18th Dec 2019 08:03
(Alliance News) - Educational publisher Pearson has agreed to sell its remaining stake in Penguin Random House, announced a share buyback, and said Chief Executive John Fallon intends to retire.
Pearson said Wednesday it has agreed to sell its remaining 25% stake in book publisher Penguin Random House to partner Bertelsmann for USD675 million, or around GBP530 million.
Pearson said it will launch a GBP350 million share buyback in "early 2020", with the remainder of the proceeds to be used for general corporate purposes. The transaction is in line with Pearson's simplification strategy, the company added.
Separately, Pearson said Fallon intends to step down as CEO. He will retire in 2020 once a replacement has been appointed, with a succession process to consider both external and internal candidates.
"There's a lot still to do but we're making good progress in navigating Pearson through a period of huge change...We're now at the stage where it's time to transition to a new leader, who can bring a fresh perspective," said Fallon.
The stock was up 3.5% early Wednesday.
Here is what you need to know at the London market open:
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MARKETS
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FTSE 100: marginally higher at 7,528.32
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Hang Seng: flat at 27,844.17
Nikkei 225: closed down 0.6% at 23,934.43
DJIA: closed up 31.27 points, 0.1%, at 28,267.16
S&P 500: closed marginally higher at 3,192.52
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GBP: down at USD1.3108 (USD1.3137)
EUR: soft at USD1.1137 (USD1.1152)
Gold: firm at USD1,477.49 per ounce (USD1,476.00)
Oil (Brent): soft at USD65.72 a barrel (USD65.92)
(changes since previous London equities close)
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ECONOMICS AND GENERAL
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Wednesday's Key Economic Events still to come
0930 GMT UK consumer, retail and producer price indices
0930 GMT UK house price index
1000 CET Germany Ifo business climate index
1100 CET EU harmonised consumer price index
1100 CET EU construction output
0700 EST US MBA weekly mortgage applications survey
1030 EST US EIA weekly petroleum status report
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The value of outbound shipments from Japan declined 7.9% from a year earlier to JPY6.38 trillion, or USD58.3 billion, in November for the 12th straight month of fall amid slowing global growth, the government said. Japan's imports dropped 16% to JPY6.46 trillion after a consumption tax hike on October 1, resulting in a trade deficit of JPY82.1 billion, the Finance Ministry said in a preliminary report. Shipments to China, Japan's biggest trading partner, fell 5.4% year-on-year to JPY1.3 trillion, while imports plunged 16% to JPY1.6 trillion, the ministry said. Exports to the US were also down 13% to JPY1.2 trillion, while imports fell 10% to JPY688.4 billion. Earlier this month, Japan's Parliament approved a trade pact with the US that cuts tariffs on farm and industrial goods, paving the way for its entry into force on January 1.
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German producer prices fell at a steeper-than-expected annual rate in November, data from Destatis showed. German producer prices fell 0.7% in November on a year ago, sharper than the 0.6% fall seen in October. Market consensus, according to FXStreet, was for the rate of decline to remain steady at 0.6%. Month-on-month, prices were flat, improved from October's 0.2% fall but again disappointing market expectations, which had called for a 0.1% rise.
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BROKER RATING CHANGES
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CANACCORD INITIATES SAGE GROUP WITH 'HOLD' - TARGET 770 PENCE
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CREDIT SUISSE CUTS SAGE GROUP PRICE TARGET TO 610 (620) PENCE - 'UNDERPERFORM'
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DEUTSCHE BANK CUTS LAND SECURITIES TO 'HOLD' ('BUY') - TARGET 1020 (950) PENCE
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COMPANIES - FTSE 100
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NMC Health hit back at Muddy Waters's report in which it alleged "rot" at the UAE-focused healthcare firm. NMC shares had slumped 32% on Tuesday. NMC "understands" its regulatory disclosure obligations and "has nothing to add to disclosures already made". The company added that it has already responded to many of the allegations made in the report over the past 12 months. "NMC will review the assertions, insinuations and accusations made in the report, which appear principally unfounded, baseless and misleading, containing many errors of fact, and will respond in detail in due course," said NMC. NMC reaffirmed its trading and operational guidance for both 2019 and 2020. NMC also on Wednesday said it will commence a share buyback of up to USD200 million, a move which was approved by shareholders earlier in December.
