(Alliance News) - The following is a summary of top news stories Monday.
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COMPANIES
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Pershing Square Capital Management's deal to take a 10% stake in Vivendi's Universal Music will need to be restructured, following concerns from the US regulator. In early June, the entertainment conglomerate agreed with special purpose acquisition company Pershing Square Tontine Holdings over a 10% stake sale in Universal Music. Pershing Square Tontine - a New York-listed "blank cheque company" - is owned by William Ackman's Pershing Square Capital and is looking to make a USD5 billion to USD7 billion acquisition. The deal was conditional on shareholder approval and the US regulatory processes. But, the US Securities & Exchange Commission raised concerns over the structure of the deal, so London-listed Pershing Square Holdings will step in instead of Pershing Square Tontine, in an effort to ensure Vivendi is "not left at the altar". Vivendi approved the restructure. The deal for Pershing Square Tontine to take a 10% stake in Universal was based on a EUR35 billion enterprise value for Universal.
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UK video game services provider Sumo Group said it has agreed to a takeover offer by Chinese technology giant Tencent Holdings that values Sumo's equity at GBP919 million. Existing shareholder Tencent offered 513 pence per share in cash for the Sheffield, England-based provider of creative and development services to the video game industry, a 43% premium to Sumo's closing price on Friday of 358.00p. The stock was up 42% to 508.84p on Monday morning. Tencent already owns 8.8% of Sumo and, including these shares, has support for its offer representing 33.4% of Sumo's equity. It has been a shareholder since 2019.
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AstraZeneca said Imfinzi has been approved in China for the treatment of extensive-stage small cell lung cancer. Small cell lung cancer is a highly aggressive, fast-growing form of lung cancer, Astra said. The approval by China's National Medical Products Administration was based on positive results from the Caspian phase three trial, with safety and efficacy in the China cohort of patients consistent with the global results.
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Sanofi said the US Food & Drug Administration has approved fexinidazole as the first all-oral treatment for sleeping sickness. The drug was approved for "both stages of the Trypanosoma brucei gambiense form of sleeping sickness, human African trypanosomiasis, in patients 6 years of age and older and weighing at least 20 kilogrammes," Sanofi said. Fexinidazole was developed as part of a partnership with the non-profit research and development organization Drugs for Neglected Diseases initiative, which conducted clinical trials for the treatment with Sanofi. Current treatments for sleeping sickness - which is a parasitic disease transmitted by the bite of an infected tse-tse fly - are "effective", but can be "burdensome", Sanofi said. The pharma firm said patients and health workers need to infuse or inject current treatments, requiring hospitalisation - especially challenging for those in remote areas.
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A group of specialist engineers employed at a Rolls-Royce aero engine plant will launch a campaign of industrial action on Monday after fears for the long-term future of the site resurfaced. Members of Unite at the site in Barnoldswick in Lancashire went strike before Christmas in opposition to plans to scale back production at the factory. Unite said a deal was agreed guaranteeing the future of the factory, but fresh fears have emerged. Unite regional officer Ross Quinn said: "Our members have been forced to take strike action as the long-term viability of Barnoldswick is once again under threat."
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The economy minister in the German state of Brandenburg, Joerg Steinbach, has expressed confidence that Elon Musk's Tesla will obtain environmental approval for its new factory near Berlin. "From the point of view of the [Brandenburg] Economy Ministry, there are no discernible reasons for refusing the approval at the present time," although it depends on whether any unforeseen issues arise during the process, Steinbach said in response to an information request. Originally, production was planned to start in July, but Tesla now expects it to start at the end of 2021.
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MARKETS
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Stock prices were lower globally on Monday, with rising cases of Covid-19 taking the glean off of 'freedom day' in the UK. "While restrictions have been eased, the fact that Covid is so rife within the country does breed the kind of caution that could inhibit the exact economic activity encouraged by the government," commented Josh Mahony at IG. Airline stocks were down, after the UK government unexpectedly imposed a quarantine on travellers returning from France, despite other amber-list countries now not requiring quarantine. British Airways-owner IAG was down 3.5% in London, Ryanair down 2.6% and easyJet down 4.6%.
