(Alliance News) - The following is a summary of top news stories Wednesday.
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COMPANIES
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RSA Insurance Group said it has reached an agreement to be sold in a deal with a two-headed consortium which values the insurer at GBP7.2 billion. The deal, first announced earlier this month, will see the insurer divided between Canada's Intact Financial Corp and Scandinavian insurer Tryg AS. Under the deal, RSA shareholders will receive 685 pence in cash for each share, the same amount proposed earlier in November. In addition, RSA shareholders will be entitled to receive the insurer's interim dividend of 8p. The acquisition price represents a premium of 51% to November 4's closing price in London, being the day before the announcement of Intact and Tryg's possible offer. The deal will see Intact run RSA's Canadian, UK and international operations, while Tryg will take RSA's Swedish and Norwegian businesses. The two will co-own RSA's Danish business.
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British Land Co posted an interim loss and declared a much reduced dividend, the property developer's first payout since the start of the Covid-19 pandemic. British Land said its EPRA net tangible assets fell 10% to 693p at September 30 from 773p at March 31. British Land posted a widened pretax loss of GBP757 million for the half-year to September 30 from GBP440 million a year ago. Revenue came in 22% lower year-on-year at GBP255 million from GBP328 million. "Today, despite the unprecedented situation brought about by Covid, our business is more financially resilient, our focus on mixed use London campuses is clear and we have an unrivalled pipeline of opportunitie," said Chief Executive Officer Chris Grigg. Grigg departs from the role on Wednesday, replaced by finance chief Simon Carter. More positively, the company confirmed it will be resuming dividend payments with an interim payout of 8.4p. The 8.4p payout is, however, a 47% chop from 15.97p a year earlier.
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SSE said its profit was sharply higher in the first half of its financial year after substantial exceptional gains, in large part relating to its asset disposal programme. Perth, Scotland-based SSE posted a GBP829.5 million profit for the six months ended September 30, multiplying from GBP128.9 million a year before. The big change, SSE said, reflects: "Pretax exceptional gains of GBP654.4 million recognised during the year mainly driven by a combination of progressing with the group's GBP2 billion plus non-core asset disposal programme and IFRS 9 remeasurements on operating derivatives." This compares to a GBP99.6 million pretax exceptional loss the prior year. Adjusted pretax profit, which excludes exceptional items, fair value movements on financing derivates, and other factors, fell 26% to GBP193.9 million from GBP263.4 million. Revenue declined 7.5% to GBP2.82 billion from GBP3.05 billion.
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Croda International said it has agreed a deal to buy a Spanish flavours and fragrance firm for EUR820 million, and outlined plans for a bumper equity placing to partly fund the buy. The speciality chemical company struck a deal to buy Fragrance Spanish Topco, which trades as Iberchem, for EUR820 million. The Murcia-based firm employs about 850 people and has a commercial presence in 120 countries, Croda noted. "Approximately 80% of its sales are fragrances for Personal Care and Home Care products, areas where it has a similar customer profile to Croda," the company explained. Croda added that roughly 20% of Iberchem's sales come from its Scentium flavours business, "principally for food, pharmaceutical and oral care applications". Croda Chief Executive Officer Steve Foots said: "Our expansion into the fast-growing fragrances and flavours market further increases our exposure to Consumer Care markets and adds another exciting growth adjacency to Croda's market-leading position."
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Pfizer is "very close" to applying for an emergency use approval for its Covid-19 vaccine after collecting safety data to submit to US regulators, the company's chief executive officer said Tuesday, according to a report. The pharmaceutical giant announced last week preliminary results from a late-stage clinical trial showing the injections it had co-developed with Germany's BioNTech SE was more than 90% effective after the second dose. "We are very close to submitting for an emergency use authorization," Albert Bourla told medical news site Stat. "We will announce it as soon as we are doing it." Pfizer has previously said it expects to contact the US Food and Drug Administration to apply for an Emergency Use Authorization by the third week of November, meaning the announcement could be days away.
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MARKETS
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A stronger pound was heaping pressure on London's internationally-exposed FTSE 100 on Wednesday, the UK stock index lagging moderate gains seen in Paris and Frankfurt. RSA Insurance shares were up 3.9%.
