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LONDON (Alliance News) - UK shares trade flat to lower Thursday - though with BT shares rising on the confirmation of its acquisition EE - as the European Central Bank turns up the pressure on Greece over its vow to renegotiate the terms of its debt bailout.
The FTSE 100 is down 0.3% at 6,840.21 at mid-morning. The FTSE 250 trades flat at 16,583.75, while the AIM All-Share also is flat at 694.38.
BT Group is the best performer in the blue-chip index, up 4.8%, after confirming the details of its deal to acquire mobile network EE for GBP12.5 billion in cash and shares, a deal that will give EE's joint owners Deutsche Telekom AG and Orange SA stakes in BT.
BT will pay the cash amount through a combination of new debt financing and around GBP1 billion from the placing of new BT shares. It said this placing will be launched in due course.
BT also will issue shares to EE's two current owners. It will issue around 1.2 billion new shares, valued at around GBP5.1 billion to Deutsche Telekom for a 12% stake in BT, along with a small cash payment, and 400 million new shares to Orange value at around GBP1.7 billion and GBP3.4 billion in cash, giving it a 4% stake.
Fellow telecoms firm Vodafone, trading up 0.2%, confirmed its full-year Ebitda guidance at GBP11.6 billion to GBP11.9 billion and added that its Project Spring investment programme is well advanced. The group said its third quarter group service revenue was GBP10.88 billion.
GlaxoSmithKline was trading among the best FTSE 100 performers, up 1.8% after saying late Wednesday it has agreed to sell nearly 4.5 million shares in Genmab through an accelerated bookbuild. The shares are its entire 7.9% stake in the Danish business. The final placing price was set at DKK430.00 a share Thursday, meaning gross proceeds were about GBP194 million.
Fellow pharma giant AstraZeneca was the worst performer in the FTSE 100, down 2.8% after reporting lower earnings for 2014 due to increased investments it is making in its growth platforms and in accelerating its drugs pipeline. The group moved to further bolster its respiratory drug pipeline by acquiring the rights to Actavis' branded respiratory business in the US and Canada for USD600 million plus royalties.
Medical products firm Smith & Nephew was up 1.3%, after reporting higher 2014 earnings, buoyed by a sustained improvement in US reconstruction markets and higher growth in emerging markets.
EasyJet was another big fall in the FTSE 100, down 1.6%, after reporting flat passenger numbers in January and a slight year-on-year decline in its load factor. The budget carrier said it carried 4 million passengers in January 2015, flat year-on-year, while its load factor fell by 0.3 percentage point to 85.1% from 85.4%.
In economic news, UK house prices increased for the third straight month in January, survey data from Lloyds Banking Group's Halifax division showed Thursday. House prices climbed 2.0% month-on-month in January, faster than the 1.1% rise in the previous month. Economists had expected house prices to remain flat during the month.
Still to come in the UK, the Bank Of England's interest rate decision is expected at 1200 GMT.
In Europe, German factory orders were reported to have rebounded at the fastest pace in five months, underpinned by both domestic and foreign demand in December. Factory orders grew a seasonally and working-day adjusted 4.2% month-on-month in December, reversing a revised 2.4% fall in November, figures from Destatis showed Thursday.
The ECB said it would refuse to accept Greek government bonds as security for loans. The central bank had previously given the Greek government a waiver on the use of its bonds as security, but said in a statement that it would lift that exemption as of February 11.
"The European Central Bank decided to send a rather sharp message to the Greek government that they were in no mood to accept any renegotiations of their obligations with respect to the current Greek bailout program," says Michael Hewson, chief market analyst at CMC Markets.
Adds Spreadex analyst Connor Campbell: "This news suggests that the Greek finance minister Varoufakis meeting with ECB president Mario Draghi wasn?t as ?fruitful? as the Syriza finance minister hoped. Instead of being allied with Syriza, Draghi has put a vice on Greece to squeeze it into submission."
Varoufakis push to renegotiate the country's bailout faces another tough opponent on Thursday as he holds talks with German Finance Minister Wolfgang Schaeuble.
Brent prices are up at USD55.04 and and US benchmark West Texas Intermediate is quoted up at USD48.86. The US Energy Information Administration said Wednesday that US crude oil stocks rose by 6.3 million barrels to 413.1 million barrels in the week ended January 30, up 1.6% on the week and 15% year on year.
In the US, Wall Street futures currently trade higher with the DJIA up 0.4%, the S&P 500 up 0.5% and the Nasdaq 100 up 0.3%. US Initial jobless claims are expected this afternoon at 1330 GMT.
In Asia, the Japanese Nikkei 225 closed down 1%, and the Hang Seng ended up 0.4%, while the Shanghai Composite finished down 1.2%.
By Daniel Ruiz; danielruiz@alliancenews.com
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