11th Nov 2015 08:20
LONDON (Alliance News) - Mergers and acquisitions gave London stocks a boost early Wednesday, as AB InBev-SABMiller and ICAP-Tullett Prebon confirmed their respective combinations.
SABMiller confirmed it has struck a deal to be acquired by bigger rival Anheuser-Busch InBev for around GBP70.0 billion, consolidating the latter's position as the world's biggest brewer by some distance.
Anglo-South African SABMiller also said it has struck a deal to sell its stake in the MillerCoors joint venture in the US to Molson Coors, its partner in the company. It is selling the stake to help pave the way for regulatory approval to be given for the takeover, though further remedies are likely to have to be offered as the combined group will control about a third of global beer volumes.
The pair entered into talks in October, and SABMiller rejected a couple of bids from AB InBev before agreeing in principle to a 4,400 pence per share bid, which is where formal takeover deal has been agreed. The stock was quoted up 1.5% at 4,036.00p at the open Wednesday.
Interdealer brokers Tullett Prebon and ICAP reached an agreement for Tullett to buy ICAP's voice broking and information business in a deal which will see ICAP and its shareholders own a majority of Tullett.
Under the terms of the offer, Tullett will issue shares to ICAP shareholders and to ICAP in consideration for the acquisition. The new shares will represent a 56% stake in Tullett's enlarged share capital and ICAP shareholders will own 36% of the company, while ICAP itself will own 20%.
ICAP shares were up 4.2%, while Tullett was trading down 2.0%.
Here is what you need to know at the London market open:
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MARKETS
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FTSE 100: up 0.2% at 6,290.27
FTSE 250: up 0.4% at 17,105.48
AIM ALL-SHARE: up 0.1% at 744.68
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Hang Seng: closed down 0.2% at 22,352.17
Nikkei 225: closed up 0.1% at 19,691.39
DJIA: closed up 0.2% at 17,758.21
S&P 500: closed up 0.2% at 2,081.72
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GBP: up at USD1.5164 (USD1.5110)
EUR: up at USD1.0743 ( USD1.0688)
GOLD: down at USD1,091.12 per ounce (USD1,092.35)
OIL (Brent): soft at USD47.13 a barrel (USD47.44)
(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
(all times in GMT)
09:30 UK ILO ILO Unemployment Rate and Average Earnings
10:30 UK BOE Governor Carney speech
12:00 US MBA Mortgage Applications
13:15 EU ECB President Draghi's Speech
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China's industrial production growth slowed unexpectedly in October, while retail sales grew at a faster pace, data from the National Bureau of Statistics revealed. Industrial production climbed 5.6% on a yearly basis in October after increasing 5.7% in September. Economists had forecast it to rise 5.8%. At the same time, annual growth in retail sales edged up to 11% in October from 10.9% in September. This was the fastest growth seen so far this year. Sales were expected to climb 10.9% again in October.
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Chinese internet giant Alibaba made USD5 billion in the first 90 minutes of the country's "Singles Day" online shopping binge on Wednesday, defying fears of an economic slowdown in the world's second-largest economy. Alibaba, a collection of businesses that concentrate on online shopping, saw more than 70% of those sales come from its mobile sites, showing that both online shopping and smartphone use have become ingrained habits among Chinese consumers. Alibaba rival and China's largest online direct sales company, JD.com, said that its website had clocked up 10 million orders by 10 am local time - up 180% from the site's total number of orders on Singles Day last year.
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Germany's wholesale prices continued to decline in October, though at a slower pace than in the prior month, figures from Destatis showed. The wholesale price index fell 1.6% year-over-year in October, slower than the 1.8% decrease in September. The index has been falling since July 2013.
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Eurosceptic politicians in Britain were unimpressed with Prime Minister David Cameron's package of EU reforms, accusing him of seeking only trivial concessions. His critics had urged Cameron to demand the right for Britain to control the entry of EU migrants and changes to EU treaties before he holds a promised in-out referendum by the end of 2017. Their reactions made clear his proposal fell far short of what they wanted.
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There have been more than 1 million asylum applications in the EU this year, and the present backlog would take 12 months to process, the bloc's asylum agency said. The Malta-based European Asylum Support Office said 1.06 million people had asked for international protection in the EU since January 1. That compares with 662,000 in 2014, 464,000 in 2013 and 373,000 in 2013.
In the month of September alone there were 174,000 requests, 2.5 times the amount recorded in the same month of 2014, EASO said. The agency noted that a quarter of all requests had been submitted in Germany.
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Russia will focus on building nuclear missiles capable of overcoming any defence system if the US continues with plans to install a missile system in Eastern Europe, Russian President Vladimir Putin said. Russia has repeatedly warned the US that the missile system is seen as "an attempt to undermine the existing parity in nuclear missile armaments," Putin told a meeting of senior defence officials, according to a transcript on the Kremlin's website.
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BROKER RATING CHANGES
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JEFFERIES CUTS WHITBREAD TO 'UNDERPERFORM' ('HOLD') - TARGET 4100 (4300) PENCE
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JPMORGAN LEAVES ITV AT 'OVERWEIGHT' - TARGET 315 PENCE
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Liberum Downgrades Jimmy Choo To Hold From Buy, Cuts Target To 160p From 210p
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BARCLAYS CUTS SCHRODERS TO 'EQUAL WEIGHT' ('OW') - TARGET 3140 (3450) PENCE
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BARCLAYS RAISES JUPITER FUND MANAGEMENT TO 'OVERWEIGHT' ('EW') - TARGET 520 (450) PENCE
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COMPANIES - FTSE 100
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J Sainsbury said the grocery market in the UK remains challenging and posted lower sales for the first half, even as it swung to a pretax profit in the period. The grocer said its pretax profit for the 28 weeks to September 26 was GBP339.0 million, swung from a GBP290.0 million loss made a year earlier due to writedowns it had booked. Underlying pretax profit for the group fell 18% in the recent half to GBP308.0 million from GBP375.0 million a year before. Sainsbury's will pay an interim dividend of 4.0 pence per share, down 20% from 5.0p a year earlier.
