16th Dec 2019 08:00
(Alliance News) - Cineworld Group on Monday announced the CAD2.8 billion, about USD2.1 billion, acquisition of Canadian cinema chain Cineplex.
The offer is for CAD34 per share in cash. Cineplex shares closed in Toronto on Friday at CAD24.01, giving it a market capitalisation of CAD1.52 billion.
Cineworld already has a strong presence across the pond following its acquisition of US cinema chain Regal Entertainment, completed in February 2018. It has a market cap of GBP2.83 billion.
Cineplex is the largest cinema operator in Canada with a 75% box office market share.
Cineworld said the acquisition is expected to be "double-digit accretive to earnings and free cash flow" in the first full year following completion, which it expects to complete by the end of the first half in 2020.
Here is what you need to know at the London market open:
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MARKETS
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FTSE 100: called up 0.3% at 7,377.00
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Hang Seng: down 0.4% at 27,576.81
Nikkei 225: closed down 0.3% at 23,952.35
DJIA: closed up 3.33 points at 28,135.38
S&P 500: closed flat at 3,168.80
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GBP: up at USD1.3406 (USD1.3346)
EUR: up at USD1.1147 (USD1.1123)
Gold: up at USD1,477.92 per ounce (USD1,471.61)
Oil (Brent): up at USD65.12 a barrel (USD64.58)
(changes since previous London equities close)
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ECONOMICS AND GENERAL
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Monday's Key Economic Events still to come
0930 GMT UK CIPS-Markit flash purchasing managers' index manufacturing and services
1100 GMT UK CBI industrial trends survey
1100 GMT Ireland goods exports and imports
1700 GMT UK BoE UK banking system stress test results
0930 CET Germany flash PMI
1000 CET EU flash PMI
0945 EST US flash manufacturing and services PMI
0830 EST US Empire State manufacturing survey
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Boris Johnson is to address his new intake of Tory members of Parliament as they prepare to vote on his Brexit deal and he seeks to transform the nation after his landslide victory. The UK prime minister will welcome the more than 100 newly-elected colleagues, many of them from former Labour areas across the north and Midlands, to the House of Commons on Monday. Johnson will use his majority of 80 to get his Withdrawal Agreement Bill to implement Brexit approved so the UK can formally leave the EU by the end of January. The PM has pledged to bring the Bill back before the Commons before Christmas but it is not yet known when MPs will begin voting on it. Johnson is understood to be preparing to start a minor Government reshuffle on Monday to fill gaps left by departures before making more radical changes in February.
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Britain's government can conclude negotiations on future trade with the EU by the end of next year, senior cabinet minister Michael Gove insisted. Gove was responding after many politicians and analysts said the government was highly unlikely to meet its target of agreeing a trade deal just 11 months after Britain's planned Brexit on January 31. "Quite a lot of the detail that we need to negotiate is already laid out in the [Brexit] political declaration, so a lot of work has been done," Gove told Sky News. "And, as a number of people have pointed out, there are areas where the EU's interests and the UK's interests are already closely aligned," he added. "So I'm confident that we will be able not just to leave the EU on January 31 but also to conclude all the details of a new relationship in short order."
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House prices in the UK had their smallest monthly decrease in 13 years in December, Rightmove said on Monday, with the analysts adding confidence in the market could improve in 2020 after being dogged by political uncertainty this year. Rightmove predicts the price of property coming to market will rise by 2% in 2020, with the new majority offering home-movers more political certainty. Rightmove Director & Housing Market Analyst Miles Shipside said: "The greater certainty afforded by a majority government gives an opportunity for a more active spring moving season, with some release of several years of pent-up demand. "Given the Brexit track record to date, further political twists and turns should not be ruled out, though with a large majority there is a higher possibility of an end to the series of Brexit deadlines, and the prospect of an orderly resolution." Turning to the December numbers, Rightmove Monthly House Price index showed average house prices fell 0.9% month-on-month. It was the smallest December price decrease since 2006. Year-on-year, December prices rose 0.8%.
