LONDON (Alliance News) - CRH shares are under pressure Monday after the merger between Switzerland's Holcim and France's Lafarge was thrown into doubt, also putting the Irish building products company's separate deal to snap up assets from the pair at risk.
Holcim said its board had concluded that it can no longer pursue a merger with French rival Lafarge SA on the current terms of the proposed deal, and it wants talks about changing the exchange ratio and "governance issues". Lafarge responded by saying it was committed to the deal, but would refuse to negotiate on anything but the exchange ratio.
Holcim wants a bigger share of the combined entity and also changes to the proposed management of the group, a move that's being pushed by its large shareholders after its shares and operating performance outperformed that of Lafarge since the deal was first announced in April last year, according to Bloomberg citing people familiar with the matter.
Under the original terms of the deal, the two companies' shareholders were to get an equal share of the combined group, while Lafarge Chief executive Bruno Lafont was to run it.
London-listed CRH noted the announcements by the two companies, but said its extraordinary general meeting on Thursday will go ahead to allow its shareholders to approve the acquisition of assets being offloaded by Holcim and Lafarge to get the deal through antitrust regulators.
CRH announced last month that it had agreed a EUR6.5 billion deal with the pair to buy assets from the companies primarily in Europe, Canada, Brazil and the Philippines. The Irish building materials company expects the deal to boost earnings per share by about 25% in the first full year of ownership of the assets, which it expects to be 2016.
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Markets: UK stocks are trading higher Monday, with investors focused on the US Federal Reserve's monthly meeting ending on Wednesday. This week will be driven mainly by central bank news, with European Central Bank President Mario Draghi speaking Monday in Frankfurt, the Bank of Japan's monetary policy decision due on Tuesday, and the minutes of the Bank of England's recent monetary policy committee meeting due on Wednesday.
Wall Street is set for a higher start, with stock futures indicating that the DJIA, S&P 500 and Nasdaq 100 will all open up 0.3%.
FTSE 100: up 0.5% at 6,774.45
FTSE 250: up 0.4% at 17,169.68
AIM ALL-SHARE: down 0.1% at 717.01
GBP-USD: up at 1.4782
EUR-USD: up at 1.0528
GOLD: down at USD1,156.25 an ounce
OIL (Brent): down at USD54.18 a barrel
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Other Top Corporate News
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Smiths Group said its Smiths Detection arm has won a USD125 million contract to provide a range of advanced detection equipment for a new terminal in Abu Dhabi Airport. Under the contract it will equip the terminal's hold baggage and passenger screening checkpoints, including providing its HI-SCAN 10080 XCT explosives detection system and its Advanced Threat Inspection X-Ray systems, as well as trace detection scanners, bottle liquid scanners and radiation detectors.
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AstraZeneca announced full results from the PEGASUS-TIMI 54 study, a large-scale outcomes trial that investigated the use of BRILINTA tablets combined with low dose aspirin, compared to placebo combined with low dose aspirin, for the treatment of chronic secondary prevention of atherothrombotic events in patients who had experienced a heart attack one to three years prior to study enrolment. The company noted that Both 90mg and 60mg study doses of ticagrelor with aspirin significantly reduced the primary composite endpoint of cardiovascular death, myocardial infarction or stroke compared to placebo.
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Elliott Advisers said it has nominated three candidates for the board of Alliance Trust, claiming the investment trust has consistently underperformed and continues to make losses via its two operating subsidiaries. Activist investor Elliott, which holds a 12% stake in the company both directly and via funds it advises, said it has nominated Anthony Brooke, Peter Chambers and Rory MacNamara to the board of the trust.
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AIM Movers
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Kefi Minerals shares are up after the Ethiopian Ministry of Mines approved the Tulu Kapi gold project, bringing it a step closer to securing a mining license and said the development of the project will cost USD30 million less than originally expected. Smart Metering Systems is also doing well after it reported strong growth in profit and revenue in 2014, as its expansion in the electricity metering market paid off. Premaitha Health shares are down by more than a third. The stock rose initially when the company said it has inked a deal with Esperite NV to allow Espirite's Swiss subsidiary Genoma to have a right to use Premaitha's IONA test for its non-invasive prenatal testing services, but then plunged when it was accused by a US rival of allegedly infringing patents with some aspects of the test. Regency Mines and Alba Mineral Resources are both down after Alba Mineral said it has raised GBP500,000 in a discounted share placing to back its acquisition of a further stake in Horse Hill Developments Ltd. Alba will use the funding to satisfy the consideration due to Regency Mines for the acquisition of a further stake in Horse Hill Developments, the operator of the Horse Hill prospect in Surrey. Nyota Minerals is down after it reported a wider loss for the first half of its financial year owing to an impairment charge taken on its Northern Blocks property in Ethiopia and said it is undertaking a strategic review of its Ethiopian business. Sirius Petroleum is another faller after it said it is still working towards completing its GBP9.6 million convertible loan with Nima International Ltd, but has had to extend the completion date for the deal.
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Top Economics And General
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The UK government said it is to begin a process of consultation into creating a market through which annuities can be traded, signifying an extension of new freedoms being introduced into pensions and retirement rules. The move to allow people who have already bought annuities to sell them in exchange for a lump sum or place it into drawdown is the latest step being taken by Chancellor of the Exchequer George Osborne to reform retirement rules since using his 2014 budget to abolish an effective requirement on individuals to buy annuities.
