Armadale Capital Share News (ACP)

LONDON (Alliance News) - London's capital markets continued a resurgence Monday as two more companies announced that they intend to list, another started trading, and AIM-listed Fyffes PLC said it would be acquired by Chiquita Brands International Inc of the US in a deal that will create the world's biggest banana company.

The London market has seen an acceleration in initial public offerings so far in 2014 as more companies tap renewed investor enthusiasm for new listings, while merger and acquisition activity has also been picking up after several years where companies held onto cash or used it to reduce debts in the wake of the financial crisis.

Chiquita and Fyffes said they'd reached an agreed all-stock deal which will result in Chiquita shareholders owning 50.7% and Fyffes holders owning 49.3% of ChiquitaFyffes, a New York-listed company with annual revenues of about USD4.6 billion.

However, the deal, which values Fyffes at about EUR379 million, is likely to draw the scrutiny of antitrust regulators as it creates the world's largest banana company with a big market share also in pre-packed salads, melons and pineapples.

Chiquita and Fyffes expect the deal to result in annual overheads and operational cost synergies of at least USD40 million by the end of 2016. The synergies will mainly come from combining logistics and procurement operations.

In the IPO market, Israeli digital marketing company Matomy Media Group Ltd said it will list on the Main Market and intellectual property company Tekcapital PLC said it will list on the AIM market.

Tel Aviv-based Matomy said it is looking to raise about USD100 million, or GBP60 million, in its proposed IPO, money it will use to buy up stakes in subsidiaries and a minority holding, pay down loans and to potentially make acquisitions as well as employ more product development staff.

Tekcapital didn't give any details of of the potential size of the IPO but said it will use the money it raises in its proposed AIM IPO to accelerate sales by expanding its sales and marketing team as well as developing its technology algorithms and indexing.

Separately, Pets At Home said it now expects conditional dealings in its IPO to start March 12, a day earlier than it previously expected, while Indian online fashion retailer Koovs listed on AIM with an initial market capitalisation of about GBP36.2 million and quickly shot higher.

The valuations of companies listing in London have been rising in recent weeks, with several pricing the new issues at the top end or even above early expected valuations. However, most of the new listing have been meeting strong demand from investors, and valuations continued to rise after the IPOs.

Koovs saw its shares move sharply higher from its 150 pence placing price. The stock was trading at 184 pence Monday morning, giving it a market capitalisation of about GBP44.4 million, up from its initial valuation of GBP36.2 million.

Investors are hoping the company will emulate ASOS PLC, the UK-based online retailer that is now by far the biggest stock listed on AIM. Koovs' chairman is British multi-millionaire media entrepreneur and politician Lord Waheed Alli, who was chairman of ASOS until November 2012. He founded the company along with former ASOS product developer Robert Bready.

The mining sector has taken a battering in the first session of the week, with weaker-than-expected Chinese trade data putting pressure on mining stocks, including Antofagasta, Glencore Xstrata, BHP Billiton, Anglo American, Rio Tinto, Polymetal International, and Kazakhmys.

China's imports grew by 10% in February, while exports declined unexpectedly by 18%, meaning that the world's second largest economy's trade balance showed a deficit of USD22.98 billion compared with the surplus of USD31.86 billion seen in January.

The British economy is set to exceed its pre-recession peak in the second quarter, and to grow at a faster pace this year than estimated earlier, the British Chamber of Commerce has predicted. The BCC expects the economy to expand 2.8% this year, which is faster than the 2.7% growth it had predicted in December. Quarterly growth is forecast at 0.7% in the first quarter. The outlook for 2015 has been revised up to 2.5% from 2.4%. In 2016, the growth rate will remain at 2.5%.

In other economic news, the Japanese economy grew at an annual rate of 0.7% between October-December, revised down from an initial estimate of 1%, the government said. Consumer spending, which accounts for about 60% of gross domestic product, edged up 0.4%, revised slightly from a preliminary reading of 0.5%, the Cabinet Office said.

Meanwhile, France's industrial production fell back into contraction in January, contrary to economist's forecast for a marked increase, latest data revealed. Industrial production edged down 0.1% year-on-year in January, reversing increases of 0.3% and 1.5% logged in December and November respectively, statistical office Insee said. Economists were looking for 1.3% expansion for January.

However, Eurozone investor confidence reached its highest level since April 2011 underpinned by a notable improvement in current situation assessment, survey conducted by the think tank Sentix showed. The composite confidence index rose to 13.9 in March, from 13.3 in February, missing forecasts for a rise to 14. However, it was the highest score since April 2011.

The news comes as European finance ministers embark on three days of last-ditch negotiations on a new scheme to shield taxpayers from bank bailouts, with the clock ticking on the much-touted measure. The new mechanism to wind down troubled banks in the eurozone would be the second element of a crisis-thwarting banking union that is considered key to restoring trust in the currency bloc.

The EU's finance ministers and parliament are trying to hammer out a compromise on the scheme before European elections in May. Diplomats believe that a failure to do so would delay any decision until 2015 - potentially to the detriment of EU credibility. The last chance for the European Parliament to approve a deal is at its April 14-17 plenary session.

Highlighting the need for a deal, Austria may have to implement budget cuts as the winding down of troubled Hypo Alpe Adria bank will add EUR17.8 billion to public debts, central bank chief Ewald Nowotny said over the weekend. Nowotny announced that he and leaders of financial oversight authorities have advised the government to split a bad bank off the nationalized Hypo, in order to wind down bad loans and leasing deals that resulted from a failed expansion in Balkan countries.

In world news, international investigation teams are continuing to pursue leads as the search for a missing Malaysia Airlines passenger jet with 239 people on board continued for a third day with little results. Azhaddin Abdul Rahman, deputy head of Malaysia's Civil Aviation Authority, said there has been no verified sighting of objects from missing aircraft or of the wreck itself. "We have not found anything that appears to be objects from the aircraft, let alone the aircraft," he said.

