LONDON (Alliance News) - The following is a summary of top news stories Tuesday.
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COMPANIES
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The Weir Group PLC and Finland's Metso Oyj confirmed that Glasgow-based Weir has made an unsolicited proposal to Metso for a merger that would be worth about GBP8.36 billion. The FTSE 100 engineering firm has a market capitalisation of GBP5.41 billion, while Helsinki-listed Metso's market cap is EUR3.56 billion. Confirming a story first reported in The Times newspaper, Weir said it has made Metso an indicative all-share merger proposal. Separately, Metso confirmed it received the proposal and is in the process of considering it. However, it said it is currently not, and has not been, engaged in discussions with Weir about the proposal.
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Support services company Capita PLC said it has acquired IT network services provider Updata Infrastructure (UK) Ltd for GBP80 million in cash on a cash free, debt free basis, a move that will bolster Capita's IT services division with a business it already works closely with. Reigate-based Updata provides a range of networking and connectivity services to mainly public sector clients.
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Babcock International Group PLC said it has been named the preferred bidder on a 21-year fleet management contract by the London Fire and Emergency Planning Authority to manage the London Fire Brigade's vehicle fleet. The engineering support provider's contract win follows the successful completion of an interim fleet management contract with the LFEPA, awarded to Babcock in November 2012. Babcock said the contract is slated to be become operational November 13, 2014.
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Rathbone Brothers PLC said it has raised GBP24.4 million via a share placing to fund two acquisitions. Rathbones said it agreed to acquire Jupiter Fund Management PLC's private client and charity investment management business in a deal that could be worth up to GBP53.9 million. The wealth manager also will pay GBP14.3 million buy part of the London private client wealth-management business of Tilney Investment Management Ltd.
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Aberdeen Asset Management PLC reported GBP3.9 billion in net outflows across its asset classes between the end of 2013 and the end of February, but it estimated that net outflows slowed to an estimated GBP200.0 million in March. The FTSE 100 asset manager reported GBP186.5 billion in assets under management at the end of February, a decline from the GBP193.6 billion under its care at the end of 2013, with Aberdeen pinning the blame on continuing weakness in emerging markets.
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GKN PLC shares jumped after the company said it has acquired the entire issued share capital of Williams Hybrid Power Limited from Williams Grand Prix Engineering Limited in an initial GBP8 million deal. The deal is an extension to a working relationship between GKN and Williams Hybrid Power; the firms have been working together to validate the use of Williams' technology and now that this stage has been reached. The acquisition comprises of a cash consideration of GBP8.0 million payable at closing, together with potential uncapped additional consideration payable based upon future sales of WHP products in the following 10 years.
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ICAP PLC said it expects results for its recent financial year to be in line with current market expectations, though its global broking division has had a hard two months. According to a poll of 11 analysts conducted by ICAP, the current range of forecasts for the year ending March 31 is between GBP266 million and GBP280.0 million, with a GBP273.0 million consensus. The interdealer broker said February and March revenue in the division was down by 14% compared with the corresponding period in 2013.
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John Wood Group PLC said it has acquired Canadian pipeline engineering company, Sunstone Projects Ltd, in a CAD14.5 million deal. Under the terms of the acquisition, the international energy services company said Sunstone will be rebranded as Wood Group Mustang and operate within its Canadian operations. Sunstone will continue to be led by the existing management team under President Barry Bauhuis.
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BHP Billiton PLC said it is mulling an overhaul of its operating portfolio to focus on up to five commodities, after media reports that the company is considering a AUD20 billion demerger of non-core assets. The global mining company is being advised on options, including the spin-off of aluminium, manganese, thermal coal and nickel assets, bringing the company up to AUD20 billion, The Australian newspaper reported. BHP Billiton said simplification of its portfolio is a priority, believing that a portfolio focused on its major iron ore, copper, coal and petroleum assets would retain the benefits of diversification, generate stronger growth in free cash flow and a superior return on investment.
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The National Audit Office said said the privatisation of Royal Mail PLC did not achieve the best value for the taxpayer. The spending watchdog said the government's "deep caution" and emphasis on completing the sale within this parliament led to a sale price that short-changed the taxpayer. The UK government's sale of a 60% stake in Royal Mail last October for 330 pence per share has been heavily criticised as too cheap, with shares now more than 85% higher, closing at 563.00 pence on Monday.
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The Departure for Culture, Media and Sport's Broadband UK project to roll out fast broadband services to rural areas has come under fire from the government's spending watchdog for creating a "monopoly" for BT PLC, the Financial Times reported. A group of MPs found that BT has been in a position to win all of the GBP490 million state subsidies on offer in the GBP1.2 billion project.“The government has failed to deliver meaningful competition in the procurement of its GBP1.2 billion rural broadband programme, leaving BT effectively in a monopoly position,” Margaret Hodge, chair of the public accounts committee said, according to the FT.
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MARKETS
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FTSE 100: up 0.4% at 6626.63
FTSE 250: up 0.4% at 16334.82
AIM ALL-SHARE: down 0.2% at 849.31
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The pound has dipped against the dollar following a weaker-than-expected reading of the UK manufacturing industry.
