(Alliance News) - Stock prices in London are seen inching lower at the open on Friday, though European peers are set to start in the green after US President Joe Biden said a bipartisan deal on an infrastructure package as been sealed.
The stimulus package would still need the backing of US lawmakers.
"There are still huge potholes. The balance of power in Congress already does not make passage assured," analysts at Rabobank explained on Friday.
In early corporate news, UDG Healthcare said a private equity firm is considering raising its offer for the company, which the healthcare services provider will accept.
Guarantor loans provider Amigo said it has reached an agreement for a further extension of the performance trigger waiver period for a securitisation facility. A UK watchdog has also outlined plans to probe both Amazon and Alphabet's Google, over concerns of fake reviews on their sites.
IG futures indicate the FTSE 100 index is to open one point, at 7,018.97. The blue chip index closed 35.91 points higher, or 0.5%, at 7,109.97 points on Thursday. London's large-cap index is up about 1.3% so far this week.
The CAC 40 in Paris and DAX 30 in Frankfurt are seen opening 0.1% higher on Friday.
UDG said that suitor Nenelite, following talks with some of the FTSE 250-listed firm's shareholders, is mulling an improved takeover bid of 1,080 pence per share. This would value UDG's share capital at around GBP2.72 billion.
Nenelite, an affiliate of private equity manager Clayton, Dubilier & Rice, made a previous offer of 1,023p per share, which valued UDG's share capital at GBP2.61 billion.
"The board of UDG has indicated to Bidco that if the possible increased final offer is made it intends to recommend it," UDG added.
"The board of UDG confirms that it has not received any other proposals from any third party regarding an alternative proposal to acquire UDG since the date of the 2.5 announcement and confirms it is not in discussions with any third parties regarding an alternative proposal to acquire UDG."
Amigo on Friday said it a sealed a deal to extend the waiver period for a securitisation facility performance trigger to September 24, from June 25. It had been extended to June 25 back in November.
Since Amigo has suspended all new lending activity, the size of the financing has reduced to GBP100 million from GBP250 million, it noted.
"All cash generation arising from customer loans held within the facility is restricted and will continue to be used during the extended waiver period extension to further reduce the outstanding balance of the facility. As of the date of this extension, the facility was drawn at GBP27 million," Amigo said.
The company added that talks with the UK Financial Conduct Authority are still ongoing. This could see revised terms for its scheme of arrangement or even insolvency, Amigo cautioned.
At the end of December, Amigo pursued a scheme of arrangement in order to attain certainty on the total liabilities from customer complaints. It believed that a scheme would prove to be the best vehicle for addressing customer redress claims, but admitted that the plan would not allow all claims arising from unaffordable lending to be paid in full.
The UK High Court rejected its scheme to settle the compensation claims back in mid-May. The scheme would have made at least GBP15.0 million available to a million past and present customers. There is also the potential for a further GBP20.0 million and annual contributions worth 15% of Amigo's pretax profit over the next four financial years. Some 95% of customers had voted in favour of the scheme.
Elsewhere in London, online building materials seller CMOStores.com has plotted a float on the AIM junior market.
CMO explained it sells over 75,000 products - including tiles, roofing materials and insulation - through its seven websites.
The UK has seen a boom in home improvement amid the Covid-19 pandemic, benefitting the likes of Travis Perkins and Kingfisher.
"CMO is disrupting a GBP27 billion predominantly offline market with a digital first proposition and market leading product choice, supported by high quality customer service and technical expertise," CMO added.
CMO did not price its potential float but it said it plans to list in early-July.
The UK's competition watchdog said it has opened a "formal probe" into Amazon and Google. The Competition & Markets Authority said this is due to concerns that the duo have not done enough to fight fake reviews on their platforms.
"The move comes after an initial CMA investigation, which opened in May 2020, and assessed several platforms' internal systems and processes for identifying and dealing with fake reviews," the CMA said.
"The CMA's investigation into fake reviews is part of a broader programme of CMA work, which includes establishing a new pro-competition regulatory regime for digital markets, to curb the power of big tech."
Equities in Asia were boosted by the US infrastructure agreement. The Nikkei 225 in Tokyo ended up 0.7% in late trade, while the S&P/ASX 200 rose 0.5% in Sydney. The Shanghai Composite was 1.1% higher in late trade and the Hang Seng in Hong Kong was up 1.4%.
"The bipartisan US infrastructure agreement announced overnight lifted Wall Street, particularly growth stocks, flowing over into Asian markets today," OANDA analyst Jeffrey Halley noted.
Sterling was quoted at USD1.3931 early on Friday in London, up from USD1.3900 at the equities close on Thursday. The euro stood at USD1.1946, improved from USD1.1930. Against the yen, the dollar was trading at JPY110.81, down from JPY110.86.
The economic events calendar on Friday US personal consumption expenditure index figures for May released at 1330 BST - the core PCE reading is the Federal Reserve's preferred gauge of inflation.
Brent oil was quoted at USD75.62 a barrel on Friday morning in London, up from USD75.50 late Thursday. Gold was quoted at USD1,779.58 per ounce, largely flat against USD1,779.00.
By Eric Cunha; ericcunha@alliancenews.com
Copyright 2021 Alliance News Limited. All Rights Reserved.
