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LONDON (Alliance News) - The following is a summary of top news stories Wednesday.
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COMPANIES
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US-based drugmaker AbbVie Inc has set out its case for a takeover of FTSE 100-listed Shire Wednesday, saying it believes it is offering "Shire shareholders compelling immediate value", after Shire rebuffed three indicative takeover approaches last week.
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Shire said that the US District Court for the District of New Jersey has ruled that patents protecting the British company's Vyvanase drug to treat Attention Defecit Hyperactivity Disorder had been infringed by five pharmaceutical manufacturers who want to bring out generic versions of the drug. The court ruled that the patents remain valid. Actavis, Amneal Pharmaceuticals, Mylan Pharmaceuticals Inc., Roxane Laboratories Inc, and Sandoz Inc have filed so-called Abbreviated New Drug Applications for generic versions of Vyvanase, which is patent protected until 2023.
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Land Securities Group has acquired a 30% stake in the Bluewater shopping centre in Kent from Australian property business Lend Lease Group in a deal worth GBP656 million in cash. FTSE 100-listed Land Securities also acquired the full asset-management rights for the centre and 110 acres of surrounding land for GBP40 million. The overall net initial yield after expiry of rent free periods is 4.1%. The deal comes after UK press reports suggested that rivals British Land and Hammerson were also looking to buy the stake in the shopping destination which attracts around 27 million visitors a year. The centre totals 1.8 million square feet and is home to over 330 retailers, including House of Fraser and John Lewis. It also includes 13,000 parking spaces.
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Babcock International Group and Balfour Beatty said their nuclear joint venture has been given the green light for the third phase of a contract to construct a new maintenance facility at the Sellafield nuclear plant in a deal worth a total of GBP160.0 million. The facility will be used to retrieve radioactive waste from silos. The joint venture, 55% owned by Babcock International and 45% by Balfour Beatty, will begin work on the third phase immediately.
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The US units of HSBC Holdings and Royal Bank of Scotland Group have been blocked from increasing any capital distribution they make to the parent companies until at least 2015, after the banks asked for extensions to the deadlines by which they have to submit revised capital plans to the US Federal Reserve. The Fed had previously said they were unhappy with the plans for governance and internal controls at the units, and had demanded improvements. Wednesday's ruling also impacts Citigroup Inc and Spain's Banco Santander SA.
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Bunzl said it expects to report 6% revenue growth at constant exchange rates for the first half of 2014, due to underlying revenue growth of about 2% and an uplift from acquisitions. However, it reiterated that its reported results will be hit by foreign exchange fluctuations. Bunzl said it expects all of its business areas to show positive underlying revenue growth and improved operating margins. Two new acquisitions will give a boost to its safety business in the Netherlands and expand its cleaning and hygiene supplies business in Brazil.
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Stagecoach said that profit rose in its last financial year, as revenue grew in each of its businesses and margin increased in its London bus and North American operations. Operating profit rose 80% in North America as it expanded its Megabus network there. It increased its full-year dividend by 10.5%, and said trading in the current financial year is in line with its expectations. Pretax profit in the year to end-April came in at GBP158.0 million, up from a restated GBP154.3 million last year.
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Premier Oil has appointed Tony Durrant as chief executive officer with immediate effect. Durrant has been with the company since 2005, serving as finance director. Before this he worked at Lehman Brothers, latterly as managing director and head of the european natural resources group.
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easyHotel, one of the portfolio of companies owned by billionaire entrepreneur Stelios Haji-Ioannou, has set its initial public offering price at 80 pence a share, meaning it will have a market capitalisation of GBP50 million when it starts trading on AIM on Monday, lower than its previous estimates. easyHotel's pricing came as Fundsmith Emerging Equities Trust's shares rose in early dealings after its IPO on the main market in London, and private hospitals company Spire Healthcare Group said it intends to list on the main market, raising new funds for the business as well as allowing its private equity owner to realise some of its investment.
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MARKETS
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Stock markets are lower across the UK, following a sell-off late in Monday's US session and amid concerns over the deteriorating conflict in Iraq. With little in the data calendar to shift sentiment, the FTSE 100 came close to a two-month low in early trade.
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FTSE 100: down 0.7% at 6737.75
FTSE 250: down 0.6% at 15457.1
AIM ALL-SHARE: down 0.5% at 778.84
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The pound has ground against the dollar since the Bank of England governor Mark Carney watered down his message from the previous week about an early interest rate rise.
