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(Alliance News) - Calisen has agreed to a GBP1.43 billion takeover offer by infrastructure funds led by BlackRock.
The Manchester-headquartered provider of smart energy meters said Friday that its board has agreed unanimously to the offer, with shareholders set to receive 261 pence per share in cash.
Calisen closed at 206.60p each in London on Thursday, and the deal represents a 50% premium to the firm's three-month volume weighted average closing price as of Thursday of 174p.
Calisen shares were up 25% at 259.20p early Friday.
The takeover, by Coyote Bidco, is considered "fair and reasonable" by Calisen's board, who intend to unanimously recommend the offer. The companies said support has been received from shareholders representing 73.6% of its equity.
Coyote is a consortium made up of two parts: Global Energy & Power Infrastructure Fund III and a series of West Street funds, which are managed by Goldman Sachs.
The first half, Global Energy & Power, is acting on behalf of its investment manager BlackRock Alternatives Management and its co-investor Ninteenth Investment Co, an indirectly wholly-owned subsidiary of Mubadala Investment Co PJSC. The second half of the consortium is made up of West Street International Infrastructure Partners III AIV, West Street Global Infrastructure Partners III AIV, West Street European Infrastructure Partners III AIV, Broad Street Credit Holdings Europe Sarl and GLQ Holdings.
"Bidco believes that Calisen represents an attractive opportunity to invest in the energy transition sector via one of the largest owners of smart meters in the UK with strong growth potential and opportunities to expand into adjacent sectors," Coyote said.
Here is what you need to know at the London market open:
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MARKETS
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FTSE 100: down 0.4% at 6,573.26
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Hang Seng: up 0.3% at 26,500.07
Nikkei 225: closed down 0.4% at 26,652.52
DJIA: closed down 69.55 points, or 0.2%, at 29,999.26
S&P 500: closed down 0.1% at 3,668.10
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GBP: up at USD1.3296 (USD1.3285)
EUR: up at USD1.2139 (USD1.2119)
Gold: down at USD1,834.10 per ounce (USD1,836.95)
Oil (Brent): down at USD50.60 a barrel (USD50.83)
(changes since previous London equities close)
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ECONOMICS AND GENERAL
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Friday's Key Economic Events still to come
0930 GMT UK Bank of England quarterly inflation attitudes survey
0830 EST US produce price index
1000 EST US University of Michigan survey of consumers
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Banks in the UK can deal with a shock that is much worse than economic problems caused by Covid-19 and still continue to lend, the Bank of England has found. The country's biggest lenders have enough capital buffers to get them through the crisis, after building them up since the 2008 financial crisis. The central bank's Financial Policy Committee also said that it would allow lenders to reduce their so-called countercyclical capital buffer - a type of rainy day fund - to 0% for at least another year. This will give lenders confidence that they can reduce the buffer without then being required to jack it up when officials say so. The committee also said that most risks of a potential no-deal Brexit to the UK's financial stability have been mitigated. The financial system has had time to prepare for potential Brexit outcomes. It said: "Financial stability is not the same as market stability or the avoidance of any disruption to users of financial services. Some market volatility and disruption to financial services, particularly to EU-based clients, could arise."
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German consumer prices remained in deflation territory in November, data from the Federal Statistical Office showed, with price pressure hitting its lowest level since the beginning of 2015. Consumer prices fell 0.3% year on year in November, in line with flash estimates, but a sharper slide than the 0.2% decline posted for October. Consensus, according to FXStreet, had expected November's inflation rate reading to show minus 0.3%. This was the fourth time this year that the inflation rate was negative, Destatis noted, and the last time the inflation rate was this low was in January 2015.
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EU leaders struck a deal to unblock the EUR1.8 trillion coronavirus financial recovery and long-term budget package, European Council President Charles Michel announced on Thursday, officially ending a weeks-long blockade by Poland and Hungary. "Now we can start with the implementation and build back our economies," Michel tweeted during the Brussels summit, without disclosing the details of the agreement. Warsaw and Budapest had been blocking the passage of the hotly-anticipated package - composed of a 2021-2027 spending plan and 750-billion-euro stimulus fund - in a dispute over a new mechanism tying access to EU funds to rule-of-law standards. The new tool allows cash to be withheld if certain violations of basic standards, such as compromised judiciary independence, are deemed to threaten budgetary integrity. Both capitals, which are the subject of growing concern over the erosion of core democratic standards and are facing multiple cases at the bloc's top court, protested that this was ideologically-fuelled meddling in their domestic affairs.
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EU leaders agreed on Friday after a long night of wrangling to set a more ambitious target of cutting greenhouse gas emissions by 55% by 2030. "Europe is the leader in the fight against climate change," European Council president and summit host Charles Michel declared on Twitter. European Commission chief Ursula von der Leyen said: "Europe will reduce emissions by at least 55% by 2030. It puts us on a clear path towards climate neutrality in 2050." The leaders had debated climate change measures for eight long hours, dragging a summit that started on Thursday through into the morning. Poland, backed by some other coal-dependent central European countries had been holding out for guarantees on funding to pay for a clean energy transition.
