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LONDON (Alliance News) - The following is a summary of top news stories Tuesday.
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COMPANIES
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US drug maker AbbVie agreed late Monday to terminate its proposed merger with Irish drug company Shire after its board withdrew support and recommendation for the deal. The move comes amid the proposed changes in tax rules in the US. AbbVie also announced a new USD5 billion stock repurchase program and Increased quarterly cash dividend by nearly 17%.
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Shire said it is "disappointed" that the takeover offer from AbbVie will not go ahead, but said it has maintained momentum throughout the offer period and it reiterated its target of USD10 billion product sales by 2020. The pharmaceutical giant is now owed a break fee of USD1.635 billion from AbbVie, which is due before 1700 BST Tuesday.
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The UK's listed supermarket chains continued to lose sales and market share in recent weeks, as the so-called "heavy discounters" and upmarket grocers took a bigger slice of the UK grocery market, according to the latest figures from Kantar Worldpanel. Tesco's market share in the 12 weeks to October 12 slid to 28.8%, down from 30.1% a year earlier, while its sales fell by 3.6% in the period. However, its market share was unchanged from the previous 12 week period, and its sales decline slowed. J Sainsbury's and Wm Morrison Supermarkets' sales slipped back, down 3.1% and 1.8%, respectively. Sainsbury's shares of the market fell to 16.1% in the 12 weeks period, down from 16.7% last year, while Morrison's slice of the market pared-back to 11%, from 11.2% the prior year.
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Intercontinental Hotels Group said global comparable revenue per available room rose 7.0% in the third quarter, its best quarterly performance in over two years and marking an acceleration from the first half of the year, helped by strong growth in the US in particular. IHG management also said the company is continuing to see strong momentum in the business and remains "encouraged by current trading and positive booking trends". It said it also continues to review opportunities for further asset sales. The hotels company, whose brands include Holiday Inn, Crowne Plaza and InterContinental Hotels, said RevPAR grew in every region, but its performance in the US was particularly strong with RevPAR up 8.7%.
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Aerospace components supplier Meggitt has won a multi-million dollar deal to supply an advanced wheel and braking system for Gulfstream Aerospace's new G500 and G600 business jets. It didn't give an exact figure for the size of the contract. "This is one of Meggitt's largest ever braking systems contracts in the business aviation marketplace, promising a strong revenue stream in spares and repairs over the life of the programme," Chief Executive Stephen Young said.
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British consumer goods giant Reckitt Benckiser Group said like-for-like sales, excluding its pharmaceuticals unit, were up 3% in the third quarter, and it reiterated its full year targets for both revenue and margin growth and said it now expects to demerge the pharmaceuticals business before the year end. The maker of products including Strepsils cold remedy, Nurofen pain relief and Durex condoms, reported net revenue of GBP2.37 million for the third quarter, up 2% at constant exchange rates, but down 7% at actual rates. In the year-to date, revenue of GBP7.04 billion is down 7% at actual exchange rates, but up 3% at constant currency.
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ARM Holdings said it expects to meet market expectations of around USD350 million in revenue for its fourth quarter, as growing royalty revenues helped boost pretax profit in its third quarter. The chip maker posted a pretax profit of GBP79.2 million for the quarter to end-September, up from GBP68.3 million a year before, as revenue rose to GBP195.5 million from GBP184.0 million. This brings its total pretax profit for the first nine months of the year to GBP225.1 million, up from GBP150.4 million a year earlier, as revenue rose to GBP569.3 million from GBP525.5 million, and exceptional costs of GBP41.8 million did not recur.
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BCA Marketplace became the latest company to pull its planned initial public offering in London due to the volatility in global markets, as top level domain services provider Afilias Ltd announced plans to float on AIM. The used car trader said earlier this month it was planning a listing on the London Stock Exchange's main market, in a deal that would have raised around GBP200 million. It was intending to use the funding to reduce its debt pile. The decision by the company to pull its IPO comes in the wake of a slew of high-profile retreats in London.
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Engineering group GKN reported higher pretax profit for the third quarter, as higher trading margins in its aerospace and driveline businesses offset a decline in sales that was caused by the strength of sterling and weak agricultural sales. The company reported a pretax profit of GBP139 million for the three months to end-September, up from GBP131 million a year earlier, even though revenue declined to GBP1.79 billion, from GBP1.87 billion, due to the strength of sterling. Its overall trading margin improved to 8.9%, from 8.2%. It said the revenue figure represented a 3% organic increase, offset by a GBP119 million or 6% hit due to sterling's strength against most major currencies. Divestments also knocked GBP15 million off sales.
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Premier Inn hotels and Costa coffee chain operator Whitbread reported higher pretax profit and revenue for the first-half of its financial year, as both businesses continued to grow and take market share. Whitbread declared a 15.6% increase in its interim dividend to 25.50 pence, as group return on capital increased to 15.8%. The company reported a pretax profit of GBP241.8 million for the six months to August 28, up from GBP200.7 million the year before, as revenue rose 13% to GBP1.29 billion, from GBP1.14 billion.
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BAE Systems has struck a deal to buy Perimeter Internetworking Corp for USD232.5 million, a deal that will bolster its commercial cyber security business and help it offset the decline in its main defence markets.
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Online fashion retailer ASOS reported a drop in pretax profit in its last financial year, as expected, due to heavy investments and sterling strength, and said it has started looking for a new chief financial officer after current CFO Nick Beighton moved to become chief operating officer with immediate effect. The retailer, which has been hit by a growth slowdown after several years of rapid growth and expansion, said Beighton will add retail and international to his responsibilities in his new role, on top of his existing responsibilities for finance, IT, supply chain and logistics. In a separate statement, the retailer reported a pretax profit of GBP46.9 million for the financial year ended August 31, down 14% on its GBP54.7 million pretax profit it reported a year earlier.
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Ophir Energy said it is focusing on negotiating fiscal terms with the government and seeking a company to operate its project at Block R in Guinea before the end of the year, after successfully testing its Fortuna-2 well. The company has successfully completed a drill stem test on the Fortuna-2 well, in which it holds and 80% stake, with GEPetrol holding the remaining 20%.
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UK telecoms regulator Ofcom confirmed that there are "no grounds for action" against BT Group over allegations of margin squeeze in superfast broadband pricing, concluding an investigation launched last year after a complaint from TalkTalk Telecom Group. TalkTalk had alleged that BT had operated a squeeze in the margin between its virtual unbundled local access wholesale prices and superfast broadband retail prices. Ofcom had provisionally concluded there was no grounds for action in June, and reiterated this in its final decision.
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William Hill reported a jump in operating profit and revenue for the third quarter as its online and mobile gaming operating profit more than doubled, and it said it now expects its operating profit for the full year to come in at the top end of expectations. The FTSE 250-listed bookmaker said group net revenue in the third quarter to September 30 was up 23%, boosted by a 55% rise in online revenue and a 9% increase in retail revenue. Australia revenue also increased in the period, up 17%.
The rise in revenue across the board pushed up its group operating profit by 89%. Publishing firm Informa said the company's current trading is on track, and its expectations for the full year remain the same.
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Go-Ahead Group said trading in the first quarter was robust and said it has maintained its full-year expectations for its bus and rail operations.
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Hochschild Mining has repaid its final outstanding convertible bond, reducing its overall debt. The FTSE 250-listed group said it has repaid the outstanding USD114.9 million in full, using existing cash resources.
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MARKETS
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UK shares have rebounded following a lower open, amid reports that the European Central Bank could soon decide to start buying corporate bonds on the secondary markets as part of its drive to bolster lending to businesses, a move the central bank has denied.
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FTSE 100: up 0.7% at 6,311.86
FTSE 250: up 1.2% at 14,930.09
AIM ALL-SHARE: up 1.1% at 700.04
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GBP-USD: flat at USD1.6151
EUR-USD: down at USD1.2766

