2nd Jul 2025 07:55
(Alliance News) - London's FTSE 100 was called higher on Wednesday, following the largest revolt to date by Labour MPs during Prime Minister Keir Starmer's premiership, against proposed welfare reforms.
In early corporate news, Spectris accepts a takeover bid from private equity consortium KKR, withdrawing its previous recommendation of an offer by Advent International.
Here is what you need to know before the London market open:
----------
MARKETS
----------
FTSE 100: called up 0.3% at 8,810.93
GBP: up at USD1.3731 (USD1.3705 at previous London equities close)
----------
ECONOMICS
----------
US President Donald Trump is seeking final approval Wednesday in the US Congress for his marquee tax and spending bill, with Republicans pinning their hopes on a narrow victory that will help seal the president's legacy. The party's senators passed the sprawling package by a tie-breaking vote Tuesday after a bruising 27 hours of infighting over provisions set to balloon the national debt while launching a historic assault on the social safety net. It was originally approved by the House of Representatives in May but must return for a rubber stamp of the final wording in the lower chamber – and success is far from guaranteed. "This bill is President Trump's agenda, and we are making it law," House Speaker Mike Johnson said in a statement, projecting confidence that Republicans were "ready to finish the job." The package honours many of Trump's campaign promises, boosting military spending, funding a mass migrant deportation drive and committing USD4.5 trillion to extend his first-term tax relief. But it piles an extra USD3.3 trillion over a decade onto the country's fast-growing deficits, while forcing through the largest cuts to the Medicaid health insurance program since its 1960s launch. Fiscal hawks, meanwhile, are chafing over spending cuts that they say fall short of what they were promised by hundreds of billions of dollars. Johnson has to negotiate incredibly tight margins, and can likely only lose three lawmakers among more than two dozen who have declared themselves open to rejecting the bill.
----------
Trump said Tuesday a trade deal with Japan was unlikely before the July 9 deadline, threatening to raise tariffs on Japanese imports to 30 or 35%. Speaking to reporters aboard Air Force One, Trump criticised Japan's reluctance to accept imports of US rice, as well as the imbalance in auto trade between the two countries. "I'm not sure we're going to make a deal," Trump said. "I doubt it with Japan, they're very tough." While Trump imposed a sweeping 10% tariff on imports from most trading partners in April, he unveiled – then paused – higher rates on dozens of economies to allow room for negotiations. This pause expires July 9, meaning the elevated rates are due to kick in next week if countries fail to reach agreements with Washington to avert them. To date, only two pacts have been announced. One was a broad framework with Britain and the other a deal to temporarily lower steep tit-for-tat duties with China. Trump said he was going to write a letter to Japan, asking them to "pay a 30%, 35% or whatever the number is that we determine" because of the "big trade deficit" with Tokyo. "It's very unfair to the American people," he said. Japan, a key US ally and its biggest investor, is subject to the same 10% baseline tariffs imposed on most nations plus steeper levies on cars, steel and aluminium.
----------
BROKER RATINGS
----------
Goldman Sachs raises Hiscox to 'buy' (neutral) - price target 1,395 (1,282) pence
----------
Goldman Sachs raises Admiral Group to 'buy' (sell) - price target 3,573 (3,000) pence
----------
Barclays starts Chesnara with 'equal weight' - price target 300 pence
----------
COMPANIES - FTSE 250
----------
Spectris has agreed to the terms of a takeover by private equity consortium Kohlberg Kravis Roberts & Co at GBP40 per share in cash. The offer comprises GBP39.72 in cash per Spectris share plus an interim dividend of 28 pence per share. The KKR offer would be reduced by any additional Spectris dividend payment. Spectris notes that KKR's bid represents a 6.3% premium to the offer by Advent for GBP37.63 per Spectris share, and so the Spectris board withdraws its recommendation of the Advent offer. KKR's offer represents a 96% premium to the Spectris' closing price of GBP20.38 per share on June 6, and values Spectris' entire share capital at around GBP4.1 billion. It implies an enterprise value of around GBP4.7 billion. Spectris expects the takeover to complete in or by the first quarter of 2026.
----------
Greggs reports total sales are up 6.9% on-year in the 26 weeks that ended June 28 to GBP1.03 billion, alongside 2.6% like-for-like sales growth, as "good progress" in May is followed by a slowdown in June "as high temperatures impacted consumer purchasing patterns". During this time, there were 31 net shop openings, resulting in 2,649 total shops now trading. The baked good provider now expects first-half operating profit to be lower than the year before, reflecting the strong comparative trading performance in the first half of 2024 and the phasing of refurbishments and cost recovery initiatives across its current financial year. Greggs will release its interim results on July 29. Looking ahead, the company anticipates full-year operating profit "modestly below" its 2024 result, as Greggs acknowledges like-for-like sales are less demanding in its second-half and as a result of current trading conditions. Its full-year cost inflation outlook remains unchanged, and the company expects planned cost mitigation measures to enhance second-half performance. The company remains on track to deliver 140 to 150 net shop openings for the full year.
----------
OTHER COMPANIES
----------
Planmatics says it has now received the support of 57% of shares in Empresaria for its takeover offer, as Empresaria reports that the bid received from Planmatics at the beginning of May "fundamentally undervalues the company and its prospects". The board continues to explore other options to realise value for shareholders. Despite this, Empresaria has extended the deadline to the end of the July for Planmatics to make a firm offer for takeover, to allow further time for the consortium to improve its offer. Planmatics in May had offered 10 pence in cash per Empresaria share plus 50p nominal per share in unsecured loan notes, which would be redeemable for cash three years after the completion of the takeover and accrue an annual interest rate of 2.6%.
----------
The UK Competition & Markets Authority begins an investigation into the potential acquisition of Coverworld Holdings by Kingspan Group. The CMA is mulling whether the deal would result in "a substantial lessening of competition" in any UK markets, and has until September 1 to reach its phase 1 decision.
----------
Secure Trust Bank will stop lending within its Vehicle Finance business and put the existing book into run-off, as it intends to pivot away from the division to improve its return on average equity over time. The decision reflects the historical financial performance and the medium-term outlook of its Vehicle Finance business, the bank says, and notes that the action would result in adjusted pretax profit rising to GBP56.6 million for financial 2024 from GBP39.1 million the year before, assuming a completed run-off. Vehicle Finance delivered a pretax loss before exceptional items of GBP21.8 million in financial 2024. Secure Trust Bank says, as the loan book runs down, streamlining on its cost base will enable more than GBP25 million in operating costs to be removed by 2030. It expects to incur around GBP5.0 million in restructuring costs and will provide a further update in its interim results release on August 14. The bank notes that 284 roles are expected to be at risk by 2030, including 78 roles at risk in financial 2025. The group plans to increase capital allocation to its Retail Finance, Real Estate Finance and Commercial Finance businesses, which "all have a strong track record of generating attractive returns".
----------
By Emily Parsons, Alliance News reporter
Comments and questions to [email protected]
Copyright 2025 Alliance News Ltd. All Rights Reserved.
Related Shares:
HiscoxAdmiralChesnaraGreggsSpectrisEmpresaria GroupSecure Trust