8th Sep 2021 08:15
(Alliance News) - Engineer Smiths Group on Wednesday said it has accepted a USD2.7 billion deal to sell its Smiths Medical unit to California-based medical technology firm ICU Medical.
The terms of the deal are "superior" to a USD2.3 billion sale it agreed with private equity firm TA Associates. The company had agreed the TA deal in August, though it has now withdrawn its recommendation for that offer.
The ICU Medical deal values Smiths Medical at USD2.7 billion, with a further USD100 million up for grabs depending on Nasdaq-listed ICU's share price performance following the acquisition.
Minus debt and other liabilities, the deal is worth USD2.4 billion, about USD400 million higher than the TA agreement.
In addition, Smiths will also receive 2.5 million ICU shares, worth USD500 million at current market prices.
Smiths plans to return 55% of the sales proceeds, equal to GBP737 million, to shareholders through a buyback.
"Delivering on our commitment to maximise value, the ICU transaction provides both a higher value for Smiths' shareholders, as well as future value creation through our 10% holding of the enlarged combined group and a potential USD0.1bn additional contingent consideration. We are focused on concluding this superior transaction and on driving Smiths Group forward," said Smiths Group Chief Executive Paul Keel.
Smiths Group shares were up 3.8% in London 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: down 0.8% at 7,091.92
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Hang Seng: down 0.5% at 26,227.75
Nikkei 225: closed up 0.9% at 30,181.21
DJIA: closed down 269.09 points, or 0.8%, at 35,100.00
S&P 500: closed down 0.3% at 4,520.03
Nasdaq Composite: closed up 0.1% at 15,374.33
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EUR: firm at USD1.1842 (USD1.1840)
GBP: down at USD1.3769 (USD1.3780)
USD: up at JPY110.28 (JPY110.20)
Gold: down at USD1,797.20 per ounce (USD1,794.50)
Oil (Brent): up at USD72.10 a barrel (USD71.67)
(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
16:00 BST UK BoE Governor Andrew Bailey appears before the Treasury Committee
07:00 EDT US MBA weekly mortgage applications survey
14:00 EDT US Beige Book
15:00 EDT US consumer credit
16:30 EDT US API weekly statistical bulletin
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UK Prime Minister Boris Johnson will attempt to convince Conservative MPs to back his plan to fix social care on Wednesday at a snap Commons vote called just one day after the manifesto-busting new policy was announced. The prime minister took a political gamble on Tuesday as he scrapped an election promise by raising national insurance contributions to deal with the backlog in the NHS built up during Covid and to deliver long-overdue reform of the social care system in England. Tory opposition to the plans when first leaked was fierce, but any backbench rebellion appeared to have subsided by Tuesday as MPs provided little challenge to the PM as he presented his proposals to the Commons. But the plan – along with another manifesto-breaking announcement to temporarily suspend the "triple lock" on pensions – moves Johnson away from his traditional position of low-tax Conservatism. The PM also refused to give a firm commitment that taxes would not go up again – although he said he did not want that to happen.
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Japan's economy grew at a faster pace than expected in the second quarter of 2021, according to figures released by the Cabinet Office. Gross domestic product grew by 0.5% quarter-on-quarter in the second quarter of 2021, topping the previous 0.3% forecast. Annual growth was 1.9%, higher than the previous 1.3% estimate. In the first three months of 2021, GDP had fallen 1.1% quarter-on-quarter and 4.2% annually. The second quarter bounce is a stark contrast to figures from a year earlier, which showed a 7.9% quarter-on-quarter decline and a 28% annual plunge. Japan's second quarter of 2021 was badly hit by Covid-19.
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BROKER RATING CHANGES
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BERNSTEIN STARTS BT GROUP WITH 'MARKET-PERFORM' - PRICE TARGET 170 PENCE
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BERNSTEIN STARTS VODAFONE WITH 'OUTPERFORM' - PRICE TARGET 155 PENCE
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COMPANIES - FTSE 100
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Booster vaccines may not be necessary for everyone in Britain and rolling out third doses too quickly would be an "unnecessary burden" on the National Health Service, the head of AstraZeneca has said. Writing in the Daily Telegraph alongside the company's executive vice-president of biopharmaceuticals research and development, Mene Pangalos; chief executive Pascal Soriot called for patience from the government, stressing the UK was "a few weeks away" from having a definitive answer on the effectiveness of two doses in providing "continued, protective immunity". They said: "Moving too quickly to boost across the entire adult population will deprive us of these insights, leaving this important decision to rest on limited data. A third dose for all may be needed, but it may not. Mobilising the NHS for a boosting programme that is not needed would potentially add unnecessary burden on the NHS over the long winter months."
