(Alliance News) - NortonLifeLock and Avast on Thursday confirmed they are in advanced talks regarding a possible combination.
A deal may be in form of a cash and share takeover offer by Norton for Avast, the two companies said. Possible terms were not disclosed.
The talks were first reported by the Wall Street Journal late on Wednesday. A deal could value Avast at around USD8 billion, assuming a typical premium to its closing market capitalisation on Wednesday of GBP5.20 billion, the WSJ said.
Tempe, Arizona-based Norton makes consumer cybersecurity software, as does Avast, which is based in Prague and listed on the London Stock Exchange.
Under UK takeover rules, Norton will have to make a firm offer by August 11, or announce it will not make an offer.
"A combination of NortonLifeLock and Avast would bring together two companies with aligned visions, highly complementary business profiles and a joint commitment to innovation that helps protect and empower people to live their digital lives safely," Norton said.
NortonLifeLock shares fell 2.3% to USD26.29 in after-hours trading in New York on Wednesday, following the WSJ story.
Avast was up 16% at 583.80 pence in London early Thursday, giving the company a market cap of GBP5.96 billion compared to NortonLifeLock's USD15.77 billion.
Here is what you need to know at the London market open:
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MARKETS
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FTSE 100: down 0.1% at 7,087.38
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Hang Seng: up 0.9% at 28,038.93
Nikkei 225: closed down 1.2% at 28,279.09
DJIA: closed up 44.44 points, or 0.1%, at 34,933.23
S&P 500: closed up 5.09 points, or 0.1%, at 4,374.30
Nasdaq Composite: closed down 32.70 points, or 0.2%, at 14,644.95
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EUR: up at USD1.1836 (USD1.1825)
GBP: down at USD1.3854 (USD1.3870)
USD: down at JPY109.81 (JPY110.02)
Gold: up at USD1,832.79 per ounce (USD1,822.70)
Oil (Brent): down at USD73.86 a barrel (USD76.16)
(changes since previous London equities close)
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ECONOMICS AND GENERAL
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Thursday's Key Economic Events still to come
1100 BST Ireland goods exports and imports
0930 BST UK Bank of England credit conditions survey
0930 BST UK BoE quarterly bank liabilities survey
0830 EDT US Philadelphia Fed business outlook survey
0830 EDT US unemployment insurance weekly claims report
0830 EDT US weekly export sales report
0830 EDT US Empire State manufacturing survey
0830 EDT US import & export price indexes
0915 EDT US industrial production & capacity utilization
0930 EDT US Federal Reserve chair testimony to US Senate Banking Committee
0945 EDT US Bloomberg consumer comfort index
1030 EDT US EIA weekly natural gas storage report
1630 EDT US foreign central bank holdings
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The UK unemployment rate unexpectedly edged up in the three months to May, but data pointed to a recovery in the labour market in June, the Office for National Statistics said. The unemployment rate for the three months to May was 4.8%, up from 4.7% for the three months to April. This was ahead of market expectations, according to FXStreet, which saw the unemployment rate remaining unchanged. The jobless rate started 2021 at 5.0%, representing the three months to January. However, the labour market appears to have bounced back again in June. The number of payrolled employees has increased, with some regions now reaching above pre-pandemic levels, the ONS said. The number of payroll employees was up by 356,000 in June to 28.9 million. Still, this remains 206,000 below pre-virus levels.
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The UK government has been accused of a "double standard" on international travel after it was announced Ibiza, Mallorca and Menorca would be added to the amber travel list due to a surge in coronavirus cases, little more than a fortnight after they went green. The change for those returning to England, Scotland and Wales from Spain's Balearic Islands will take place at 4am on Monday, potentially sparking a rush for holidaymakers to return to avoid the need to quarantine. Johan Lundgren, chief executive of easyJet, noted Covid-19 infection rates were rising in the UK but remained lower in much of Europe. "So we cannot understand why the government is going to allow people to go to a nightclub – without a mask or social distancing – and yet is not comfortable with people going to the beaches of Europe, where the infection rates are lower than in the UK," Lundgren said. "Yet again we see this double standard where travel is treated differently to the domestic economy." Younger adults will mainly be impacted because the change coincides with the end of the need to quarantine for fully-vaccinated UK residents and under 18s when returning from amber list nations.
