(Alliance News) - Stock prices in London are seen rising at the open on Monday after record highs in the US on Friday.
In company news, blue-chip miner Anglo American confirmed it has made a formal offer to acquire Sirius Minerals. Tonic water maker Fevertree Drinks warned on annual revenue as UK trading over Christmas disappointed, and defence contractor BAE Systems made two acquisitions.
IG futures indicate the FTSE 100 index is to open 13.74 points higher at 7,688.30. The blue-chip index closed up 64.75 points, or 0.9% at 7,674.56 Friday.
Anglo American confirmed it is making a cash offer for Sirius Minerals of 5.50 pence per share, which values Sirius at GBP404.9 million.
The offer price is a 34% premium to Sirius Minerals's closing price of 4.10 pence on Friday.
Earlier this month, Anglo had said it was advanced talks to buy the cash-strapped potash mine developer, which is building the Woodsmith polyhalite mine near Whitby in North Yorkshire.
"Anglo American's recommended offer provides greater certainty for Sirius' shareholders, employees and wider stakeholders, while bringing the prospects for the development of this potential tier 1 project closer to reality. We intend to bring Anglo American's financial, technical and product marketing resources and capabilities to the development of the project, which of course would be expected to unlock a significant and sustained associated employment and economic stimulus for the local area," said Anglo American Chief Executive Officer Mark Cutifani.
Fevertree Drinks said its 2019 performance was below board expectations - though still higher than the year before - due to a subdued trading in the UK over the Christmas period.
Fevertree said 2019 revenue is to come in at GBP260.5 million, up 9.7% from GBP237.4 million in 2018.
"As reported, the wider retail environment in the UK experienced a challenging Christmas with the mixer category not immune from the weak consumer confidence and corresponding slowdown in spending. Whilst Fevertree remained the clear market leader, the expected improvement in trading during this important period did not materialise with the macroeconomic uncertainty leading to a subdued end to the year across both the on- and off-trade," the company said.
In addition, Fevertree said margins are lower than expected as it continues to invest in the brand for the long term growth, particularly as it seeks to make inroads in the US.
As such, Fevertree said earnings are set to be down 5% in 2019 from 2018. Gross and earnings before interest, tax, depreciation and amortisation margins are expected to be down 49% and 28% in 2020, respectively.
BAE Systems said it is to acquire the Military Global Positioning System business of Florida-based Collins Aerospace for USD1.9 billion in cash. In addition, BAE is to acquire a radios business from US defense contractor Raytheon for USD275 million in cash.
"The strategic and financial rationale is strong and these proposed acquisitions, which are focused on areas of highest priority defence spending, will further enhance the group's opportunity for continued growth in Electronic Systems. We look forward to welcoming the employees of the two businesses to the company, as we work together to help drive our business forward successfully," said BAE CEO Charles Woodburn.
In the US on Friday, Wall Street ended higher, with the Dow Jones Industrial Average up 0.2%, S&P 500 up 0.3% and Nasdaq Composite up 0.4%. All three major stock indices closed at record highs on Friday.
Financial markets in the US are closed on Monday for the Martin Luther King Day holiday.
"Friday's positive finish for US markets looks set to spill over into a positive open for markets in Europe today, however activity could well be subdued due to the US being closed for Martin Luther King Day," CMC Markets analyst Michael Hewson said.
"The feel-good factor appears to be being driven by a number of factors including better-than-expected economic data, as well as the dialling back of trade tensions between the US and China as the low hanging fruit of a phase one trade deal was being signed off," Hewson added.
The Japanese Nikkei 225 index closed up 0.2% Monday. In China, the Shanghai Composite closed up 0.7%, but the Hang Seng index in Hong Kong is down 0.7%.
The pound was quoted at USD1.2990 early Monday, down from USD1.3030 at the London equities close on Friday.
The euro was USD1.1099 early Monday, flat against USD1.1094 late Friday. Against the yen, the dollar was trading at JPY110.18, flat from JPY110.17 late Friday.
Gold was quoted at USD1,561.25 early Monday, up from USD1,556.62 late Friday.
Oil was quoted at USD65.60 early Monday, up from USD64.74 late Friday.
By Arvind Bhunjun; arvindbhunjun@alliancenews.com
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