Haydale Share News (HAYD)

LONDON (Alliance News) - Pharmaceutical stocks are reigning over the first session following the long Easter bank holiday, with mergers and acquisitions leading investor interest.

GlaxoSmithKline has signed a three-part inter-conditional transaction with Swiss healthcare giant Novartis AG which will see it sell off its oncology portfolio, acquire Novartis' global vaccines business, and create a joint consumer healthcare business in which Glaxo will have a majority stake.

Glaxo Chief Executive Officer Andrew Witty said: “Opportunities to build greater scale and combine high quality assets in vaccines and consumer healthcare are scarce. With this transaction we will substantially strengthen two of our core businesses and create significant new options to increase value for shareholders.

“The Novartis OTC portfolio is highly complementary to GSK’s and has many well-known, widely recommended brands such as Voltaren, Excedrin, Otrivin, and Theraflu. Together, we will create the world’s premier OTC business with clear opportunities to accelerate revenue growth," he added.

Glaxo estimates that the transaction would increase its annual revenue by GBP1.3 billion to GBP26.9 billion, on a 2013 pro-forma basis, and fundamentally re-shape its revenue mix. These revenues now will be split across pharmaceuticals at 62%, consumer healthcare at 24% and vaccines at 14%.

Glaxo's announcement prior to the market open Tuesday ensured that investor attention remained focused on the sector, after interest already had been piqued by weekend press reports of a potential deal between AstraZeneca and US-based Pfizer. According to The Sunday Times and other UK newspapers, US pharmaceutical giant Pfizer offered to acquire its UK rival for USD101 billion.

The Sunday Times said informal conversations between both companies about a possible merger had been held, although no talks are currently under way after AstraZeneca resisted the approach. Pfizer could return with a better offer as it sits on a huge cash hoard in overseas subsidiaries that it could utilize for a major acquisition.

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FTSE 100: up 1.0% at 6,692.18
FTSE 250: up 0.3% at 16,106.04
AIM ALL-SHARE: up 0.5% at 833.69
GBP-USD: up at 1.6823
EUR-USD: up at 1.3816
GOLD: up at USD1,291.55 an ounce
OIL (Brent): down at USD109.43 a barrel

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Key UK Corporate News

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FTSE 100: Barclays is set to become the next big bank to wind down its commodities trading activities, according to a weekend report from the Financial Times. Anglo American is preparing the way to exit part of its South African platinum business, after three months of labour strikes in the region, according to a report from The Financial Times. easyJet has signed a five-year contract with SafeGuard World International to provide its payroll services.

FTSE 250: Polymetal International said revenue fell in its first quarter despite an increase in gold and silver production, as seasonal factors and lower copper production hit the company. QinetiQ Group subsidiary, QinetiQ US Holdings Inc, has entered into a conditional agreement to sell QinetiQ Group's US Services division in an initial USD165 million deal. Vedanta Resources said the Supreme Court in India has partially lifted the ban on mining in the state of Goa, where its subsidiary Sesa Sterlite Ltd has operations. German drugmaker Merck said that it has extended its offer for AZ Electronic Materials until May 2. Previously, the offer was set to expire on 18 April; it had been extended multiple times already. Colt Group has lowered its forecasts for 2014 earnings before interest, tax, depreciation and amortisation due to compression of its profit margins. Real estate investment trust Shaftesbury has signed a new GBP134.8 million 15-year loan with Canada Life Investments, cancelling its existing GBP100 million revolving credit facility with Bank of Scotland PLC, which was due to expire in two years.

AIM All-Share: Shares in Porta Communications are trading higher after the company said its public relations company in Australia, Newgate Communications PTY, has been appointed by the Australian government to handle the second phase of the Medibank privatisation, in a deal worth AUD2.4 million in fees to Newgate. Bullabulling Gold shares are also trading higher; the company has called for shareholders to reject an unsolicited takeover offer from Norton Gold Fields, stating that the offer price undervalues the company. Shares in Eden Research are up after the firm said its licensee Terpene Tech has launched two pet odour neutralising products using its encapsulation technology, the first to launch commercially that use the technology. Eurasia Mining is trading higher after the platinum group metals and gold exploration and development company has announced that previously announced new reserves at its West Kytlim site have been approved and formally registered by the Russian Ministry of Natural Resources. At the other end of the market sits Hume Capital Securities, trading lower after The Telegraph reported that Haydale Graphene Industries, one of the newest listings on London's AIM market, is considering taking legal action following its broker's decision to pull out of market-making activity on the day of Haydale's flotation. Touchstone Gold is also trading lower after it set out plans to sell all of its assets and become an investment company, while revealing board changes and a share placing that raised USD1.7 million, all aimed at solving its current financing woes. Iofina shares dropped as the company said the preliminary decision of the Montana Department of Natural Resources and Conservation is to deny the company's application for water rights in the western US state. Shares in Oilex are trading lower; the group said the the 4.5 inch production casing has been set and cemented at its Cambay-77H well, part of the Cambay Production Sharing Contract in Cambay Basin, Gujarat, India.