"Sterling's gains, at a time of make-or-break for the negotiations between the EU and the UK over a future trade deal, mean investors are relatively confident in a positive outcome because despite lingering difficulties in reaching a consensus over matters such as fishing, neither side appears willing to walk away from the negotiating table without a trade deal," said Ricardo Evangelista, senior analyst at ActivTrades.
Wall Street is on course for a higher start, with the Dow Jones pointed up 0.3%, the S&P 500 up 0.1%, and the Nasdaq Composite up 0.2%.
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FTSE 100: down 0.1% at 6,357.11
FTSE 250: up 0.2% at 19,560.97
AIM ALL-SHARE: up 0.5% at 1,017.81
GBP: higher at USD1.3288 (USD1.3254)
EUR: higher at USD1.1878 (USD1.1866)
GOLD: lower at USD1,876.23 per ounce (USD1,887.43)
OIL (Brent): higher at USD44.31 a barrel (USD43.40)
(changes since previous London equities close)
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ECONOMICS AND GENERAL
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The annual rate of UK consumer price inflation accelerated by more than expected in October, figures from the Office for National Statistics showed. Inflation edged up to 0.7% in October from a rate of 0.5% in September. This was higher than market forecasts, according to FXStreet, of 0.6% annual inflation. "The rate of inflation increased slightly as clothing prices grew, returning to their normal seasonal pattern after the disruption this year," said Jonathan Athow, deputy national statistician for Economic Statistics at the ONS. He added: "The cost of food also nudged up, while second-hand cars and computer games also all saw price rises. These were partially offset by falls in the cost of energy and holidays." On a month-on-month basis, prices were flat in October after growth of 0.4% in September. This was still, though, better than expectations of a 0.1% fall.
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UK leader Boris Johnson will answer Prime Minister's Questions remotely as he continues to self-isolate. The prime minister has been confined to Downing Street after being in contact with Tory MP Lee Anderson, who tested positive for coronavirus. Johnson will take part from self-isolation rather than having his deputy Dominic Raab stand-in for him at the despatch box. The prime minister's official spokesman said: "There is an agreement that Prime Minister's Questions will go ahead and the prime minister will take part remotely." Labour leader Keir Starmer will be in the Commons chamber for the weekly clash with the prime minister on Wednesday as usual. The government has been under pressure to extend remote participation in parliamentary debates amid concerns about the spread of coronavirus.
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It is too early to say whether families will be allowed to gather over Christmas, a Cabinet minister warned, despite hopes that social distancing rules will be relaxed over the festive period. Johnson wants to ease coronavirus rules to allow families to be reunited and his government has been working with counterparts in Scotland, Wales and Northern Ireland to agree to a UK-wide approach. But following reports that households would be allowed to mix indoors for a five-day period starting on Christmas Eve, Business Secretary Alok Sharma said it was not yet clear whether that would be possible. "I want to have my mum and dad around, I want to have members of my family around that Christmas table," he told BBC Breakfast. "I just think it's too early to be reaching any conclusions on that. What none of us knows right now is what the infection rate is going to be in different parts of the country." England's national lockdown measures expire on December 2 and are expected to be replaced by a return of regional tiers.
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The eurozone's annual price deflation was stable in October, data on Wednesday showed, though consumer prices ticked up monthly. According to Eurostat, consumer prices slipped 0.3% yearly in the euro area in October, in line with both September's decline and market forecasts. In October of last year, prices rose by 0.7%. In August, consumer prices fell 0.2% on a year before, meaning October was the third month on the bounce of deflation in the eurozone. On a monthly basis, consumer prices were 0.2% higher in October. In the whole of European Union, October's annual inflation was 0.3%, again level with September, but slowed from 1.1% a year earlier.
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Anthony Fauci, the top US expert on the coronavirus, has not yet had contact with president-elect Joe Biden, amid growing concerns that the refusal of President Donald Trump to facilitate the smooth transition of power will cause harm. "If you don't have a smooth transition, you would not optimise any efforts you are doing right now," Fauci said on CNN on Tuesday. Fauci said that issues that should be discussed in the handover are concerns like supply levels of medical goods, including protective gear, as well as the mechanics of the vaccine programme. Trump continues to deny that he lost the election and is maintaining legal battles in the country's courts to try to overturn results in key swing states. Biden himself warned on Monday that the refusal by the White House to follow norms and work with the incoming administration will be damaging.
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