7th Oct 2015 10:12
LONDON (Alliance News) - The following is a summary of top news stories Wednesday.
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COMPANIES
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Anheuser-Busch InBev NV said it has tabled a new offer for SABMiller, having seen two other informal offers rejected, and said it thinks its new bid should be "highly attractive" to SABMiller shareholders. SABMiller responded by saying its board will meet to discuss the new bid, after confirming it had rejected the previous offers as the board felt they undervalued the company. The Belgian-American brewing giant said it has made a bid valuing Anglo-South African SABMiller at 4,215p per share, valuing SABMiller at GBP68.2 billion overall. AB InBev said it has had two informal offers for SABMiller, of 3,800p and 4,000p, rejected. It said it was "disappointed" SABMiller's board had rejected the two previous approaches "without any meaningful engagement".
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Following a tumultuous period, Tesco said it is confident it can rebuild its financial performance as well as its reputation, as the supermarket made progress with its turnaround strategy, swinging back to profit in the first half of its financial year. Since Chief Executive Dave Lewis took the helm from former CEO Philip Clarke last year, he has embarked on a massive restructuring of Tesco, selling off some of the businesses that the company had added or expanded as it diversified away from its main UK grocery business. Lewis also has slashed costs, closed unprofitable stores, and cut Tesco's spending plans and its dividend as he tried to shore up the balance sheet. The reforms seem to be paying off, as Tesco reported a GBP74 million pretax profit in the 26 weeks ended August 29, an improvement on the GBP19 million pretax loss it suffered a year before.
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The UK's Serious Fraud Office is weighing whether it will resolve a year-long criminal investigation into alleged accounting irregularities at Tesco, the Financial Times reported. The SFO has not ruled out the possibility of agreeing to a so-called deferred prosecution agreement with Tesco, the FT said, citing people familiar with the situation, but is currently focused on investigating individuals involved in the probe, including Philip Clarke, the retailer's former chief executive.
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Sports Direct International said it reached an agreement to acquire Irish clothing retailer Warrnambool, which trades as Heatons, for EUR47.5 million. Sports Direct said it has agreed a deal with Sandra Minor, a minority shareholder in Warrnambool, to acquire her stake in the business and increase Sports Direct's holding to just over 50%. In addition, it has agreed a conditional put and call option agreement with the remaining shareholders in the company to buy the remainder of the business.
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Pharmaceuticals giant AstraZeneca said it has completed the divestment of its Caprelsa rare disease medicine to Genzyme, a unit of French drugmaker Sanofi. Genzyme has made an upfront payment of USD165 million to AstraZeneca for the global rights to develop and sell the drug, and will make further payments of up to USD135 million.
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Diageo said it has completed an agreement with Dutch brewer Heineken under which Diageo will sell its stakes in two business and buy Heineken's stake in another. Diageo said it will sell its 58% stake in Desnoes & Geddes to Heineken, increasing the Dutch company's stake in the company to 73%. It also will sell its 49.99% stake in GAPL to Heineken, giving the Dutch brewer full ownership of the business. Diageo will then acquire Heineken's 20% stake in Guinness Ghana Breweries, increasing Diageo's stake in the business to 72%. The net cash receivable by Diageo for the deals will be USD780.5 million, which will be settled immediately. This will result on the group booking a one-off profit on disposal of around GBP440 million after tax.
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Standard Life said only a small portion of its pension customers in the UK have made use of the new freedoms given to savers this year, with the majority choosing not to touch their pensions and remain invested. Last year the UK announced changes which allow people over 55 years old to use their pensions savings as they please and removed the requirement for them to purchase an annuity. Critics had cautioned the changes would leave thousands of pensioners without an adequate pension in retirement. But Standard Life said only 6% of its eligible customers have made use of the new pension freedoms since they came into force in April this year, with the remaining 94% deciding to stay invested and leave their pensions untouched.