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COMPANIES - FTSE 250
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Dunelm declared a special payout to cap off a bumper year for the FTSE 250 firm, which benefitted from increased demand as a result of the Covid-19 pandemic. With more working and playing indoors due to lockdown measures, Dunelm saw sales jump, despite its store estate being hit by restrictions. In the year ended June 26, revenue rose 26% to GBP1.34 billion from GBP1.06 billion. Pretax profit jumped 45% to GBP157.8 million from GBP109.1 million. Digital sales accounted for 46% of all sales, compared to 27% a year earlier, signalling just how large the shift to online has been. Dunelm declared a full-year ordinary dividend of 35.0 pence per share, having not paid one a year earlier. It also declared a 65.0p special payout. "Sales growth in the first ten weeks of the new financial year has been encouraging, including a positive response from customers to our Summer Sale in July and continued outperformance versus the homewares market," Dunelm said.
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Wm Morrison Supermarkets has begun talks with the Takeover Panel over the prospect of arranging an auction to decide who acquires the Bradford-based supermarket chain. Clayton, Dubilier & Rice and Softbank-owned Fortress are the two suitors in the running to acquire the company, though Morrisons noted that neither have made final offers. "Following completion of the auction procedure, the Morrisons board anticipates proceeding with either the Fortress meetings or the CD&R meetings depending on which offer it is recommending to Morrisons shareholders," the company added. At the start of July, it agreed a GBP6.3 billion deal from a consortium of investment groups which included Fortress. This sparked a bidding war, with Morrisons having most recently accepted a GBP7.0 billion takeover offer from CD&R. Fortress on Wednesday continued to urge Morrisons shareholder to take no action in respect to the CD&R bid.
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COMPANIES - GLOBAL
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Media companies are "publishers" of allegedly defamatory comments posted by third parties on their official Facebookpages, Australia's highest court has ruled. The High Court dismissed an argument by some of Australia's largest media organisations – Fairfax Media Publications, Nationwide News and Australian News Channel – that for people to be publishers, they must be aware of the defamatory content and intend to convey it. The court found that by facilitating and encouraging the comments, the companies had participated in their communication. The decision opens the media organisations to be sued for defamation by former juvenile detainee Dylan Voller. Voller wants to sue the television broadcaster and newspaper publishers over comments on the Facebook pages of The Sydney Morning Herald, The Australian, Centralian Advocate, Sky News Australia and The Bolt Report.
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Embattled property giant China Evergrande Group on Wednesday suffered a second credit rating downgrade in two days, raising fears the world's most indebted company will default and sending its shares tumbling below their listing price 12 years ago. The Hong Kong-listed firm has run up a mountain of liabilities totalling more than USD300 billion after years of borrowing to fund rapid growth and a string of real estate acquisitions as well as other assets including a Chinese football team. But the firm has in recent years struggled to service its debts and a crackdown on the property sector by Beijing has made it even harder to raise cash, fuelling concerns it will go bankrupt. Many analysts warn such an event could have a serious impact on the world's number two economy as the firm – which claims to employ 200,000 people and indirectly generate 3.8 million jobs in China – as it would go under leaving hundreds of firms out of pocket. Still, those worries were increased Wednesday when Fitch cut its rating on the firm to CC, reflecting its view that "a default of some kind appears probable".
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Wednesday's Shareholder Meetings
AEW UK REIT PLC - AGM
City of London Group PLC - GM
Halfords Group PLC - AGM
Kromek Group PLC - AGM
Lansdowne Oil & Gas PLC - AGM
Morses Club PLC - GM re reorganisation under U Money PLC
Mulberry Group PLC - AGM
Polar Capital Holdings PLC - AGM
Primorus Investments PLC - GM re capital reduction
TomCo Energy PLC - AGM
Yellow Cake PLC - AGM
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By Lucy Heming;Â [email protected]
Copyright 2021 Alliance News Limited. All Rights Reserved.
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