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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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HSBC Holdings said it will take action to save billions of dollars in costs by 2017, building on the costs Chief Executive Stuart Gulliver has already slashed from the group's annual bill. The London-based banking group said it wants to save a further USD4.5 billion to USD5.0 billion by 2017, with a one-off cost of between USD4.0 billion and USD4.5 billion to achieve those cuts. The group confirmed it intends to sell operations in Turkey and Brazil, though it will keep a presence in the South American country to help serve large corporate clients. It will axe between 22,000 and 25,000 full-time employees between 2014 and 2017, not including Brazil and Turkey, from the 258,000 employed in the whole group at the end of 2014.
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The UK Competition and Markets Authority said it has fast-tracked BT Group's GBP12.5 billion deal to acquire mobile operator EE to a so-called phase 2 investigation, which involves a deeper probe of the deal because the UK's antitrust regulator is concerned it will hit competition. In May, BT asked the CMA to proceed directly towards a phase 2 investigation when it set out its argument for the deal, saying it will be good for competition, investment and innovation. BT said at that time it expects the deal to be completed by the end of March next year.
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Old Mutual is preparing to sell a further stake in OM Asset Management, the boutique asset manager it spun off in a float on the New York Stock Exchange in the autumn of 2014. Old Mutual said it will used the proceeds of the sale for general corporate purposes. The pricing of the offering has yet to be determined, with the number of shares to be sold by Old Mutual also still to be determined. The offering is to be made through global coordinators and joint book-running managers BofA Merrill Lynch, Morgan Stanley, Citigroup, and Credit Suisse.
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South32 said it has decided to delay restarting three of the four high-carbon ferromaganese furnaces at its joint venture operation in South Africa with fellow mining giant Anglo American. South32, a recently created spin-off company from BHP Billiton, said it made the decision to delay the restart of the furnaces at the South African Samancor manganese joint venture due to the decline in high-carbon ferromanganese prices, which have continued to decline in 2015.
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Sky Deutschland said the cash compensation payable to minority shareholders for the transfer of their Sky Deutschland shares has been set at EUR6.68 per share. This follows the completion in November 2014 of Sky PLC's offer for Sky Deutschland and the announcement in February that, as the holder of 96.05% of the shares in Sky Deutschland, Sky was initiating the squeeze out of the remaining 3.95% minority shareholdings. The squeeze out resolution will be approved at an Extraordinary General Meeting of Sky Deutschland scheduled for July 22.
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Just Eat said 41.33% of the shares available under its recently-announced open offer were taken up, and the remainder have been placed so that it raised about GBP445 million to fund the company's acquisition of Menulog Group. The company announced the open offer and placing last month and the open offer closed on Monday. It got valid acceptances for 43.6 million shares under the open offer, and the remaining 61.8 million in the offer were taken up under its placing.
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RPC Group reported higher profits and earnings for its last financial year, helped by acquisitions, and said the current year has got off to a satisfactory start despite adverse exchange rate movements and a time lag in passing through higher polymer prices. The plastic products designer and maker reported a pretax profit for the year to March 31 of GBP67.1 million, up from GBP59.0 million a year earlier, as revenue increased to GBP1.22 billion from GBP1.05 billion. Its closely-watched pretax profit excluding restructuring, impairment charges exceptional items rose to GBP119.0 million from GBP89.5 million. It raised its full-year dividend to 15.4 pence from 13.8p.
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Private equity firm Kohlberg Kravis Roberts sold a further 108.0 million shares in Pets at Home Group, a 21.6% stake in the pet product retailer it listed last year, at 267 pence per share. BofA Merrill Lynch, the bookrunner on the accelerated bookbuild placing, said that KKR's sale of the 21.6% stake the company raised about GBP288 million for the private equity firm. KKR will hold a 24.6% stake in Pets At Home on completion of the placing.
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MARKETS
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UK stocks are lower with Greek debt negotiations taking stage centre, after the Mediterranean country submitted new reform proposals to its international creditors, while Reed Elsevier and Anglo American are the best and worst performers in the FTSE 100, respectively, moving on broker rating changes.
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FTSE 100: down 0.5% at 6,755.07
FTSE 250: down 0.3% at 17,819.17
AIM ALL-SHARE: down 0.1% at 773.24
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The pound is down against the dollar despite data showing the UK trade deficit shrinking by more than expected to a 13-month low in April.
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GBP: down at USD1.5280
EUR: flat at USD1.1275
GOLD: up at USD1180.53 per ounce
OIL (Brent): up at USD63.51 a barrel
(changes since end of previous GMT day)
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ECONOMICS AND GENERAL
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The UK trade deficit narrowed by more than expected to a 13-month low in April, figures from the Office for National Statistics showed. The visible trade deficit narrowed by GBP2.1 billion to GBP8.6 billion in April, the smallest shortfall since March 2014. This was also the largest monthly fall in the deficit since June 2013. The deficit was forecast to narrow to GBP9.9 billion. Exports rose GBP0.7 billion, while imports declined GBP1.5 billion from the prior month.
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The Eurozone economy grew as initially estimated in the first quarter underpinned by widespread contribution from all sub-components. Gross domestic product expanded 0.4%, in line with the estimate published on May 13. The 19-nation currency bloc grew by revised 0.4% in the fourth quarter and 0.2% in the third quarter of 2014. On a yearly basis, economic growth improved to 1% from 0.9% a quarter ago. The annual growth rate also matched flash estimate.
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Greece has submitted new reform proposals to its creditors, sources in Brussels said, a day before Greek Prime Minister Alexis Tsipras is due to hold key talks with German Chancellor Angela Merkel and French President Francois Hollande. "We have received proposals which we are now assessing," an EU source says.
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If Greece were to be forced out of the eurozone, Spain or Italy could suffer the same fate, leading to the collapse of the currency bloc, Tsipras said in an interview. "It would be the start of the end for the eurozone," Tsipras told Italy's Corriere della Sera newspaper.
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US President Barack Obama called on both sides in Athens' debt talks to show flexibility to end the crisis, but he joined Merkel in calling on cash-strapped Greece to introduce tough economic reforms. Greece and its international creditors must show "sufficient flexibility" in order to end the country's economic crisis and head off the threat of Athens defaulting, the US leader told a press conference marking the end of Group of Seven summit in southern Germany. Athens' battle to secure a deal with its creditors to unlock much-needed cash in exchange for reforms has emerged as a key issue at major international meetings, including the two-day G7 leaders summit. In her comments at its conclusion, Merkel said the G7 leaders wanted to see Greece remain a eurozone member state. But she warned that time was running out for the nation to conclude a deal with its creditors - the International Monetary Fund, the European Central Bank and Athens' eurozone partners.
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Ukraine on Monday prohibited Russian troops from entering or leaving the breakaway Moldovan region of Transnistria via neighbouring Ukraine. This gravely isolates landlocked Transnistria, which has functioned as a de-facto autonomous state since the early 1990s with crucial economic and military support from Russia. Now air travel seems to be the Russian military's only mode of transportation to the region, which Moldova considers illegally occupied by Russia.
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By Arvind Bhunjun; arvindbhunjun@alliancenews.com; @ArvindBhunjun
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