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Shoppers have been told by the UK government they are expected to wear masks from Monday next week, when they will no longer be required by law in a coronavirus policy criticised as a "real mess". New guidance on workplace safety for when most restrictions in England end was published as regional mayors urged ministers to keep masks compulsory on public transport in England. The document says the government "expects and recommends" masks to be worn by workers and customers in crowded, enclosed spaces as the work from home order ends. Table service is recommended to continue in bars, while pubs, restaurants and nightclubs are encouraged to check vaccine and testing status as a condition of entry through the NHS Covid Pass. UK Prime Minster Boris Johnson previously suggested so-called vaccine passports would only be recommended in "nightclubs and other venues with large crowds".
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BROKER RATING CHANGES
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CITIGROUP INITIATES BEAZLEY PLC WITH 'BUY'
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CITIGROUP INITIATES HISCOX WITH 'NEUTRAL' - TARGET 910 PENCE
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CITIGROUP INITIATES LANCASHIRE WITH 'NEUTRAL' - TARGET 648 PENCE
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COMPANIES - FTSE 100
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Food delivery firm Just Eat Takeaway.com posted growth in second quarter orders, said it has gained market share in the UK, and added that its losses peaked in the first half and margins will pick up from here on in. The company also boosted its annual guidance. It now expects order growth of "more than" 45% for 2021, excluding new US acquisition Grubhub, raised from its previous forecast of order growth of more than 42%. Total orders excluding the US rose 47% year-on-year to 212.4 million in the second quarter of 2021, from 144.9 million. Just Eat Takeaway also provided pro forma figures, which include the US. The company sealed its Grubhub acquisition in mid-June, so the second quarter pro forma figures are presented as if the deal was completed back in January of last year. Just Eat Takeaway had acquired Grubhub for USD7.3 billion. Pro forma orders were 37% higher yearly at 279.7 million from 203.8 million.
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Credit-checking firm Experian said it has delivered a strong performance in the three months to June 30. Total revenue growth was 31% at actual exchange rates and 28% at constant exchange rates in the first quarter. Organic revenue growth was 22%, and all regions and segments delivered growth for the quarter. The company said its improved performance was driven by an innovation-led strategy and a faster-than-expected recovery as economies emerge from the Covid-19 pandemic. Experian said it now expects total revenue growth for the full financial year to March 31, 2022 in the range of 13% to 15%.
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COMPANIES - FTSE 250
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Recruitment firm Hays reported 39% like-for-like annual growth in net fees in the three months that ended June 30, its financial fourth quarter. Growth was 36% in total and at actual rates. The surge was led by the UK and Ireland, with net fees up 48% on a year before. As a result, Hays expects to report full-year operating profit of GBP95 million.
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COMPANIES - MAIN MARKET AND AIM
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Online fashion retail ASOS said revenue growth in the four months to June was strong. However, trading in the last three weeks of the period was more muted, as demand was hurt by continued Covid uncertainty. "Although mindful of the continued impacts of the pandemic on our customers in the short term, we believe that the structure of the global e-commerce fashion market has changed forever, which will drive an increase in online fashion sales over the long term," said Chief Executive Nick Beighton. Looking ahead, ASOS said it anticipates a measure of volatility to continue in the near term, given the rapidly evolving Covid situation worldwide. Despite that, the retailer expects to deliver its overall full year adjusted pretax profit in line with its expectations.
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COMPANIES - OTHER
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PureGym Group on Wednesday said it was in the early stages of considering options for raising equity, which includes a potential listing in public markets. To this end, the Leeds-based no-frills gym chain will be working with US private equity firm Leonard Green & Partners - which holds an interest in PureGym - to review its strategic options. As at June 30, PureGym's total group membership reached 1.57 million, reflecting 92% of the total level in 2019, which was 1.70 million, and up from 1.46 million at December 2020. Due to the strong member recovery, PureGym is confident in a return to earnings before interests, tax, depreciation and amortisation in May and June. In 2016, PureGym had abandoned plans to list in the UK amid uncertain market conditions following the Brexit vote.
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Thursday's Shareholder Meetings
Airtel Africa PLC - AGM
BT Group PLC - AGM
Distil PLC - AGM
Dukemount Capital PLC - GM re permission to issue shares
Electrocomponents PLC - AGM
French Connection Group PLC - AGM
Helical PLC - AGM
Mind Gym PLC - AGM
Renewi PLC - AGM
Starcom PLC - AGM
Water Intelligence PLC - AGM
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By Tom Waite; thomaslwaite@alliancenews.com
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