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GBP-USD: down at USD1.6650
EUR-USD: up at USD1.3793
GOLD: up at USD1287.40 per ounce
OIL (Brent): down at USD107.48 a barrel
(changes since end of previous GMT day)
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ECONOMICS AND GENERAL
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The UK manufacturing sector growth slowed unexpectedly to an eight-month low in March, survey data from Markit Economics showed. The seasonally adjusted Markit/Chartered Institute of Purchasing & Supply Purchasing Manager's Index fell to 55.3 in March from 56.2 in February, signaling a further cooling of growth from the peaks scaled towards the end of last year. The score was forecast to rise to 56.7 in March. Nonetheless, the above neutral 50 reading indicates expansion in the sector.
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The Eurozone jobless rate remained unchanged in February, data from Eurostat showed. The unemployment rate held steady at 11.9% after the January figure was revised down from 12%. Economists had forecast the rate to remain unchanged at January's originally estimated 12%.
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The Chief Executive of the Financial Conduct Authority Monday admitted the regulator faces "serious questions" over its handling of media coverage that resulted in "a clear reaction from the market" on Friday, when the FTSE 350 life insurance index fell by as much as 7.1%. Martin Wheatley, speaking at City Week 2014, said: "This was clearly not the FCA’s finest hour – but it does serve as a timely reminder of the importance to all parties involved in markets of the care and thought that is needed when handling the significant amounts of information we hold as a part of going about our day-to-day business."
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Federal Reserve Chairwoman Janet Yellen said Monday that the US central bank will maintain near-zero interest rates for the time being because there is "considerable slack in the economy and the labour market." Her remarks in Chicago at a conference on community investment followed Yellen's recent comments that the Fed could end its buying spree of government-backed bonds by late this year. A majority of Fed members do not foresee starting to tighten the central bank's benchmark interest rate before the first half of 2015.
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The manufacturing sectors in China continued to be in contraction in March, the final reading from the HSBC purchasing managers' index revealed - coming in with a score of 48.0 and contracting for the third straight month. That was shy of forecasts for 48.1, which the PMI's preliminary reading suggested earlier this month. It was also down from 48.5 in February.
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An index monitoring business sentiment in Japan showed mild upside in the first quarter of 2014, the Bank of Japan revealed on Tuesday in its quarterly Tankan business survey - although the outlook for the second quarter is somewhat less optimistic. The large manufacturers index came in with a six-year high score of 17, missing forecasts for 18 but up from 16 in the fourth quarter of last year. But the outlook score tumbled all the way down to 8 - well shy of forecasts for 13 and down from 14 in the previous three months.
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The Japanese government raised sales tax to 8% for the first hike in 17 years, amid growing concern that it could exacerbate an economic slowdown. The tax was raised from 5%, to help cover the nation's swelling social security costs as the elderly population grows. Analysts said the hike could make it more difficult to combat longstanding deflation in the world's third-largest economy.
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Russia is raising gas prices for neighbouring Ukraine by 30%, the head of energy giant Gazprom said, hours before NATO foreign ministers were set to consider further action in response to the crisis in the region. The international community has been outraged by Russia's annexation of the Ukrainian peninsula of Crimea and the ensuing pressure it has been accused of applying on its neighbour. Ukraine depends on Russia for more than half of its gas imports. Gazprom chief executive Alexei Miller justified the cancellation of a Ukrainian discount and the ensuing price hike by pointing to 1.7 billion dollars in bills that have gone unpaid by Kiev.
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Russia is withdrawing a battalion of several hundred troops near the border with Ukraine, the Defence Ministry said Monday in Moscow, easing fears that it could take over more Ukrainian territory. The US and European countries have repeatedly called for Russia to pull back the some 4,000 troops amassed at the border, as a first step to de-escalate the situation. The Russian announcement came as NATO foreign ministers were due to discuss the Ukraine crisis Tuesday in Brussels.
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French President Francois Hollande replaced his top lieutenant Monday, a day after his Socialist Party received a drubbing in municipal elections as voters vent frustration with his leadership. "I have heard your message - it is clear," Hollande said after scores of Socialist mayors lost their offices to opposition conservatives, centrists and the far-right National Front. Addressing the nation in a prime-time address, Hollande announced he had made popular Interior Minister Manuel Valls France's new premier, replacing Jean-Marc Ayrault, who tendered his resignation over the election losses. Hollande said 51-year-old Valls would lead a new, tighter, "combative" government, which had yet to be unveiled.
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Another frustrating day passed in the search for missing Malaysian Airlines flight MH370 as orange objects seen in the water turned out to be fishing gear Monday. The objects spotted by a search plane Sunday were described as a promising lead, but when ships pulled them from the southern Indian Ocean, hopes for a breakthrough were once again dashed. "Yesterday's finds were nothing of note, nothing related to the plane," an Australian Maritime Safety Authority spokesman said.
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10 Sep 2015 09:19
