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LONDON (Alliance News) - UK shares are being led higher Monday by UK pharmaceutical firm Shire, which said prior to the market open that it is "willing to recommend" to its shareholders a raised takeover offer from US drugs maker AbbVie Inc.
The revised proposal comprises GBP24.44 in cash and 0.8960 of a share of the new company for each existing Shire share. Based on AbbVie's share price on Friday, the new offer has a value of GBP53.20 per Shire share, or GBP31.33 billion in total.
Shire leads FTSE 100 gainers, up 2.7% at 5,000.00p.
Here is what you need to know at the UK market open:
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MARKETS
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FTSE 100: up 0.4% at 6,715.39
FTSE 250: up 0.3% at 15,495.29
AIM ALL-SHARE: up 0.2% at 771.66
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Hang Seng: up 0.5% at 23,345.39
Nikkei 225: closed up 0.9% at 15,296.82
DJIA: closed up 0.2% at 16,943.81
S&P 500: closed up 0.2% at 1,967.55
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GBP-USD: flat at USD1.7122
EUR-USD: up at USD1.3620
GOLD: down at USD1,317.97 per ounce
OIL (Brent): up at USD106.48 a barrel
(changes since end of previous GMT day)
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ECONOMICS AND GENERAL
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Monday's Key Economic Events still to come
(all times British Summer Time)
holiday France Bastille Day
10:00 EU Industrial Production
16:30 US 3-Month and 6-Month Bill Auction
18:00 EU ECB President Draghi's Speech
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Israel bombed 40 more targets in the Gaza Strip Monday, and Palestinian militants launched at least 20 rockets across the border despite a call by UN Secretary-General Ban Ki-moon for a truce. The death toll rose to 172 on the seventh day of the Israeli offensive, with more than 1,200 wounded, Gaza Health Ministry spokesman Ashraf al-Qedra said. The majority of casualties have been civilians, including children and women. Ban expressed concern despite a clear Security Council demand for a ceasefire, the situation in and around the Gaza Strip appeared to be worsening.
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Iraq's parliament Sunday failed for a second time in less than a month to pick candidates for several top posts, and move towards forming a government, as Sunni insurgents seize control of large swathes of the country. Mahdi Hafez, the most senior lawmaker, adjourned the session until Tuesday to allow more time for consultations, saying the blocs had not yet resolved their disagreements over who to nominate for the posts. Parliament has failed since its election in late April to break the impasse that has blocked the process of choosing the country's top three positions of president, prime minister and parliamentary speaker. Outgoing Prime Minister Nuri Al-Maliki, who has been in office since 2006, is fighting for a third term despite criticism from opponents who accuse him of monopolizing power and marginalizing the Sunni minority.
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Acknowledging that the situation in Ukraine was degrading, Russian President Vladimir Putin and German Chancellor Angela Merkel called for a dialogue between the government in Kiev and pro-Russian separatists. The two leaders met in Rio de Janeiro before the World Cup final. Russia will host the next World Cup in 2018. They "noted the necessity of the soonest possible resumption of work of the contact group (on Ukraine), possibly in the format of a video conference," said Putin's spokesman Dmitry Peskov and Merkel's spokesman Steffen Seibert. Putin said it was unacceptable that shells from the Ukrainian military have landed on Russian soil. His comments came after fighting left dozens dead in the restive Donetsk region of Ukraine and claimed the first fatality on Russian territory.
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JAPAN MAY CAPACITY UTILIZATION DOWN 0.7% ON MONTH VS 2.2% FALL IN APRIL
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Standard & Poor's Ratings Services affirmed the sovereign ratings on Germany and raised the outlook on Ukraine to 'stable'. Germany's coveted 'AAA' rating was affirmed with 'stable' outlook. S&P said the Germany economy has demonstrated its ability to absorb large economic and financial shocks. The 'stable' outlook reflects the expectation that Germany's public finances will continue to withstand potential financial and economic shocks and that consensus in favor of prudent economic policies will remain. The rating agency also affirmed the 'CCC' long-term foreign currency sovereign credit ratings on Ukraine and upgraded the outlook to 'stable' from 'negative'.
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Foreign ministers from Western powers and Iran failed to unblock major disagreements on a planned nuclear deal Sunday, British Foreign Secretary William Hague said after one day of high-level talks in Vienna. Hague and his counterparts from the US, France and Germany pressured Iran to make the necessary concessions for clinching a nuclear deal before the window of opportunity for negotiations closes on July 20. Iran and six world powers have set themselves this deadline for reaching an agreement to curb Iran's nuclear programme, scrap sanctions against the Islamic state, and end more than a decade of diplomatic tensions between the two sides.
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Mario Goetze came off the subs' bench to lift Germany to a fourth World Cup title, 1-0 over Argentina on Sunday as the nation's golden generation finally delivered. Man of the Match Goetze chested a cross from Andre Schuerrle and volleyed with his left foot past Sergio Romero for the winning goal which set the scene for captain Philipp Lahm to lift the World Cup trophy amid his overjoyed team-mates. Joachim Loew's team, who hammered hosts Brazil 7-1 in the semis, became the first European team to lift the World Cup in the Americas with the victory at the Maracana. Germany won their fourth world title following 1954, 1974 and 1990, then also 1-0 against Argentina, and the first big one overall since Euro 1996 after several near misses in recent years.
