13th Oct 2015 10:14
LONDON (Alliance News) - The following is a summary of top news stories Tuesday.
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COMPANIES
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Anheuser-Busch InBev and SABMiller said they have agreed a GBP71.28 billion deal over a possible merger set to create a global beer giant. AB InBev lifted its offer to GBP44 per share, and its smaller rival said it will be willing to recommend a bid at that price to its shareholders. The previous offer valued SABMiller at GBP43.50 per share. In the event of an offer, AB InBev would agree to a "best efforts" commitment to secure regulatory approvals required for the deal to go through. A USD3 billion break fee would be paid to SABMiller in the event that an agreed deal fell through due to a failure to obtain regulatory clearances or the approval of AB InBev shareholders.
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The UK government said it has sold the majority of its 14% stake in Royal Mail for around GBP591.0 million under an accelerated bookbuilding process that was announced on Monday. The government said it has sold a 13% stake in Royal Mail, comprised of around 130.0 million shares, at a placing price of 455.0 pence per share, generating proceeds of GBP591.1 million. The government owned a 14% stake in Royal Mail, leaving it with a 1% shareholding after the placing. That remaining 1% stake, comprised of around 10.0 million shares, will be "gifted" to Royal Mail employees in the UK, marking the government's final disposal of shares.
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Barclays plans to name former JPMorgan investment banker Jes Staley as its new chief executive, The Financial Times reported. Citing two people familiar with the matter, and noting that Barclays declined to comment, the FT said Staley's appointment is set to be announced in the next two weeks. The report said the appointment requires approval from regulators. The FT article followed a Sky News report which said a successor to the ousted Antony Jenkins could be made within weeks. Chairman John McFarlane, who has been acting in an executive capacity since removing Jenkins in July, told some of the bank's most senior executives last week that he was close to appointing a new chief executive, the Sky News report said, citing insiders.
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Royal Dutch Shell is selling two assets in the North Sea, The Times reported. The assets are being sold as the Anglo-Dutch group and other big energy companies take action on high production costs and low crude prices. Citing industry sources, the newspaper said that Shell's stake in the Gannet field is being marketed to potential buyers. Shell owns 50% of the field. In addition, Shell wants to sell its 26% stake in Triton, a floating production, storage and offloading vessel, the report said.
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Bellway said it should be able to grow volumes by up to 10% in its current financial year, as the housebuilder reported a 44% jump in pretax profit in its most recent financial year and raised its dividend. In a statement, Bellway said pretax profit amounted to GBP354.2 million in the year ended July 31, compared with GBP246.0 million in the prior year, as revenue swelled to GBP1.77 billion from GBP1.48 billion. The housebuilder lifted its full-year dividend per share by 48% to 77.0 pence from 52.0p.
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Recruitment consultancy Michael Page International said Non-Executive Chairman Robin Buchanan plans to step down, as it reiterated its expectations for its full year. The company said its gross profit in the third quarter of 2015 rose 4.8% to GBP139.2 million from GBP132.9 million in the previous year. This growth was hit by volatility in foreign exchange rates, and at constant currency gross profit would have risen 10.2%.
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Worldpay has been valued at GBP4.80 billion in its initial public offering, making the payments processor the biggest company to come to market in London so far in 2015. Worldpay's value by market capitalisation was based on an offer price of 240 pence per share. The company is to receive about GBP947.8 million from the offer. There were 900 million shares on offer in total. Advent International and Bain Capital, the company's private equity owners, sold 505.1 million shares, receiving GBP1.21 billion and being left with a 48.7% stake between them.
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MARKETS
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UK shares were trading lower, weighed down by weak economic data from China, which hit miners, while SABMiller shares soared after agreeing to be bought by brewing rival Anheuser-Busch InBev.
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FTSE 100: down 0.8% at 6,318.70
FTSE 250: down 0.5% at 16,910.48
AIM ALL-SHARE: down 0.3% at 732.41
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The pound fell sharply against the dollar after UK inflation turned negative in September.
