPC's broker, is predicting a maintained dividend. The company's shares fell 9p to 426p on Friday, leaving them at a reasonable discount to estimated net assets of 500p. But any purchase could be risky.