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LONDON MARKET OPEN: Market Cheers US Acquisition By Elementis

Fri, 10th Feb 2017 08:30


LONDON (Alliance News) - UK stock prices started higher on Friday, with shares in specialty chemicals firm Elementis rising after it said it has agreed to acquire US personal care chemicals company SummitReheis for USD360.0 million.

Elementis is acquiring the company from an affiliate of US investment firm One Rock Capital Partners for USD360.0 million in cash. It expects the deal to be accretive to earnings in 2017 and to provide double-digit earnings accretion in 2018.

SummitReheis makes a range of active ingredients and materials for personal care, pharmaceutical and dental products. It will increase the personal care revenue generated by Elementis to around USD200.0 million, in addition to providing cross-selling opportunities and broadening the UK firm's geographic presence.

Elementis led the mid-cap gainers in early trade, up 8.3%.

The FTSE 100 was up 0.6%, or 43.98 points, at 7,273.48. The FTSE 250 was 0.1% at 18,648.32 and the AIM All-Share was up 0.2% at 901.14.

The BATS UK 100 was up 0.5% at 12,308.43, the BATS 250 index was up 0.2% at 16,967.17 and the BATS Small Companies was up flat at 10,931.35.

In Europe, the French CAC 40 was up 0.3% and the German DAX 30 was up 0.5%.

In Asia, the Nikkei 225 closed up 2.5%, the Shanghai Composite up 0.4% and the Hang Seng in Hong Kong up 0.2%.

Stock indices in Europe and Asia continued positive momentum seen after record highs were set on Wall Street on Thursday. US stock indices were lifted after President President Donald Trump pledged to announce a plan to lower the tax burden on American business in the next few weeks.

"That's coming along very well. We're way ahead of schedule, I believe," Trump said at a meeting with airline executives. "We're going to announce something I would say over the next two or three weeks that will be phenomenal in terms of tax."

In other UK corporate news, online takeaway aggregator Just Eat traded down 6.1% after it said Chief Executive David Buttress is to step down from his role at the end of the first quarter of 2017. Just Eat Chairman John Hughes will become executive chairman at that time.

Berenberg confirmed private equity group Advent International Corp has sold its remaining stake in sofa retailer DFS Furniture by means of a share placing.

Advent, via its Advent Diamond vehicle, sold 25.7 million shares at 228.00 pence per share, a slight discount to DFS's closing price of 231.00p on Thursday. However, on Friday DFS traded up 5.0% at 242.50p.

Pub operator Greene King said its saw strong trading over the Christmas period and said like-for-like sales rose in the first 40 weeks of its financial year.

The mid-cap company said its like-for-like Pub Company sales for the 40 weeks to February 5 rose 1.1% year-on-year. Excluding its underperforming Fayre & Square brand, which is being converted into other brands owned by the group, like-for-like sales were up 1.6%. However, the stock was one of the worst performers in the FTSE 250, down 2.7%.

Motor finance lender S&U, up 2.4%, said it ended its financial year with trading in line with market expectations. S&U said its motor business, Advantage Finance, finished 2016 very strongly and said its Aspen bridging finance unit has secured regulatory approval and is open for business under a pilot phase.

In the economic calendar, UK industrial and manufacturing production and trade balances are at 0930 GMT and US import and export price indices are at 1330 GMT. The Michigan consumer sentiment index and the the National Institute of Economic and Social Research's UK GDP estimate are both at 1500 GMT. The Baker Hughes US oil rig count is at 1800 GMT.

By Neil Thakrar; neilthakrar@alliancenews.com; @NeilThakrar1

Copyright 2017 Alliance News Limited. All Rights Reserved.

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