Markets lose confidence as companies struggle
National Express share price dropped 15% yesterday as it announced that takeover talks with rival transport company Stagecoach Group had broken down.
Chris Bradshaw
shareprices.com - Friday, October 30, 2009
The proposed deal would have left existing shareholders with a 40% stake in the new company. This recent invited takeover approach follows a recent unsuccessful hostile bid from a Spanish family owned investment company. National Express is heavily in debt but holds significant school contracts in North America as well as being the biggest bus operator in Spain. It also has three UK rail franchises. Fundraising plans are to be announced in November.
Petroleum giant Royal Dutch Shell announced a significant 62% fall in third quarter earnings to £3.25bn and warned that a quick recovery in energy demand and prices was 'unlikely'. In response to falling demand, the company is to shed 5,000 jobs (5% of the workforce) and implementing cost cutting measures aimed at saving $1bn per year. Jason Kenney an analyst with ING Wholesale Banking, rates the stock as a 'hold'. The markets responded badly to the news and the share price dropped 3%.
Directories publishing company Yell has extended its debt restructuring deadline by a further 24 hours to allow more lenders to accept the current proposals. Over 1,000 lenders have already accepted the plan but a further 5% of lenders are needed to reach the acceptance threshold of 95%. If they do not get approval under this arrangement then they would have to seek a court approval for a Scheme of Arrangement – but that could take up to eight weeks. Yell is seeking to raise £500m to stabilise its financial position and avoid breaching banking covenants in January. After dropping 12p on Wednesday, the share price dropped a further 1p in early trading on Thursday to stand at 45.12p.
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