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BROKER RATING CHANGES
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JPMORGAN CUTS NATWEST TO 'NEUTRAL' ('OVERWEIGHT') - TARGET 180 PENCE
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GOLDMAN SACHS CUTS LAND SECURITIES TO 'NEUTRAL' ('BUY') - TARGET 799 (688) PENCE
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JEFFERIES CUTS TEAM17 TO 'UNDERPERFORM' ('HOLD') - TARGET 668 PENCE
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COMPANIES - FTSE 100
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Sanofi and GlaxoSmithKline said their Covid-19 vaccines will not be ready until the end of 2021, after interim results showed a low immune response in older adults. "Sanofi and GSK announce a delay in their adjuvanted recombinant protein-based Covid-19 vaccine programme to improve immune response in older adults," a statement said, adding that the vaccine's potential availability had been pushed back "from mid-2021 to the fourth quarter of 2021".
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Rolls-Royce said its restructuring plans are on track to deliver its targeted GBP1.3 billion cost savings by 2022; with at least GBP1 billion of near-term cash cost mitigations confirmed for 2020. Part of this, Rolls has previously said, involves cutting at least 9,000 jobs by the end of 2022, with more than 5,500 being cut before the end of 2020. Chief Executive Warren East said: "We have taken decisive actions to protect and reposition our business in difficult and uncertain trading conditions, including the impact from a second wave of Covid-19. We have made rapid progress on our restructuring programme and the consolidation and reorganisation of our Civil Aerospace footprint is well underway." The jet-engine maker said the benefits from improving its Civil Aerospace business have been "delayed" due to Covid-19. Rolls said the unit saw a period of rapid growth and new engine programme launches, while R&D investment demands were falling and returns improving. The aerospace firm said its Defence unit has remained "resilient", with a strong order book and 2021 forecast sales "well covered".
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InterContinental Hotels has reached an agreement to further amend its revolving credit facility following an amendment in April this year. The new amendment includes an additional waiver of the covenants at December 31, 2021, together with a relaxation to the covenants at June 30, 2022 and December 31, 2022. The leverage ratio covenant has been amended to require net debt to Ebitda of less than 7.5-to-1 at June 30, 2022 and less than 6.5-to-1 at December 31, 2022. "The covenant relaxations have been based on a theoretical severe downside scenario. The minimum liquidity covenant of USD400 million will continue whilst the amendments are in place and will be tested at December 31, 2021, June 30, 2022 and December 31, 2022," the hotel operator said.
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COMPANIES - FTSE 250
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Quilter confirmed it has initiated a strategic review of Quilter International to evaluate its role in delivering the company's future growth ambitions. The London-based wealth management company said the review is at an early stage and as such the outcome is not yet known. Quilter noted that options range from a decision to retain Quilter International through to a disposal of the business, but it has not yet decided on any particular option and as such there can be no certainty that any potential transaction will be concluded. Isle of Man-based Quilter International provides tax-efficient offshore savings and investment management.
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COMPANIES - MAIN MARKET AND AIM
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London estate agency Foxtons said its October and November revenue was up 2% year-on-year at GBP14.8 million. Within this, sales revenue increased by 11% to GBP5.4 million; lettings revenue was down 1% to GBP8.0 million; and mortgage broking revenue was down 14% to GBP1.3 million. Foxtons noted group revenue for the eleven months to the end of November was down 15% year on year at GBP83.6 million. For 2020, adjusted operating profit is expected between GBP1.0 million and GBP1.5 million, compared to a loss of GBP700,000 in 2019. Foxtons also unveiled a GBP3.0 million share buyback programme, expected to end in March.
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COMPANIES - GLOBAL AND OTHER
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An in-depth investigation into the GBP31 billion mega-merger between Virgin Media and O2 has been launched by the Competition & Markets Authority. The Phase 2 investigation will be launched immediately and comes following a request from the companies for the watchdog to give the deal the green light quickly. Under a "fast-track" process, investigators from the CMA will look at whether the deal could lessen competition for UK customers of the mobile phone and broadband giants. The CMA said it is "concerned that, following the merger, Virgin and O2 may have an incentive to raise prices or reduce the quality of these wholesale services, ultimately leading to a worse deal for UK consumers." Previously the CMA blocked a merger between O2 and rival network Three, although it has previously waived through BT Group's deal with EE.
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Zurich Insurance said its US subsidiary Farmers Group and Farmers Exchange will buy the property and casualty unit of US insurer Met Life for USD3.9 billion in a deal that will expand it reach. Zurich said it expects the deal, which it hopes will conclude by the middle of next year pending regulatory approval, will be profitable in its first year and deliver a return on investment of approximately 10% from 2023. "The transaction gives the Farmers Exchanges a truly nationwide presence and access to new distribution channels with the potential to accelerate growth," it said in a statement. The Farmers Exchange is a subscriber-owned cooperative, but it uses Zurich-owned Farmers Group to carry out insurance activities. The deal gives Farmers a 10-year exclusive distribution agreement for its personal insurance products through MetLife's group benefits platform that has 3,800 companies and 37 million employees. The MetLife property and casualty unit acquired has 2.4 million policies that brought in USD3.6 billion in net premiums last year and has 3,500 employees.
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Friday's Shareholder Meetings
Volution Group PLC - AGM
Bellway PLC - AGM
Star Phoenix Group Ltd - AGM
UP Global Sourcing Holdings PLC - AGM
KEFI Gold & Copper PLC - GM re share placing
Marlowe PLC - GM re grant of additional authorities to allot shares
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By Tom Waite; thomaslwaite@alliancenews.com
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