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CAC 40: down 1.9% at 6,335.55
DAX 30: down 2.0% at 15,237.20
FTSE 100: down 1.8% at 6,883.90
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Hang Seng: closed down 1.8% at 27,489.78
Nikkei 225: closed down 1.3% at 27,652.74
S&P/ASX 200: closed down 0.9% at 7,286.00
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DJIA: called down 1.0%
S&P 500: called down 0.8%
Nasdaq Composite: called down 0.5%
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EUR: down at USD1.1773 (USD1.1810)
GBP: down at USD1.3716 (USD1.3788)
USD: down at JPY109.78 (JPY110.15)
GOLD: down at USD1,803.60 per ounce (USD1,813.55)
OIL (Brent): down at USD71.72 a barrel (USD73.27)
(currency and commodities changes since previous London equities close)
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ECONOMICS AND GENERAL
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UK Prime Minister Boris Johnson has appealed to people to exercise their new freedoms with caution as most mandatory lockdown restrictions in England are finally lifted. Social-distancing rules which, in one form or another, have governed people's lives for over a year finally ended on Monday morning at one minute past midnight. Face masks are no longer mandatory in shops and on public transport, limits on gathering have gone and the work from home guidance has ended. Nightclubs, theatres and restaurants can fully reopen, while pubs are no longer restricted to table service only. But with Covid-19 cases continuing to soar and renewed warnings about the pressure on the NHS, there was no mood of celebration in government. Johnson is spending so-called 'freedom day' self-isolating at his official country residence at Chequers after being "pinged" by NHS Test & Trace following a contact with Health Secretary Sajid Javid, who subsequently tested positive for the virus. Johnson and Chancellor Rishi Sunak, who also met Javid on Friday, initially tried to get round the requirement to quarantine by saying they would join a daily workplace testing programme being trialled by the Cabinet Office. However they were forced into a hasty U-turn amid widespread public anger at their "special treatment" while tens of thousands of people were being forced to miss work or school and stay home.
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UK house prices climbed to a fourth successive monthly record, figures from property portal Rightmove showed. The average UK house price rose 0.7% monthly in July to GBP338,447, the largest July climb since 2007. Annually, house prices were 5.7% higher. It was the fourth monthly high in a row, and Rightmove noted UK house prices have climbed by 6.7% in just six months. "Rightmove analysis has identified a shortfall of 225,000 homes for sale which, if available, would have helped to maintain a more normal level of property stock for sale and would have helped stabilise prices. This stark shortfall, along with frenzied buyer activity, is fuelling record high prices and leading to record lows in available stock for sale," Rightmove explained.
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UK consumer confidence returned to pre-pandemic levels in the past three months as government support helped bolster personal finances, according to new figures. The latest quarterly consumer tracker by Deloitte improved to a reading of -9% in the three-month period to the end of June, its highest reading since the final quarter of 2019. Deloitte's analysis is based on responses from more than 3,000 UK consumers between June 18 and 21, as the UK's final lockdown phase was postponed. The latest figures highlight recovering confidence amid optimism that spending will rebound further when restrictions are eased further on Monday. For consumers, confidence in job security has risen by four percentage points compared to the previous quarter, the report said.
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Construction output returned to growth in May in Europe, data from Eurostat showed. In May, seasonally adjusted production in the construction sector increased by 0.9% in the euro area and by 0.7% in the EU as a whole from the month before. In April, production in construction had fallen by 0.4% in the euro area and by 0.1% in the EU compared to March. Compared to a year before, production in construction in May increased by 14% in the euro area and by 12% in the EU.
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The world's leading oil producers agreed on Sunday to continue to modestly boost output from August reaching a compromise after the United Arab Emirates blocked a deal earlier this month. An OPEC+ meeting decided to raise output by 400,000 barrels per day each month from August to help fuel a global economic recovery as the pandemic eases, the group's Vienna-based secretariat said in a media statement. The grouping will "assess market developments" in December, it said. The deal also extends a deadline on capping output from April next year to the end of 2022. Earlier in July, negotiations of OPEC+ members on easing production cuts became deadlocked due to a row between the world's largest oil exporter Saudi Arabia and neighbour the United Arab Emirates. But in a compromise, Sunday's discussions agreed to adjust output quotas next May for the UAE, Iraq, Kuwait, Russia and Saudi Arabia itself, meaning their actual cuts will be less.
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Australia's two largest cities are set to stay under tight Covid-19 restrictions as Melbourne on Monday extended a five-day snap lockdown designed to curb a virulent outbreak. About 12 million people are under lockdown in Melbourne and Sydney, where a month of restrictions has failed to quash an outbreak of the Delta variant. Australia had mostly dodged widespread community transmission in the 18 months since the pandemic began, but is now seeing more than 100 new cases a day, straining contact tracing efforts. The most recent outbreak started mid-June when a foreign aircrew infected a local driver in Sydney. The virus was then carried to Melbourne with a relocation team, prompting a snap lockdown that was due to end late Tuesday, but has failed to reduce new infections to zero. Victoria state on Monday reported 13 new cases.
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By Tom Waite; thomaslwaite@alliancenews.com
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