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Finablr - which ended down 11% on Tuesday - noted "recent volatility" in its share price, and said there was "no financial or operational reason" for this. Travelex owner Finablr was founded by Bavaguthu Raghuram Shetty, who also founded NMC. Shetty is joint chair of NMC Health and also co-chair of Finablr. Finablr said it remains on track to achieve the guidance set out at its IPO, which was reaffirmed in November.
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Plumbing and heating products distributor Ferguson said it has appointed Simon Oakland as interim chief executive officer of Wolseley UK. Oakland - who is currently CEO of Ferguson's Canadian business and head of corporate development, and has also been project managing the Wolseley UK demerger process - replaces Mark Higson, who is stepping down to pursue an opportunity outside of the company. Preparation for the demerger of Wolseley UK is "well underway", Ferguson said, and the company still expects to complete the transaction in 2020. Ferguson will provide an update on the progress and timing of the transaction in the first quarter of 2020.
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Anglo American reported a slight recovery in diamond sales cycle-to-cycle, but the figure represented a double-digit drop compared to the prior year. For the tenth cycle of 2019, the miner's De Beers unit reported diamond sales at USD425 million, up 6.3% from the actual USD400 million in the ninth cycle, but down 22% from USD544 million the same cycle a year before. "Following continued polished diamond price stability in the lead-up to the final sales cycle of the year, we saw further signs of steady demand for rough diamonds during Sight 10," said Bruce Cleaver, chief executive officer of De Beers.
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COMPANIES - FTSE 250
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IntegraFin Holdings said it was "very pleased" with its "solid" set of annual results. Fee income for the financial year ended September 30 was GBP99.2 million, up from GBP91.2 million the year before, with pretax profit rising to GBP56.1 million from GBP46.2 million. Funds under direction amounted to GBP37.8 billion, up from GBP33.1 million a year ago. Gross inflows of GBP5.70 billion were 4% lower than last year and net inflows were down 15%. Separately, the company said Ian Taylor intends to step down as CEO. He will remain an executive director, while Alex Scott will become IntegraFin's new CEO. Scott is currently group director of the company and has been with IntegraFin since 2009.
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COMPANIES - INTERNATIONAL
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Italian-American carmaker Fiat Chrysler Automobiles and France's PSA group, parent company of Peugeot, Citroen and Opel, said they have finalized negotiations on their merger. "Fiat Chrysler Automobiles and Peugeot SA (Groupe PSA) have today signed a binding combination agreement providing for a 50/50 merger of their businesses to create the fourth largest global automotive original equipment manufacturer by volume and third largest by revenue," a joint statement said, adding that the tie-up would not involve any plant closures.
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Alphabet's Google agreed to pay Australian tax authorities AUSD482 million, or USD327 million, to settle a long-running dispute over the tech giant's multibillion-dollar business in the country, officials announced Wednesday. The Australian Tax Office said the payment covered taxes owed for 2008-2018, and brought to AUD1.25 billion the amount recovered from global e-commerce titans including Microsoft, Apple and Facebook. "This settlement is another great outcome for the Australian tax system," said Deputy Commissioner Mark Konza, who has spearheaded the ATO's Tax Avoidance Taskforce.
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The world's biggest smartphone and chipmaker Samsung Electronics issued a rare apology after its chairman was jailed for sabotaging union activities. Chair Lee Sang-hoon and executive vice president Kang Kyung-hoon were both jailed for 18 months for leading a wide-ranging operation to deter staff at Samsung's customer service unit operating a union. Samsung Electronics is the flagship subsidiary of the Samsung group, by far the biggest of the family-controlled conglomerates known as chaebols that have propelled South Korea's rise to the world's 11th-largest economy. Along the way it has fought ferociously against union representation, until local authorities in Suwon, where it is headquartered, last month certified the National Samsung Electronics Union, which is affiliated to a powerful umbrella group.
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Wednesday's Shareholder Meetings
Qannas Investment (re portfolio acquisition)
GCM Resources
Northamber
Carpetright (re re cash acquisition by Meditor Holdings)
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By Tom Waite; [email protected]
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