(Alliance News) - The FTSE 100 index of London large-cap stocks opened only slightly higher on Thursday, but the mid-cap FTSE 250 was getting a boost from Vivo Energy and Hochschild Mining.
Vivo Energy has accepted a takeover offer from its largest shareholder, while Hochschild Mining is confident its Peru operations are back on track.
The FTSE 100 was up just 4.93 points at 7,291.25 early Thursday. The mid-cap FTSE 250 index was up 79.72 points, or 0.3%, at 23,246.78. The AIM All-Share index was up 4.06 points at 1,205.23.
The Cboe UK 100 index was up 0.1% at 723.05. The Cboe 250 was up 0.2% at 20,687.08, and the Cboe Small Companies was flat at 15,242.61.
In mainland Europe, the CAC 40 in Paris was up 0.4%, while the DAX 40 in Frankfurt was up 0.5% early Thursday.
"With a US holiday dampening activity today, European markets are likely to struggle once again, as potentially wider virus restrictions across the continent continue to dampen sentiment," Oanda Senior Market Analyst Jeffrey Halley said.
Wall Street is closed for the Thanksgiving Day holiday on Thursday, reopening for a half-day session on Friday.
In London, Vivo Energy was sitting atop the midcaps, up 20% in London and 22% in Johannesburg, as the pan-African retailer of Shell and Engen-branded fuels and lubricants said it has agreed to a takeover offer from energy and commodity trading company Vitol Group.
Vivo will recommend a USD1.85 per share offer from Vitol Investment Partnership that values Vivo at USD2.3 billion.
In sterling terms, the offer is roughly a 25% premium to its London closing price of 111.40 pence on Wednesday - which implies a market cap of about GBP1.4 billion. The offer includes planned dividend.s Vivo was trading at 133.60p in London on Thursday morning.
Vitol noted it has been in talks with one of Vivo's founding shareholders, Helios, over a potential deal for its 27% stake in Vivo.
"Due to the existing Vitol shareholders' 36.0% shareholding, the agreement with Helios meant that there was a risk that minority shareholders may become disadvantaged through acceptance of an offer that they might otherwise not have wanted to accept, in order not to remain a shareholder in an illiquid position. As a result, the independent Vivo directors engaged with BidCo to negotiate a fair value for the minority Vivo shareholders," Vivo explained.
Vivo Chair John Daly added: "The offer from Vitol represents an attractive value in cash for Vivo shareholders, and Vitol's proven track record of supporting Vivo's long-term growth plans will support Vivo in continuing to deliver benefits to its wider stakeholders."
Also sharply higher, Hochschild Mining "welcomed" the move by the presidency of the Council of Ministers in Peru, which the miner believes clarified comments made late last week by the head of Cabinet.
Hochschild was up 16% in early trading, recouping most of its losses following a torrid session on Monday. The miner started the week trading at 165.30p and is now hovering around 145p, after having sunk as low as 69.90p this week.
The stock had tanked on Monday after Hochschild reported the risk that the Peruvian government may close two of its three operating gold and silver mines, one of which is its largest in terms of production and has represented around three-quarters of its cashflow.
However, the Peruvian government on Wednesday reaffirmed its respect for the current legal framework.
"In particular, the company notes the government's commitment to upholding the rule of law and that its express recognition of the continued rights of mining companies to request extensions and modifications of existing permits for mining and exploration activities," Hochschild said Thursday.
"In line with the announcement, the company's operations in southern Ayacucho, Pallancata and Inmaculada will continue to operate under the existing legal framework."
Pub chain Mitchells & Butlers gained 5.0% as it said its trading has been encouraging since pandemic restrictions have been lifted in the UK but noted there are still challenges with continued cost pressures.
In the 52 weeks to September 25, its pretax loss narrowed to GBP42 million from a GBP123 million loss the year before. Operating profit was up to GBP81 million from GBP8 million.
Revenue slumped 28% to GBP1.07 billion from GBP1.48 billion. Mitchells noted Drinks like-for-like revenue in the period was down 22% but, more promisingly, Food revenue was up 2.5%. In total, like-for-like sales was down 9.6%.
Mitchells said, for the eight weeks since the period-end, like-for-like sales versus a similar period in financial 2019 are up 2.7%, comprising an increase in like-for-like food sales of 9.5% and a decrease of like-for-like drink sales of 4.8%. Volumes remain in decline by between 10% and 15%.
Chief Executive Phil Urban said: "The trading environment remains challenging and cost headwinds continue to put pressure on the sector. However, we have strengthened our balance sheet and returned to profitability and cash generation, allowing us to resume our capital plan and Ignite programme which will deliver sales and efficiency improvements to help combat these challenges."
On AIM, DX Group sunk 32% as its shares are set be suspended after delaying the release of its annual results.
"The company's Audit & Risk committee has recently raised a corporate governance inquiry relating to an internal investigation commenced during the financial year ended July 3, 2021. The inquiry has yet to be concluded, and the process will delay the completion of the audit, but will be expedited as quickly as possible," the company said.
DX does not expect the investigation to be completed before January 2, 2022, which marks the six month point after its financial year-end. As a result, its shares will be suspended from trading.
"The board remains confident that DX is well-placed to continue to increase its market share and make progress over the new financial year," it said, noting that trading is in line with expectations.
Sterling was quoted at USD1.3347 early Thursday, higher than USD1.3328 at the London equities close on Wednesday. The euro traded at USD1.1221 early Thursday, higher on USD1.1195 late Wednesday.
Against the yen, the dollar was soft at JPY115.32 versus JPY115.38 late Wednesday in London.
In Asia on Thursday, the Nikkei 225 in Tokyo closed up 0.7%. The Shanghai Composite shed 0.2%, while the Hang Seng index added 0.2%.
The S&P/ASX 200 in Sydney closed up 0.1%.
Gold was quoted at USD1,794.80 an ounce early Thursday, up on USD1,790.62 on Wednesday. Brent oil was trading at USD82.30 a barrel, down from USD82.73.
By Paul McGowan; paulmcgowan@alliancenews.com
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