2nd May 2014 10:48
LONDON (Alliance News) - The following is a summary of top news stories Friday.
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COMPANIES
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AstraZeneca PLC rejected Pfizer Inc's second bid for the company, saying that despite Pfizer raising its bid to GBP50 per share it still "significantly undervalue[s]" the company and that the details of the proposal are "inadequate." AstraZeneca advised shareholders to take no action. "Pfizer's proposal would dramatically dilute AstraZeneca shareholders' exposure to our unique pipeline and would create risks around its delivery. As such, the Board has no hesitation in rejecting the Proposal," said Chairman Leif Johansson in a statement. Ahead of the market open Friday Pfizer increased its bid for AstraZeneca, submitting a revised proposal to combine the two firms and offered a bid that valued the UK pharmaceutical giant at approximately GBP64 billion.
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Pfizer also released a letter it has sent to UK Prime Minister David Cameron, in which it promised to complete AstraZeneca's Cambridge R&D hub and to keep 20% of the combined company's total R&D workforce in the UK. Pfizer also said it would make the UK the combined firm's European headquarters and establish its corporate and tax residence in England.
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Royal Bank of Scotland Group PLC said first-quarter pretax profit doubled, helped by lower operating expenses and a significant reduction in impairment losses. In a statement, RBS said first-quarter pretax profit increased to GBP1.64 billion from GBP826.0 million in the corresponding quarter a year earlier, even as total income decreased to GBP5.05 billion from GBP5.16 billion.
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InterContinental Hotels Group PLC said revenue per available room was up 6% in the first quarter and declared a USD750 million special dividend after completing two asset disposals during the period, in line with the firm's ongoing strategy to reduce the capital intensity of the business. IHG said global RevPAR was up 6.0% during the quarter, driven by a 2.4% rise in occupancy and a 1.9% boost in average daily rate.
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Direct Line Insurance Group PLC reiterated its combined operating ratio target for 2014 but said first-quarter gross written premium for ongoing operations decreased as a result of competition in UK personal lines, partially offset by growth in commercial lines and in Germany. In a statement, the insurer, which was fully divested by Royal Bank of Scotland Group PLC earlier this year, reiterated that it is still targeting a combined operating ratio in the range of 95% to 97% for ongoing operations, assuming a "normal" level of claims from weather events. First-quarter gross written premium decreased to GBP949.3 million from GBP1.01 billion a year earlier, with currency movements partly to blame.
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Beverage can maker Rexam PLC said its overall results for 2014 so far have been in line with expectations, despite mixed trading across its regions. In an interim management statement for the period January 1 to date, the company said volumes of its standard and speciality cans were "quiet" at start to the year in Western Europe, but it saw volume growth in Russia. Rexam said in North America, its speciality cans business grew in the first quarter, while its performance in standard cans was in line with the market.
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MARKETS
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UK stocks are trading marginally higher, with a strong update from Royal Bank of Scotland and continued merger talk in the pharmaceutical sector, while IHG leads the FTSE100.
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FTSE 100: up 0.1% at 6814.45
FTSE 250: up 0.6% at 15949.16
AIM ALL-SHARE: up at 824.92
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The pound is down against the dollar after UK construction sector PMI dropped to a six month low.
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GBP-USD: down at USD1.6876
EUR-USD: down at USD1.3858
GOLD: up at USD1284.73 per ounce
OIL (Brent): up at USD108.55 a barrel
(changes since end of previous GMT day)
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ECONOMICS AND GENERAL
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UK construction activity expanded slowly in April, its weakest month since October 2013. Data from HSBC and Markit Economics showed that the seasonally adjusted Markit/CIPS UK Construction Purchasing Managers' Index hit 60.8 in April, from 62.5 in the previous month. Analysts had expected a reading of 62.2.
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Eurozone unemployment rate held steady for a third successive month in March, after revisions to data from the previous months, figures from Eurostat showed. The seasonally adjusted unemployment rate was 11.8% in March, unchanged from February. Economists had expected the figure to hold steady at February's original 11.9%. The jobless rate has been at 11.8% since December 2013, Eurostat said. In March last year, the figure was 12%.
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Germany's manufacturing sector grew for the tenth successive month in April, as production increased at the second-fastest rate since May 2011, survey results from Markit Economics showed Friday. The Markit/BME Germany Manufacturing Purchasing Managers' Index rose to 54.1 from 53.7 in March. The final figure came in slightly below the flash estimate of 54.2. A PMI reading above 50 indicates growth in the sector. Output growth in April was driven by intermediate goods where production was boosted by improving economic conditions and increased order intakes.
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The Italian manufacturing sector expanded at the fastest pace in three years in April as output and new order growth improved, leading creation of more jobs, survey data from Markit Economics showed. The headline Markit/ADACI Italy Manufacturing Purchasing Managers' Index climbed to 54 in April from 52.4 in March. Economists had forecast a modest improvement in the figure to 52.9. A PMI reading above 50 indicates expansion in the sector. The latest score is the highest in three years. New order grew at the fastest pace since April 2011. Export order growth was the fastest in just over three years.
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At least three people were killed and several were injured in clashes between Ukrainian forces and pro-Russian separatists in the eastern city of Sloviansk. The Ukraininan Defence Ministry said that two crew members were killed and an unspecified number of soldiers were injured after separatists shot down two Mi-24 assault helicopters with surface-to-air missiles. A third, Mi-8 transport helicopter, was hit by bullets but escaped unharmed, the ministry said. Ukraine's State Security Service said a pilot was taken hostage after rebels downed two aircraft.
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The average of household spending in Japan surged 7.2% on year in March, the Ministry of Internal Affairs and Communications said - coming in at 345,443 yen. The headline figure shattered forecasts for a gain of 2.0% following the 2.5% contraction in February. Analysts believe that the large spike in spending was a precursor to the sales tax that went into effect in April.
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Five more bodies have been recovered from the wreck of a sunken Korean ferry, bringing the death toll up to 226, a news report said. Seventy-six people remained unaccounted for as concerns mounted that the stronger spring tides might make further recovery impossible, the Yonhap News Agency reported.
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Gerry Adams, president of the Irish republican party Sinn Fein, was spending a second day in police custody after being arrested for questioning over one of the most notorious killings to take place during the conflict in Northern Ireland. The 65-year-old politician was detained late Wednesday by Northern Irish police after presenting himself voluntarily for questioning over his alleged involvement in the murder of Jean McConville, a widowed mother of ten. His detention came as one of McConville's daughters said she knew who her mother's killers were and that she was prepared to name them as she no longer feared revenge attacks.
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