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(Alliance News) - Stock prices in London opened higher on Wednesday with the UK gambling sector getting a boost after Entain said it was considering a takeover offer from US peer DraftKings.

The FTSE 100 index was up 75.69 points, or 1.1%, at 7,056.67. The mid-cap FTSE 250 index was up 113.53 points, 0.5%, at 23,724.92. The AIM All-Share index was up 4.12 points, 0.3%, at 1,264.25.

The Cboe UK 100 index was up 1.3% at 701.40. The Cboe 250 was up 0.6%, at 21,498.30. The Cboe Small Companies was 0.2% higher at 15,433.69.

In mainland Europe, the CAC 40 stock index in Paris was up 1.1% and the DAX 40 index in Frankfurt was up 0.7%.

In the FTSE 100, Entain was the best performer, up 8.1% at 2,443.00 pence, after the Ladbrokes and Coral betting chains owner provided further details of the takeover approach from Boston, Massachusetts-based Draftkings.

Late Tuesday, Entain had confirmed a report by CNBC that it had received a takeover approach from US sports betting firm DraftKings, but it hadn't provided the price offered.

Entain said on Wednesday that an earlier approach from DraftKings at 2,500 pence per share, which comprised of a combination of DraftKings shares and cash, was rejected. In addition, another proposal was received on Sunday by which DraftKings would offer 2,800p per Entain share, consisting of 630p in cash and the balance payable in new DraftKings Class A common shares.

The latest offer represented a premium of 46% to Entain's closing share price on Monday.

In response, Entain said it would "carefully consider" the proposal and a further announcement will be made as and when appropriate. Shareholders were urged to take no action.

The DraftKings takeover proposal comes after Entain had rejected an USD11 billion offer from Las Vegas, Nevada-based MGM Resorts International in January, saying it undervalued the company.

DraftKings closed down 7.4% in New York on Tuesday at USD52.77, while MGM ended 1.8% lower at USD40.55.

Hargreaves Lansdown analyst Laura Hoy commented: "We suspect that BetMGM is a big part of the reason DraftKings is interested at all, which may mean it will look to offload other parts of the business like the Ladbrokes and Coral physical betting shops down the line, as Caesars Entertainment has done with William Hill's shops. But MGM will have a hand in negotiating the terms of the deal, which could ultimately put DraftKings off following through.

"There's also a chance DraftKing's bold move could push MGM to make another offer for Entain, though we think this possibility is unlikely considering it would require MGM to substantially increase its former offer."

Midcap gambling firms Rank Group and 888 Holdings were up 7.7% and 3.8% respectively, in a positive read-across.

Flutter Entertainment was up 4.5% after the Paddy Power owner said its legal dispute with the US state of Kentucky has been settled in full.

As part of the settlement, Flutter has agreed to pay USD200 million to the Commonwealth of Kentucky in addition to USD100 million previously forfeited. In return, Kentucky has agreed to cease all further actions with respect to the case.

The case related to the reinstatement of a USD870 million fine by the Commonwealth of Kentucky, first imposed in 2010 against subsidiaries of Stars Group, prior its merger with Flutter last year.

Halma was up 1.0% after the safety equipment maker said it has made strong progress in the first half with its financial performance ahead of expectations.

The Amersham-based firm said revenue growth and return on sales has exceeded expectations and historic levels and order intake has been ahead of both revenue this year and of order intake for the same period last year.

Halma expects to report strong organic constant currency revenue and profit growth for the first half of the year to September 30, with profitability benefiting from a slower-than-expected return of variable overhead costs as Covid restrictions eased.

This performance compares to a weaker comparative period in the first half of the 2021 financial year when Halma saw the worst damage from the pandemic, it added.

However, the company warned on higher costs.

"Although we expect to see continued impact on revenue, costs and working capital from increased supply chain, logistics and labour market disruption, we currently expect adjusted profit before tax for the full year to be slightly ahead of our previous guidance. Therefore, our results for the full year are expected to be more weighted to the first half than in previous years," Halma said.

In the FTSE 250, PZ Cussons was the worst performer, down 8.5%, even as the personal care products maker reported strong annual results.

For the financial year ended May 31, revenue was GBP603.3 million, up 2.7% from GBP587.2 million. Pretax profit was GBP63.2 million, more than triple GBP18.3 million a year ago.

PZ Cussons raised its total dividend 5.0% to 6.09p from 5.80p.

However, separately, PZ Cussons said for the first quarter to August 28 revenue declined 9% driven by its Hygiene business, with Carex soap in the UK experiencing double-digit decline.

Looking ahead, PZ Cussons pointed to inflationary pressures on commodities and freight with price increases being implemented across its markets in Nigeria and Indonesia.

Assuming no further cost pressures, or global supply or other Covid-related disruption, PZ Cussons expects to deliver financial 2022 adjusted pretax profit within the current range of expectations. It posted adjusted pretax profit of GBP68.6 million in financial 2021, compared to consensus estimates which were in a range between GBP63 million to GBP65 million.

The Japanese Nikkei 225 index ended down 0.7%. In China, the Shanghai Composite was up 0.2%, reopening after being closed for the Mid-Autumn festival, while markets in Hong Kong were closed for a holiday. The S&P/ASX 200 in Sydney closed up 0.3%.

The Bank of Japan on Wednesday decided by an 8-1 majority vote to keep a negative interest rate of 0.1%.

BoJ also kept its loose monetary policy unchanged. The bank said it will continue expanding the monetary base until the year-on-year rate of increase in the consumer price index exceeds 2% and stays above the target in a "stable manner".

The pound was quoted at USD1.3650 early Wednesday, up from USD1.3643 at the London equities close on Tuesday.

The euro was priced at USD1.1725, up from USD1.1714. Against the Japanese yen, the dollar was trading at JPY109.58, higher against JPY109.26.

Brent was quoted at USD75.45 a barrel Wednesday morning, up sharply from USD73.84 late Tuesday. Gold stood at USD1,779.85 an ounce, down from USD1,781.03.

Wednesday's economic calendar has the latest Ifo economic forecast for Germany at 0900 BST.

By Arvind Bhunjun; arvindbhunjun@alliancenews.com

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