Vietnamese officials said a floating object reported as resembling an overturned liferaft was not part of the Malaysia Airlines plane missing over the South China Sea.

The Boeing 777-200 left Kuala Lumpur International Airport before dawn on Saturday. It dropped off the radar about an hour into the flight and is feared to have crashed into the South China Sea.

In Europe, the pro-Russian leadership of Crimea says a vast majority of the population will back accession to Russia. Parliamentary speaker Vladimir Konstantinov said: "Over 80% of Crimea residents are going to vote for its accession to Russia, according to yesterday's focus group survey."

Speaking to Russian news agencies, Konstantinov said that after the referendum the Crimean government was planning to allow both the Ukrainian and the Russian currencies for a period of six months, with the Russian ruble to be used as the sole currency thereafter.

The Afghan Taliban has instructed its fighters to disrupt the April 5 presidential election, warning people not to take part in the polls "designed in the CIA and Pentagon offices."

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FTSE 100: Down 0.1% at 6,703.83
FTSE 250: Up 0.01% at 16,561.77
AIM ALL-SHARE: Up 0.2% at 897.48
GBP-USD: 1.6635
EUR-USD: 1.3884
GOLD: USD1,338.32 an ounce
OIL (Brent): USD107.92 a barrel

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KEY UK CORPORATE NEWS:

FTSE 100: WM Morrison Supermarkets is expected this week to announce price cuts and GBP500 million of property sales to combat discount rivals such as Aldi and ease shareholder worries, according to the The Sunday Times. Drugs giant GlaxoSmithKline has now launched its GBP629 million open offer to increase its stake in its Indian unit to 75%, from 50.7%, a deal it had announced back in September. Consumer goods company Reckitt Benckiser Group has bought the K-Y brand from Johnson & Johnson unit McNeil-PPC, a deal that will add the sexual lubricant to its stable of Durex sexual health products.

FTSE 250: Essar Energy denied that it had any plans to close the Stanlow refinery in the UK, refuting recent media speculation, saying it will cut costs at the plant in an attempt to offset the recent drop in industry-wide refining margins. UK water regulator Ofwat said South West Water, owned by Pennon Group, has qualified for a fast-track passage through its 2014 price review for the next regulatory period. Senior has agreed to acquire UPECA Technologies Sdn Bhd, a Malaysian-based manufacturer of high-precision engineered components serving the aerospace and energy sectors, in a GBP75.5 million deal that the FTSE 250 manufacturer expects to boost earnings with immediate effect.

AIM: Phorm Corporation has jumped after the firm said it had inked a memorandum of understanding with China Telecom Corporation Ltd to become its strategic partner for 'Big Data' and advertising. Armour Group is up after the consumer electronics business agreed to sell its automotive division, including its Nordic subsidiaries, to AAMP of America Inc in a deal worth GBP10.9 million. Goldplat shares have jumped even though it said that its pretax loss widened slightly in its first-half as revenues fell due to weaker gold prices and lower grade recoveries hit company finances as expected. Shore Capital analyst Yuen Low said the poor results were expected and noted that the company had said its recovery operations in South Africa and Ghana are currently trading profitably and at a rate which should more than eliminate the first half trading loss. Crimson Tide is another gainer after it signed a three-year contract with a "renowned Irish manufacturer" for its mpro5 mobile software, worth about EUR100,000 in revenue. Frontier Mining is up after it said it will sell its FML Kazakhstan LLP unit for USD30 million in cash, using some of the money to ramp up production at its second site, Benkala, where it hit its copper cathode production guidance in 2013. Global Energy Development is doing well after the oil exploration and production company signed a farm-out agreement for its Bolivar association contract area in Colombia with Everest Hill Energy Group Ltd. At the other end of the market, PipeHawk is down after it reported that it swung to a loss in the half year, despite seeing revenues rise, due to higher staff and administrative expenses arising from the expansion of its QM Systems Ltd business. Armadale Capital is also down after the investment company said it has acquired an interest in ASX-listed Redcliffe Resources Ltd by investing AUD60,000 in the company. Shares in Hangar 8 took a hit after they resumed trading on AIM, after its merger talks with Air Charter Service Group PLC were terminated. The company's shares were suspended February 13 when the company revealed the talks with the privately-owned company.

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AFTERNOON WATCHLIST:

All Day EU Eurogroup meeting

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Tuesday's Key UK Corporate Events

Computacenter Full Year Results
Inchcape Full Year Results
Share Full Year Results
St. Ives Full Year Results
Hansteen Holdings Full Year Results
Antofagasta Full Year Results
Close Brothers Group Full Year Results
Hill & Smith Holdings Full Year Results
Tyman Full Year Results
Foxtons Group Full Year Results
Craneware Full Year Results
esure Group Full Year Results
Fenner Trading Statement

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Tuesday's Key Economic Events

All Day EU EcoFin Meeting
00:01 UK BRC Retail Sales Monitor
03:00 Japan BoJ Interest Rate Decision
03:00 Japan BoJ Monetary Policy Statement
06:00 Japan Machine Tool Orders
07:00 Germany Trade Balance
09:30 UK Industrial Production
10:00 UK Inflation Report Hearings
11:30 US NFIB Business Optimism Index
12:55 US Redbook index
14:00 US Wholesale Inventories
15:00 UK NIESR GDP Estimate
23:50 Japan BSI Large Manufacturing
23:50 Japan Domestic Corporate Goods Price Index
23:50 Japan Tertiary Industry Index

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By Alice Attwood; aliceattwood@alliancenews.com; @AliceAtAlliance

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