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BROKER RATING CHANGES
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CITIGROUP ADDS EXPERIAN TO 'FOCUS LIST EUROPE'
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CITIGROUP REMOVES AVIVA FROM 'FOCUS LIST EUROPE'
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TRADERS: NUMIS RAISES HALFORDS GROUP TO 'ADD' ('HOLD') - TARGET 545 PENCE
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COMPANIES - FTSE 100
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Rolls-Royce Holdings PLC said it has won a contact to supply the new Airbus A330neo with its Trent 7000 engine, while easyJet PLC said it has appointed CFM International SA as its engine supplier for its own Airbus jet order. Rolls-Royce said Airbus has selected its new Trent 7000 as the exclusive engine for the new aircraft, the seventh Trent engine in the series. easyJet said it has appointed CFM International as its engine supplier. Under the terms of the deal CFM will provide 270 engines to power its firm order of 35 Airbus current generation A320 aircraft and 100 Airbus new generation A320neo aircraft. CFM will also provide engines for any future exercise of the 100 purchase rights over new generation aircraft.
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FTSE 100 listed Shire PLC said it is "willing to recommend" a raised takeover offer from US drugs maker AbbVie Inc's to shareholders. The revised proposal comprises GBP24.44 in cash and 0.8960 shares of the new company for each existing Shire share. Based on AbbVie's share price on Friday, the new offer has a value of GBP53.20 per Shire share, or GBP31.33 billion in total. Under the new proposal Shire shareholders would own around 25% of the new company. Shire said its board is in detailed discussions with AbbVie regarding other terms of the offer, and cautioned there could be certainty that any firm offer will be made. Under UK takeover rules, AbbVie currently has until July 18 to make a formal bid or walk away.
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Online retailer MySale Group PLC said it has partnered with its new investor Sports Direct International PLC to launch a Sports Direct offering in Australia and New Zealand. The recently listed retailer said Sports Direct, the UK's biggest sporting goods retailer by revenue, plans to launch in Australia and New Zealand by forming an online partnership with OzSale.com.au, part of the MySale Group, giving Sports Direct immediate access to its 12 million customers. "Its Australian and New Zealand sites will be launched later this year and be ready to ship goods in the same month," MySale said in a statement Monday.
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COMPANIES - FTSE 250
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AVEVA Group PLC maintained its expectations for the full year on a constant currency basis, although it highlighted that sterling has continued to strengthen against a number of currencies in territories in which it operates. The engineering data and design IT systems provider said that it had not seen any noticeable shift in trends since reporting its full year results in May, and noted that its first quarter is seasonally its "least significant."
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COMPANIES - MAIN MARKET AND AIM
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Dee Valley Group PLC said it has appointed Ian Plenderleith as chief executive officer with effect from August 26. Plenderleith joins from Estonian water firm AS Tallinna Vesi, where he has served as CEO since 2008. David Strahan, the current CEO, will resign from the board with effect from August 26, 2014, said the company. Strahan will remain available to assist in the current price review process until October 3, 2014.
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Cambria Africa PLC said it is seeking to rescind a USD2.7 million settlement it received from Lonrho Ltd last year and re-launch legal proceedings for total claims of USD10 million, over what Cambria called mismanagement and fraudulent representation. The southern Africa-focused investment company achieved final settlement of USD2.7 million from Lonrho in July 2013 relating to various claims over loan assets and alleged mismanaged contracts. However, at the time, claims by Cambria against Lonrho regarding three leases of aircraft to previous Lonrho subsidiaries were excluded from the settlement. On Monday, Cambria said it is now seeking to rescind the settlement and make further claims of mismanagement against Lonrho in court.
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Helical Bar Sells 3 Assets For GBP37M, 6.9% Premium To Book Value
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K3 Business Technology Says FY Results To Be In Line With Market Expectations
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TT Electronics Acquires Roxspur Measurement & Control
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Quindell Confident In Meeting KPIs For FY Market Expectations; Full Year Revenue Guidance GBP800-900 Million; Says Cash At June 30 Ahead Of Plan At GBP84M
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SThree H1 Pretax Profit GBP8.2M Vs GBP6.7M; Revenue GBP341.7M Vs GBP291.9M; Interim Dividend Maintained At 4.7p; Confident In Medium Term Prospects For Business
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Off-license chain Conviviality Retail PLC reported a drop in its pretax profit for its last financial year, hit by IPO and acquisition costs, while revenue in the year year was held back by planned store closures. The owner of off-licence chains Bargain Booze and Rhythm and Booze, said its pretax profit for the financial year ended April 27 was hit by IPO costs and acquisition costs, having acquired Wine Rack during the year. Its pretax profit for the year was GBP4.8 million, down from GBP6.6 million a year earlier. Excluding exceptional costs, its profit increased to GBP9.3 million, up from GBP7.1 million, which it said was driven by an improvement in gross margin, strong cost control and a reduction in financing costs following the financial restructure conducted at its IPO.
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KEFI Minerals PLC said ongoing drilling at its Jibal Qutman's South Zone and 4K Hill region in Ethiopia continues to find strong gold mineralisation following further drilling. The gold and copper exploration and development company, with operations in Saudi Arabia and Ethiopia, said best results from its further drilling include a 17 metre region at 3.72 grams per tonne of gold and a 3 metre space at 7.21 grams per tonne of gold.
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Monday's Scheduled AGMs/EGMs
Aveva Group
London & St Lawrence Investment Co
Mid Wynd International Investment Trust
Finsbury Growth & Income Trust
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By Tom Waite; thomaslwaite@alliancenews.com; @thomaslwaite
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