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China enjoyed a better-than-expected pick-up in the key retail and industrial sectors in November, data showed, providing a further boost to Beijing after finally agreeing a mini trade pact with the US last week. The readings come at the end of a tough year for the world's number two economy, which is expanding at its weakest rate for three decades as it is buffeted by the long-running trade war with Washington as well as a slowdown in global demand for its goods. Industrial production increased 6.2% on-year last month, up from 4.7% in October and the best reading in six months. There was also positive news for the country's shops, with retail sales up 8.0%, compared with a 7.2% rise the month before.
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Japan's economy stagnated in the fourth quarter, Jibun Bank reported, with services and manufacturing heading in opposite directions. The flash composite purchasing managers' index, reported a week before the final PMI data, stood at 49.8 in December, flat from November. A figure below 50 represents contraction, with a reading above 50 meaning expansion. For December, Japan's flash services PMI improved to 50.6 from 50.3 in November. However, the flash manufacturing PMI eased to 48.8 from 48.9.
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BROKER RATING CHANGES
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DEUTSCHE BANK RAISES SEVERN TRENT TO 'BUY' ('HOLD') - TARGET 2550 (2050) PENCE
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BARCLAYS RAISES SEVERN TRENT TO 'OVERWEIGHT' ('EQUAL WEIGHT') - PRICE TARGET 2400 (2300) PENCE
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BARCLAYS CUTS CRH TO 'UNDERWEIGHT' (EQUAL WEIGHT) - PRICE TARGET 33 EUR
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COMPANIES - FTSE 100
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AstraZeneca said it has divested its commercial rights to schizophrenia and bipolar disorder drugs Seroquel and Seroquel XR in Europe and Russia to Germany's Cheplapharm Arzneimittel. The pharmaceutical firm has received a payment of USD178 million from Cheplapharm, and may also receive future sales-contingent payments of up to USD61 million. Earlier in December, Astra had divested its rights to Seroquel and Seroquel XR in the US and Canada to Cheplapharm, for an upfront consideration of USD35 million.
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London Stock Exchange Group is to revamp management, the Financial Times reported, which will include the departure of the current operations chief. This comes, the newspaper said, as part of an attempt to tackle underperformance at LSEG's trading technology business. Among the changes will be the departure of Chief Operating Officer & Chief Information Officer Chris Corrado, to be replaced by Anthony McCarthy, who is currently information chief at LSEG's LCH clearing house.
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COMPANIES - FTSE 250
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Sports Direct reported a sharp rise in interim earnings amid what it called a tough and challenging retail environment. For the half year ended October 27, revenue rose 14% to GBP2.04 billion from GBP1.79 billion last year and pretax profit more than doubled to GBP193.4 million from GBP74.4 million. The company attributed the sharp rise in profit to the sale and leaseback of the Shirebrook distribution centre for GBP120 million. The company did not declare an interim dividend. Sports Direct said it was on track to complete its store elevation plan - intended to optimise its stores and online operations - by the end of the financial year. "We are hoping that the political waters will be calmer in the coming months which will allow us to move out of this period of market unpredictability," said Chair David Daly.
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Public transport operator FirstGroup said it has been conducting a strategic review of its North American businesses First Student and First Transit and will "formally explore all options" including a potential sale. Turning to the UK, FirstGroup said: "We are actively addressing the cost base of First Bus through a comprehensive efficiency programme, the results of which will be substantially more evident in the second half of the year and beyond. Therefore, the board determined that greater value will be achieved by delivering this margin enhancement prior to any launch of a formal sale process."
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COMPANIES - OTHER MAIN MARKET AND AIM
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Nostrum Oil & Gas said Chief Executive Officer Kai-Uwe Kessel has "mutually agreed" to step down with immediate effect and will be succeeded by Non-Executive Director Kaat Van Hecke.
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Monday's Shareholder Meetings
Sports Direct International (re name change to Frasers Group)
Arc Minerals
Karelian Diamonds
AFI Development
Conroy Gold
Studio Retail Group
RPS Group (re remuneration policy)
AIQ
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By Tom Waite; [email protected]
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