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GBP-USD: down at USD1.6969
EUR-USD: flat at USD1.3602
GOLD: down at USD1312.61 per ounce
OIL (Brent): down at USD113.90 a barrel
(changes since end of previous GMT day)
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ECONOMICS AND GENERAL
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Iraqi government forces have taken full control of the country's largest oil refinery after clashes with Islamist-led insurgents, state-run broadcaster Iraqiya TV reported online. Elite troops battled fighters from the militant Islamic State in Iraq and the Levant in the vicinity of the refinery in Biji and fully secured all access roads to the facility, the broadcaster said, citing an unnamed security official. The refinery, about 200 kilometres north of Baghdad, accounts for almost a third of Iraq's refining capacity. "The refinery is now secured by large security forces, who are able to protect it and repulse any potential aggression from ISIL gunmen," the official said. The claim could not be independently verified.
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US Secretary of State John Kerry met with Kurdish leader Massoud Barzani in northern Iraq on Tuesday during his second unannounced visit to the country in two days to urge regional leaders to participate in Baghdad's next government. Kurdistan's Rudaw television reported that Kerry also met with Nechirvan Barzani, prime minister of Kurdistan and a number of Kurdish leaders. Kerry told the US-based ABC News that the Iraqi parliament would convene on July 1 to begin work to form a government. He said that Prime Minister Nouri al-Maliki "says he is committed to the constitutional process, wants to see the parliament convene on the 1st of July, and will work to try to create a government of unity and a government that can bring Iraq together."
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The ceasefire in Ukraine was shaken Tuesday by the downing of a military transport helicopter by eastern Ukraine separatists. Nine soldiers died in the attack. The army said another two soldiers were killed in 35 attacks on government troops. After the latest violence President Petro Poroshenko met with Ukrainian military officers and warned separatists that he could not rule out ending the ceasefire. Just hours before, Russian President Vladimir Putin sent a clear signal of de-escalation. He asked the Russian parliament to revoke its authorization for the use of force in Ukraine in order to back the peace process between government troops and separatists in that country.
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German consumer confidence is set to improve in July, survey data from market research group GfK showed. The forward-looking consumer sentiment index rose to 8.9 in July from a revised 8.6 points in June, as economic expectations rose to a three-year high. Economists had forecast the indicator to rise to 8.6 points from June's original estimate of 8.5. The economic expectations index rose 7.7 points to 46.2 in June. Willingness to buy gained 3.7 points to reach 53.2. Meanwhile, income expectations fell by 0.6 point to 47.2 in June. The survey suggests that private consumption will rise 1.5% in 2014.
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Chancellor Angela Merkel rejected any easing in eurozone austerity rules. She was speaking to the German parliament in Berlin, a week after a political rival, Economics Minister Sigmar Gabriel, had called for looser government borrowing rules for states that commit to reforms. Merkel, who was to represent Germany at the European summit on Thursday and Friday in Brussels, defended the Stability and Growth Pact, which regulates EU governments' borrowing, saying it "provides a multiplicity of instruments of flexibility."
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The French economy is likely to log a meagre growth this year and remain below the government's target, a quarterly report published by the statistical office Insee revealed Tuesday. Gross domestic product is forecast to grow 0.7% in 2014, after rising 0.4% in 2012 and 2013. The government estimate 1% growth this year. The acceleration in activity should be driven in particular by manufacturing, while construction is forecast to shrink for the third consecutive year. Insee predicts 1.2% growth in manufacturing, while a contraction of 2.6% is estimated for construction. It forecast 0.3% GDP growth in each quarter of the second half of 2014.
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An index measuring corporate service prices in Japan was up 3.6% on year in May, the Bank of Japan said on Wednesday, standing at 102.5. That topped forecasts for an increase of 3.2% following the 3.4% increase in April. On a monthly basis, prices added 0.2% after surging 2.6% in April.
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Libyans go to the polls Wednesday to elect a new parliament for the oil-rich North African country, which remains prey to turmoil three years after a revolution drove long-term leader Moamer Gadafi from power. Citizens will vote for 200 members of a successor assembly to the General National Congress, the interim parliament elected in 2012. Thirty-two seats are reserved for women. Candidates are required to run as individuals rather than as nominees of political parties.
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EU leaders will dust off their ceremonial pens Friday to sign off on closer ties with Ukraine, Georgia and Moldova - closing ranks in defiance of Russian misgivings. But that is where unity is likely to end at their summer Brussels summit. The EU is struggling to agree on who should manage the bloc in the future as EU Commission president and the political showdown is expected to come to a head this week.
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Italy's Prime Minister Matteo Renzi scored an unprecedented victory in last month's European Parliament elections, campaigning with the slogan "Let's change course." As his country takes over the EU's six-month rotating presidency on July 1, Rome's young, brash and ambitious leader is pledging to export the same motto to Brussels. "We want a change of mentality, a leap forward for the entire Union," the 39-year-old said Friday. Renzi is the rising star on Europe's political scene. His Democratic Party took more than 40% of the votes in May's poll, becoming one of the few ruling parties in Europe that could claim victory over eurosceptic and populist rivals.
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