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GBP: down at USD1.5251 (USD1.5343)
EUR: up at USD1.1384 (USD1.1362)
GOLD: down at USD1,154.69 per ounce (USD1,161.16)
OIL (Brent): down at USD49.69 a barrel (USD51.77)
(changes since previous London equities close)
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ECONOMICS AND GENERAL
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UK inflation turned negative again in September, and factory gate prices continued to decline, the Office for National Statistics said. Consumer prices dropped 0.1% year-on-year in September, after staying flat in August. Economists had expected prices to remain flat. Consumer prices last declined in April, when it was down 0.1%. Core inflation that excludes energy, food, alcoholic beverages and tobacco, remained unchanged at 1% in September. Meanwhile, the ONS said output prices declined 1.8% annually versus a 1.9% drop in August. Month-on-month, prices slid 0.1%. Both annual and monthly rates matched expectations.
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UK house prices in August rose at the same pace as in the previous month, exceeding economists' expectations, figures from the Office for National Statistics showed. The house price index climbed 5.2% year-on-year, same as in July. Economists had forecast a 5% increase. The latest rise was the smallest since September 2013, when prices grew 3.8%. The average UK mix-adjusted house price was GBP 284,000 in August versus GBP 282,000 in the previous month.
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Like-for-like sales in the UK advanced 2.6% on year in September, the British Retail Consortium said. That beat forecasts for an increase of 1.5% following the 1.0% decline in August. Overall sales were up an annual 3.9%, while non-food sales climbed 3.1%. Food sales were flat on month and up 0.2% over the last three months.
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Germany's economic confidence dropped to a one-year low in October, survey data from the Mannheim-based Centre for European Economic Research or ZEW showed. The investor confidence index fell to 1.9 in October from 12.1 in September. This was the lowest score since October 2014, when it stood at -3.6. At the same time, current assessment deteriorated in October. The corresponding index fell to 55.2 from 67.5 in September. The reading was the lowest since March 2015, when the score was 55.1. "The exhaust gas scandal of Volkswagen and the weak growth of emerging markets has dampened economic outlook for Germany," said ZEW President Clemens Fuest.
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China's exports declined at a moderate pace in September as the devaluation of yuan helped it from falling sharply amid weak global demand. At the same time, imports plunged due to a drop in commodity prices and subdued domestic demand. Exports slid 3.7% in September from a year ago, the General Administration of Customs reported. Economists had forecast it to drop at a faster pace of 6% following August's 5.5% decrease. Meanwhile, imports logged a sharp 20.4% contraction after falling 13.8% a month ago. This was the eleventh straight annual decline in imports. Imports were expected to decline 16%. The trade surplus totalled USD60.34 billion, bigger than a USD48.2 billion surplus expected by economists. In yuan terms, exports fell 1.1% and imports declined 17.7% on a yearly basis. The trade surplus came in at CNY376.2 billion.
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For the second time in three weeks, EU leaders will come together on Thursday to discuss how to stem the tide of refugees making their way to Europe, amid fears that the worsening conflict in Syria will drive another wave of people towards their continent. By Monday afternoon, more than 590,000 migrants and refugees had reached Europe via the Mediterranean Sea this year, while some 3,100 had lost their lives trying to do so, according to the International Organization for Migration. The recent start of Russian airstrikes in the country has complicated the situation even further and raised the spectre of many more Syrians leaving to seek protection elsewhere.
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Iran's parliament approved the nuclear deal struck with six world powers in July, local media reported. The historic accord eased years of tensions between Tehran and Western powers suspicious that its nuclear programme is geared to produce a bomb - an allegation Iran denies. The deal is to result in the lifting of sanctions on Iran, once Tehran scales down its civilian nuclear programme and answers questions by the International Atomic Energy Agency (IAEA) about a dozen suspect research and development projects that were conducted in the past.
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By Arvind Bhunjun; [email protected]; @ArvindBhunjun
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