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Boeing has cancelled a contract with a supplier of a key engine part for its 737 Max, causing the aerospace giant to change its design for the planned jetliner and abandon a piece of new advanced technology, the Wall Street Journal reported. Engineer GKN was to supply part of the thrust reverser, which slows a jet on landing, but Boeing cancelled the deal over concerns that the UK-based company couldn't keep up with plans for a rapid increase in production, the report said. The 737 Max, with 125 to 215 seats, is planned as a replacement for Boeing's most popular single-aisle jets, and is scheduled to enter service with Southwest Airlines Co. in the third quarter of 2017.
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SSE said its pretax profit fell in the first half of the financial year due to a number of exceptional items, but the energy company still upped its dividend and reported a substantial rise in revenue in the period. The UK energy company reported a pretax profit of GBP230.8 million in the six months ended September 30, falling from GBP316.6 million a year earlier. SSE upped its interim dividend for the first half by 1% to 26.9 pence per share.
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Property developer British Land said it has secured a series of new lettings totalling around 28,000 square foot at Meadowhall, its Yorkshire shopping centre. The FTSE 100-listed developer said it has secured lettings with fashion and jewellery retailers, restaurants and beauty and cosmetics companies. It is also in talks with other premium retailers to take space at the centre, which is in Sheffield. The internal refurbishment of Meadowhall is due to be completed by the end of 2017, the group said.
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Housebuilder Barratt Developments said it remains on track following a strong start to its current financial year, as conditions in the UK's housing market continue to be robust and demand holds up across the regions. The group said its net private reservations per week for the 19 weeks to November 8 rose 13% year-on-year to 261, with a sales rate of 0.7 net private reservations per active site per week, up from 0.63 a year earlier. Its total forward sales position at the end of the period was GBP2.50 billion, up 21% year-on-year.
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COMPANIES - FTSE 250
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The deal between Tullett and ICAP was revealed as ICAP announced its interim results for the six months to the end of September, with pretax profit rising to GBP83.0 million from GBP36.0 million a year earlier, despite revenue falling to GBP595.0 million from GBP620.0 million. It will pay a flat interim dividend of 6.60 pence per share.
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TalkTalk Telecom Group said it will book a one-off cost related to the recent cyber attack on it but said trading outside of this is in line with its expectations. The group said the hacking attack will result in one-off costs being booked in the current financial year to the end of March 2016 of GBP30.0 million to GBP35.0 million. Excluding the impact of the cyber attack, TalkTalk said trading is in line with its expectations for the full year. The group made a pretax loss for the half to the end of September of GBP8.0 million, swung from a pretax profit of GBP20.0 million a year earlier. TalkTalk will pay an interim dividend of 5.29 pence per share, up from 4.60p a year earlier, and said it remains on track to meet its expectations for the year, excluding the hack impact.
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Insurer esure Group said its gross written premiums edged up in the first nine months of 2015 and said it remains on track for the full year. The company, which owns the Sheila's Wheels insurance brand and the GoCompare.com price comparison site, said gross written premiums for the first nine months hit GBP430.5 million, up from GBP410.0 million a year earlier.
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COMPANIES - INTERNATIONAL
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German airline Lufthansa's attempt to tackle a strike by its cabin crew through court orders came to nothing, as the court gave its assent to the protest. A Labor Court ruled early Wednesday that the UFO Flight Attendants Union is entitled to go ahead with its three-day strike that began last Friday. The court order applies to the stand-off in the airline's hub in Frankfurt and Munich, although it remains to be seen if the company could secure an extension until Friday of an injunction against a previous strike in Dusseldorf.
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Danish brewer Carlsberg reported its third-quarter net loss attributable to shareholders was DKK4.50 billion, compared to last year's profit of DKK2.10 billion. The latest results included special charges of DKK7.72 billion, compared to last year's charges of DKK94 million. Adjusted attributable profit was DKK2.22 billion, compared to DKK2.18 billion last year. Net revenue increased to DKK18.30 billion from DKK18.12 billion a year ago. Total beer sales volumes remained flat at 37.6 million hectoliters.
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Dutch supermarket chain Koninklijke Ahold said its third-quarter profit increased from the prior year, amid a growth in sales. Looking ahead, the company is on track to deliver a full year performance in line with expectations. The company's attributable net income rose to EUR189 million from EUR178 million. Net sales increased to EUR8.44 billion from last year's EUR7.472 billion.
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Volkswagen has halted production of diesel Passats at its US factory in Chattanooga, Tennessee, a news report said, following losses from the emissions-cheating scandal. Petrol-powered 2016 Passats are still due to hit US dealerships by early December, but assembly of the diesel version of the mid-sized model has been stopped, Automobile News reported online, citing a factory spokesman. VW did not respond to a request for comment.
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Wednesday's Scheduled AGMs/EGMs
Avingtrans
Barratt Developments
Hays
Primary Health Properties (re share split)
Strategic Equity Capital
Unitech Corporate Parks
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By Tom Waite; [email protected]; @thomaslwaite
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