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IG Group Holdings said it has made a couple of changes after the UK Financial Ombudsman Service ruled on a client case related to the volatility which arose following the Swiss franc's jump in value earlier this year. IG said the Financial Ombudsman agreed that it acted in accordance with the terms and conditions of its client agreement and that it "complied with its duties of best execution and acted fairly in the way it processed client orders". However, the regulator did find that a different contract fill level, in this specific case beneficial to the IG client who brought the case, would have been more reflective of the underlying market liquidity, in what were "unprecedented circumstances" for markets. IG said its response will cost it an additional GBP1 million.
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MARKETS
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UK indices were trading mixed with the FTSE 100 boosted by broker upgrades to some miners, while SABMiller shares also were up after rival AB InBev went public with an improved takeover offer.
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FTSE 100: up 0.3% at 6,348.03
FTSE 250: down 0.1% at 17,121.00
AIM ALL-SHARE: up 0.1% at 734.03
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The pound was up against the dollar after positive UK industrial and manufacturing data.
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GBP: up at USD1.5290
EUR: down at USD1.1237
GOLD: up at USD1,147.50 per ounce
OIL (Brent): up at USD52.82 a barrel
(changes since end of previous GMT day)
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ECONOMICS AND GENERAL
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UK industrial output rebounded at a faster than expected pace in August, data from the Office for National Statistics showed. Industrial output grew 1% from July, reversing a 0.3% drop in the prior month. Economists had forecast a 0.3% rise for August. At the same time, manufacturing advanced 0.5%, partially offsetting a 0.7% fall in July. It was faster than the expected 0.3% increase. On a yearly basis, industrial output growth accelerated to 1.9% in August from 0.7% in July. This was the fastest growth since April 2014, when it climbed 2.4% and also better than the 1.2% expansion forecast by economists.
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Shop prices in the UK fell 1.9% on year in September, the British Retail Consortium said. That follows the 1.4% yearly decline in August. Prices were also down 0.4% on month as the deflation trend continues.
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The UK Financial Conduct Authority said it has launched a call for inputs into the mortgage sector in the country to identify potential areas of the market where competition could be improved. The City regulator said it is seeking views on the regulatory regime on the mortgage market, including any changes made following the Mortgage Market Review and any other barriers to entry, expansion or innovation. It will also look for input on the ability of consumers to effectively access and act on information about mortgage products, and it will be asking for views on the conduct of companies operating in the sector and the relationships between mortgage providers.
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Germany's industrial production declined unexpectedly in August, data from Destatis revealed. Industrial production declined 1.2% in August from the prior month, offsetting the 1.2% rise in July. Economists had forecast the growth rate to ease to 0.2%. July's growth was revised up from 0.7%.
Excluding energy and construction, production in industry decreased 1.1% in August.
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A recently agreed EU plan to relocate tens of thousands of asylum seekers from Italy and Greece elsewhere in the bloc will start at the end of this week, a top EU official said. EU Home Affairs Commissioner Dimitris Avramopoulos wrote on Twitter that he would be in Italy on Friday for the first relocation of Eritrean refugees to Sweden. The Greek commissioner said he would also travel to the Italian island outpost of Lampedusa to visit a so-called "hotspot," a beefed-up migrant reception centre designed to register and screen all incoming boat migrants. The EU agreed in September to relocate across the bloc 160,000 asylum seekers from Greece and Italy in order to ease pressure on the two nations. But it has also urged them to make more serious efforts in identifying incoming sea migrants.
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The Yemeni government's temporary headquarters in the southern city of Aden and two bases used by Gulf troops helping to fight Houthi rebels were hit Tuesday by deadly explosions, and Islamic State extremist group claimed responsibility. If claim of responsibility is verified, it would be the first time that the radical militants have targeted Yemen's government, which last month returned from six months in exile in Saudi Arabia. Prime Minister Khaled Bahah and other cabinet members escaped unharmed, officials said. But four soldiers from the United Arab Emirates were among the up to 18 people reported to have been killed.
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By Arvind Bhunjun; [email protected]; @ArvindBhunjun
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