GOLD: up at USD1249.06 per ounce
OIL (Brent): up at USD85.90 a barrel

(changes since end of previous GMT day)
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ECONOMICS AND GENERAL
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The UK budget deficit increased in September from last year, data published by the Office for National Statistics showed. Public sector net borrowing excluding interventions totaled GBP11.8 billion in September, an increase of GBP1.6 billion from the same period of last year. This increase in net borrowing is predominantly a result of an increase of GBP 1.6 billion in central government net borrowing, the ONS said.
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The Chinese economy logged its weakest expansion since early 2009 in the third quarter as slowdown in investment, particularly in the property sector, continued to drag the recovery. Gross domestic product grew 7.3% in the third quarter from a year ago, slower than the 7.5% expansion seen a quarter ago, the National Bureau of Statistics reported Tuesday. This was the weakest growth since the first quarter of 2009. Nonetheless, the increase was stronger than the 7.2% rise forecast by economists. For the first three quarters, economic growth came in at 7.4%, in line with expectations. The government targets about 7.5% expansion, which is likely to be missed this year.
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Pro-democracy protesters and police continued their stand-off on the streets of Hong Kong Tuesday ahead of key talks between government officials and protest leaders. No clashes were reported in the business and residential district of Mong Kok, on the Kowloon peninsular, one of three main protest sites. Late Monday, Hong Kong's High Court ordered protesters to leave the in Mong Kok area.
Activists and government representatives were due to meet for televised talks later Tuesday on Hong Kong's electoral process.
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Nigeria was declared Ebola-free Monday by the World Health Organization after recording no new confirmed cases for 42 days, twice the incubation period for the deadly virus. "This is a spectacular success story that shows that Ebola can be contained," WHO said. "The story of how Nigeria ended what many believed to be potentially the most explosive Ebola outbreak imaginable is worth telling in detail." WHO on Friday declared Senegal free of Ebola. In the US, where two nurses were infected after caring for a Liberian patient who died of Ebola, the CDC late Monday upgraded its guidelines on protective gear for hospital workers.
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The EU on Monday called on Russia to ensure the swift implementation of the Minsk peace deal over eastern Ukraine, where fighting between pro-Russian separatists and government forces continued unabated depite a six-week-old official ceasefire. In a declaration published after an EU foreign ministers' meeting in Luxembourg, the bloc called for the withdrawal of "illegal armed groups" as well as for the securing of the Ukrainian-Russian border by widening monitoring missions by the Organization for Security and Co-operation in Europe. During the day on Monday, the rebel stronghold of Donetsk was rocked by a massive explosion that broke windows over wide areas of the city.
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French politicians and business leaders reacted with shock Tuesday to the death of the boss of oil giant Total in a collision at a Moscow airport between his jet and a snowplough, whose driver was allegedly drunk. Christophe de Margerie was about to take off for Paris from Vnukovo airport when his Falcon plane hit the snowplough just before midnight local time on Monday night, according to Russia's Investigative Committee. Margerie and all three crew members on board died after the plane caught fire, the agency said.
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By Arvind Bhunjun; arvindbhunjun@alliancenews.com; @ArvindBhunjun

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