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The UK government has launched a review of the business rates system, Chief Secretary to the Treasury Danny Alexander announced. The review, which is set to report back by the government budget in 2016, will examine the structure of the current system, a business property tax which is currently paid on an annual basis on 1.8 million properties in England. The review will consider how businesses use property, what the UK can learn from the systems in use in other countries, and how the system could be modernised to better reflect changes in the value of property, the Treasury said in a statement.
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UK Chancellor of the Exchequer George Osborne is expected to announce tax breaks for the North Sea in the government budget on Wednesday, along with incentives to encourage investment in the sector, The Daily Mail reported. Oil revenues are subject to a higher rate of tax than other corporate levies in order to prevent business from profiteering from a national asset, the newspaper said, but the rate on some upstream profits can hit 80% in some cases, which the industry argues is too high.
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The average asking price for a house in the UK was up 1.0% on month in March, property tracking website Rightmove said. That missed forecasts for an increase of 1.9%, and it was down from the 2.1% gain in February. On a yearly basis, prices climbed 5.4% - also below expectations for 6.5% and down from 6.6% in the previous month. A decline in prices in the London market weighed on the overall index.
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China still has more tools to bolster its economic growth, Premier Li Keqiang said. "The good news is that in the past couple of years we did not resort to massive stimulus measures for economic growth," Li said at a press conference after the conclusion of the annual parliamentary session. But the government has more policy measures at its disposal, he added. If the slowdown in growth affects employment and income, then the government would resort to more measures, he said. The government lowered its 2015 growth target to about 7% last week and Li said achieving even this target will not be easy.
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China's annual parliament closed an 11-day session on Sunday with voting on the Communist Party's policies for more stringent government regulations and economic reforms. Some 3,000 delegates to the National People's Congress, the ruling party's nominal parliament, voted early Sunday to endorse Premier Li Keqiang's state-of-the-nation economic report and other reports in quick-fire voting. Some 86% voted in favour of the annual budget, which includes a rise of 10.1% in China's annual military spending. The government says the increase is needed to fund ongoing modernization of the People's Liberation Army.
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German Chancellor Angela Merkel should present an economic growth plan for Europe, Greek Finance Minister Yanis Varoufakis said, calling for "a new doctrine to unite Europe". His appeal on the Greek television network ANT1 was made at a time of heightening tensions between Greece and Germany over Greek financial aid. "Before she leaves office, Mrs Merkel could leave behind a legacy for Europe, which all could remember as the 'Merkel Plan," as we today remember the Marshall Plan," Varoufakis said.
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Anti-government rallies in cities across Brazil on Sunday drew tens of thousands of people into the streets to protest the administration of President Dilma Rousseff. Rousseff, who started her second four-year term in January, is facing criticism over Brazil's stagnating economy, rising energy costs and a corruption scandal enveloping the state-controlled oil giant Petrobras. Thousands gathered on the sands of Rio de Janeiro's Copacabana Beach, while in the capital Brasilia protesters waving flags and holding signs that read "Impeach Rousseff!" and "Corruption: How much longer are you going to be here?" marched to the National Congress building.
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The US and Iran aim to make tangible progress in a new round of negotiations on Tehran's nuclear programme, both countries' chief diplomats said before the start of a new round of talks in Switzerland. "The coming days will not about proposals, but about concrete results," Iranian Foreign Minister Mohammad Javad Zarif said after arriving in Lausanne for meetings with senior US Secretary of State John Kerry and other senior officials.
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Officials in St Louis County in the US state of Missouri announced they have arrested a suspect in the shootings last week of two police officers during a protest in the city of Ferguson. Jeffrey Williams, 20, faces several charges in connection with the Thursday shooting, in which one officer was shot in the face and a second in the shoulder. Both are out of hospital and recovering, police said.
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Afternoon Watchlist (all times in GMT)
12:30 US NY Empire State Manufacturing Index
13:15 US Industrial Production
14:00 US NAHB Housing Market Index
18:45 EU ECB President Draghi's Speech
20:00 US Total Net TIC Flows
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Tuesday's Key UK Corporate Events
French Connection Group - Full Year Results
Regenersis - Half Year Results
Antofagasta - Full Year Results
Mears Group - Full Year Results
IG Group - Interim Management Statement
Fairpoint Group - Full Year Results
J Sainsbury - Q4 Trading Statement
WANdisco - Full Year Results
Just Eat - Full Year Results
SafeCharge International Group - Full Year Results
Onesavings Bank - Full Year Results
Gfinity - Half Year Results
Good Energy Group - Full Year Results
KBC Advanced Technologies - Full Year Results
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Tuesday's Key Economic Events (all times in GMT)
n/a Japan BoJ Monetary Policy Statement
n/a Japan BoJ Press Conference
10:00 EU Consumer Price Index
10:00 EU Employment Change
10:00 Germany ZEW Survey
10:00 EU ZEW Survey
12:30 US Housing Starts
23:50 Japan Merchandise Trade Balance Total
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19 Jan 2017 10:17