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Top Economics And General

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Eurozone construction output growth eased sharply in February, data from Eurostat showed. Construction output grew only 0.1% from January, when it was up by 1.6%. The decline was driven by a 0.4% fall in building construction, while civil engineering advanced 1.1%. On a yearly basis, construction output advanced 6.7% in February, but slower than the 8% increase seen in January.
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US Vice President Joe Biden promised economic and political support to Ukraine, and warned during a visit that the country needs to fight corruption. Biden said during meetings with lawmakers in parliament that Ukraine needed to address the "cancer of corruption", the Russian Itar-Tass news agency reported. Biden also said that the early presidential elections set for May 25 would be the most important in the country's history. A revolt by pro-Russian separatists in eastern Ukraine has raised doubts over the ability of the government to organize the vote.
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Russian Foreign Minister Sergei Lavrov on Monday accused Ukrainian authorities of violating the recent accord reached in Geneva for ending the ongoing crisis in the former Soviet Republic. Lavrov told reporters in Moscow that the government in Kiev, which incidentally is not recognized by Moscow, has not acted to disarm illegal militants, especially the ones belonging to ultra-nationalist Right Sector. Lavrov's remarks came a day after at least three people were killed in a shooting incident at a checkpoint manned by pro-Russian separatists near Sloviansk in eastern Ukraine. While the separatist blamed ultra right wing militants for the shooting, the government in Kiev said it was "provocation" staged by Russian special forces.
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US President Barack Obama is slated to depart Tuesday on an Asia trip, with a stopover on the US West Coast to visit a community hit hard by a deadly mud slide. Air Force One will land in Everett, Washington, for Obama to visit the buried village of Oso, hit by a March 22 mudslide with a death toll now at 39. From there, Obama will continue flying west to Japan, where he is to arrive Wednesday for the first stop on his seven-day journey to four countries, including South Korea, Malaysia and the Philippines.
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The death toll in the sinking last week of a South Korean ferry has climbed to 104, the broadcaster KBS reported Tuesday. The bodies recovered so far have been found in the sea or were retrieved from the wreck of the Sewol. Almost 200 of the 476 people on board the ferry are listed as missing. Divers are to search through the ship's cabins where it is presumed that most of the bodies are trapped, the report said. The ferry capsized and sank on Wednesday off the south-west coast.
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China is planning to permit local governments to directly issue bonds to fund essential projects, the official Xinhua News Agency reported Monday. The Standing Committee of National People's Congress is reviewing the draft revisions on the budget law. According to the draft law, local governments will be able to issue bonds within a quota set by the State Council.
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The People's Bank of China said it will lower the share of deposits that rural lenders need to set aside as cash with central bank. The bank said the reserve requirement ratio for rural commercial banks will be reduced by two percentage points, effective Friday. The RRR for rural cooperative banks was reduced by 0.5 percentage point. The PBoC said the action will not affect overall liquidity in the banking system as there is no change in RRR of urban banks. The bank said it will continue to maintain reasonable growth in credit and social financing.
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Japan's leading economic index fell less than estimated in February, but it remained at a six-month low, final survey data from the Cabinet Office showed. The leading index fell to 108.9 in February from 113.5 in the prior month. However, the score was above the preliminary estimate of 108.5. At the same time, the coincident index that measures current economic situation, fell more-than-estimated to 113 in February from 114.9 a month ago. The preliminary estimate for February was 113.4.
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The international watchdog charged with overseeing the destruction of Syria's chemical weapons said that 80% of the country's stockpile has now been shipped out or destroyed. "This development will contribute to meeting the 30 June 2014 target set by the OPCW Executive Council for the completion of Syria's entire chemical weapon programme," a statement from the Organisation for the Prohibition of Chemical Weapons said. Syria destroyed its chemical weapons equipment on schedule within weeks of acceding to the UN Chemical Weapons convention last October, but has previously missed several deadlines for shipping its most lethal chemicals out of the country.
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Afternoon Watchlist (all times British Summer Time)

13:55 US Redbook index
14:00 US Housing Price Index
15:00 EU Consumer Confidence Preliminary
15:00 US Existing Home Sales
15:00 US Richmond Fed Manufacturing Index

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Wednesday's Key UK Corporate Events

Sports Direct International Trading Statement
Smiths News Half Year Results
Fenner Half Year Results
ARM Holdings Q1 Results
Avacta Group Full Year Results
Phaunos Timber Fund Limited Full Year Results
AMEC Interim Management Statement
MoneySuperMarket.com Group Interim Management Statement
Record Trading Statement
Creston Trading Statement
Associated British Foods Full Year Results
Reed Elsevier Interim Management Statement
STV Group Interim Management Statement
Spirent Comunications Interim Management Statement
Hammerson Interim Management Statement
Management Consulting Group Interim Management Statement
Carpetright Trading Statement

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Wednesday's Key Economic Events (all times British Summer Time)

02:45 China HSBC Manufacturing PMI Preliminary
07:58 France Markit Manufacturing PMI Preliminary
07:58 France Markit Services PMI Preliminary
08:28 Germany Markit Manufacturing PMI Preliminary
08:28 Germany Markit Services PMI Preliminary
08:58 EU Markit Manufacturing PMI Preliminary
08:58 EU Markit PMI Composite Preliminary
08:58 EU Markit Services PMI Preliminary
09:30 UK Bank of England Minutes
09:30 UK BOE MPC Vote
09:30 UK Public Sector Net Borrowing
11:00 UK CBI Industrial Trends Survey
13:58 US Markit Manufacturing PMI Preliminary
14:45 US Markit Services PMI Preliminary
15:00 US New Home Sales
15:30 US EIA Crude Oil Stocks change

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

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