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LONDON (Alliance News) - UK shares have started the week in a positive direction Monday, with M&A activity distracting from renewed weakness in oil prices and a mixed US jobs report on Friday.

Irish drug giant Shire said on Sunday it has agreed to acquire the US's NPS Pharmaceuticals for USD46.00 per share in cash, in a deal worth a total of USD5.2 billion. The deal comes just three months after the collapse of a GBP32 billion takeover deal for Shire from US-based AbbVie Inc.

"The acquisition of NPS serves to underscore that Shire's appetite to become a leading biotech company has only increased since Abbvie walked away," comments Mick Cooper, an analyst at Edison Investment Research.

Shire shares are up 1.6% early Monday.

In the FTSE 250, AO World shares lead gainers, up 4.4%, after saying its website revenue rose 38% in its fiscal third quarter which includes the key Christmas trading period.

Here is what you need to know at the UK market open:
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MARKETS
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FTSE 100: up 0.3% at 6,518.31
FTSE 250: up 0.1% at 16,032.83
AIM ALL-SHARE: up 0.3% at 705.47
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Hang Seng: closed up 0.5% at 24,026.46
Nikkei 225: closed for holiday
DJIA: closed down 1.0% at 17,737.37
S&P 500: closed down 0.8% at 2,044.81
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GBP-USD: down at USD1.5137
EUR-USD: flat at USD1.1847

GOLD: up at USD1,227.32 per ounce
OIL (Brent): down at USD48.62 a barrel

(changes since end of previous GMT day)
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ECONOMICS AND GENERAL
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Monday's Key Economic Events still to come
(all times in GMT)

holiday Japan Coming-of-Age Day
15:00 US Labor Market Conditions Index
17:40 US Fed's Lockhart speech
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The Chancellor is working on an emergency UK tax cut in a bid to reverse the decline in investment in the North Sea, The Sunday Times reported. George Osborne told the paper that "more action" is needed to boost the industry after the fall in the oil price to USD49 per barrel, down 57% in the last six months. The fall in the oil price has resulted in a sharp fall in North Sea drilling and a slew of job and pay cuts. "I don’t want to pre-empt the budget but I can see that may well involve further reducing the burden of tax on investment in the North Sea," said Osborne.
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The British economy expanded at a slower pace in the fourth quarter, results of a survey by the National Institute of Economic and Social Research, or NIESR, showed Friday. According to the NIESR GDP estimate, Quarter-on-quarter GDP growth slowed to 0.6% in the fourth quarter from 0.7% in the third quarter. The NIESR said that GDP grew 2.6% annually in 2014. This follows a 1.7% rise in 2013.
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Ireland's construction sector maintained its strong growth momentum at the end of the year, as new orders continued to expand sharply, survey data from Markit Economics showed. The Ulster Bank Construction Purchasing Mangers' index fell slightly to 63.1 in December from 63.5 in the previous month. Any reading above 50 indicates expansion in the sector. The average reading for 2014 as a whole was the highest since the series began in mid-2000.
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JAPAN ECONOMY TO GROW 1.5% IN FY 2015: CABINET OFFICE
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Europe, the US and Canada will step up their fight against terrorism and do more to tackle the challenge posed by foreign fighters in the wake of this week's attacks on Paris, French Interior Minister Bernard Cazeneuve said Sunday. "We are determined to fight together against terrorism," he said after hosting talks in Paris with US Attorney General Eric Holder, Canadian Public Safety Minister Steven Blaney and ministers from 10 other European countries facing the issue of Western citizens returning from fighting in foreign Islamist campaigns.
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More than 3.7 million people took to the streets of France on Sunday to honour the 17 victims killed in the terrorist attacks that rocked the country in the past week. Joining the march in Paris were 40 world leaders, who locked arms in a show of unity against terrorism and extremism.
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Greek Prime Minister Antonis Samaras promised Saturday that he has a plan to create 770,000 new jobs by 2021 should he be returned to office in snap elections later this month. He made his comments in a campaign speech televised nationally. The promised jobs would be in seven key areas, including tourism, shipping, agriculture and pharmaceuticals. They would pump up Greek gross domestic product by EUR54 billion. Greece's unemployment rate currently stands at about 26%. Samaras also promised tax relief and a reform of the social welfare system.
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Indonesian Navy divers on Monday retrieved the flight data recorder from the AirAsia plane that crashed last month with 162 people on board, the search chief said. "At 7.11 am the search team managed to lift a part of the black box, namely flight data recorder," said Bambang Sulistyo, the head of the National Search and Rescue Agency. The device was wedged beneath a wing of the aircraft, he said. The cockpit voice recorder had not been found, Bambang said.
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The US House of Representatives passed legislation Friday to approve construction of a controversial cross-country oil pipeline in a move by the freshly empowered Republican majority that challenges President Barack Obama's threat to veto. The lower chamber of Congress approved 266-153 the bill to authorize construction of the Keystone XL Pipeline from the Canadian border to Texas. The upper Senate was expected to take up the bill this week.
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BROKER RATING CHANGES
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BERENBERG CUTS ITV TO 'SELL' ('HOLD') - TARGET 184 PENCE
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TRADERS: INVESTEC CUTS COBHAM TO 'SELL' ('REDUCE')
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BARCLAYS RESUMES AMEC WITH 'EQUAL WEIGHT' - TARGET 1250 PENCE
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BARCLAYS CUTS JOHN WOOD TO 'EQUAL WEIGHT' ('OVERWEIGHT') - TARGET 8.5 (10.25) P
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BARCLAYS CUTS HUNTING TO 'EQUAL WEIGHT' ('OVERWEIGHT') - TARGET 800 (1050) P
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COMPANIES - FTSE 100
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Shire said it has agreed to acquire the US's NPS Pharmaceuticals for USD46.00 per share in cash, in a deal worth a total of USD5.2 billion. The Dublin-based pharmaceutical giant said the acquisition has been approved unanimously by the boards of both Shire and NPS Pharmaceuticals. Shire said it expects the deal to add to non-generally accepted accounting principles earnings per share from 2016 onward. The acquisition will be effected by a tender offer and be funded from Shire's cash resources, as well as existing and new bank facilities.
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AstraZeneca said its biologics research and development arm MedImmune has inked a licensing deal with privately held biotechnology firm Omnis Pharmaceuticals. Under the deal MedImmune has a license to develop, and if successful, commercialise Omnic's lead oncolytic virus programme.
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Housebuilder Taylor Wimpey reported strong growth in completions and average selling prices for 2014, and said it is entering 2015 with a record order book, giving it confidence in its prospects as it starts the first year of its new medium-term target period. In a statement, Taylor Wimpey said it completed 12,454 homes in 2014, up 6% from 11,696 in 2013, and it achieved an average selling price of GBP234,000, up 11% from GBP210,000 a year earlier. It said its order book stood at nearly GBP1.40 billion at the end of 2014, up 12% from GBP1.25 billion a year earlier.
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International Consolidated Airlines Group late Friday said its revised offer for Irish flag carrier Aer Lingus Group has been rejected. IAG Group made a revised cash offer of EUR2.40 per Aer Lingus share, which was an improvement on the company's original offer of EUR2.30 per share. Aer Lingus has rejected the revised offer as it still feels it undervalues the company, and IAG said there is no certainty another offer will be made.
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Royal Bank of Scotland Group is looking to put most of its Asian corporate banking business up for sale, Bloomberg reported citing a person familiar with matter. The report said that the Chief Executive Officer Ross McEwan would be holding a series of meetings in Singapore on Sunday to consider ways to scale back the lender's Asian business. The lender said last month that it's shutting its Japanese trading business. Quoting the person, the report indicated that the bank has about 2,000 employees in the Asia-Pacific region that could be affected. RBS would probably keep some operations in Singapore offering clients dollar, euro and yen fixed-income products.
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COMPANIES - FTSE 250
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Hikma Pharmaceuticals said it will now be preparing to launch its colchicine 0.6 milligram capsules, after Takeda Pharmaceuticals USA Inc failed in its bid to block the distribution of the capsules. The US District Court for Delaware had denied Takeda's motion for a preliminary injunction in relation to the distribution of Hikma's colchicine capsules, and Himka said Monday that Takeda was unsuccessful in appealing this decision. Hikma said it will market the colchicine capsules under the brand name Mitigare, and also will prepare to launch an authorised generic of Mitigare to increase "patient access" to the product.
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Synergy Health said the US Federal Trade Commission has requested additional information from both it and STERIS Corp in regards to STERIS's proposed USD1.9 billion cash and share takeover offer for the company. This is the second request for information and documentary material from the FTC. Synergy said that both companies are cooperating with the FTC in the review of the acquisition, and noted that whilst both companies continue to work on closing the deal in the first quarter of 2015, this second request may delay the completion of the acquisition.
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Online domestic appliances retailer AO World said website revenue rose 38% in its fiscal third quarter which includes the key Christmas trading period, with sales spiking around Black Friday but remaining strong in the run-in to the festive season. It added that it remains confident that it will meet full-year expectations. In a statement, the retailer said website revenue was up 38% on the year in the three months to end-December, while total revenue, which includes third-party retail and logistics, rose 26%.
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Afren said it is considering its options for the Barda Rash field in the Kurdistan region of Iraq after the reserve estimate for the prospect was revised down substantially. Afren said an updated competent person's report on the Barda Rash field is expected to show a material reduction to its previously-published estimates on reserves and resources. The FTSE 250-listed explorer said it expects the total reserve estimate for the field to be revised down to 250 million barrels of oil from 1.24 billion barrels previously.
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The Unite Group said it has acquired a development site, subject to planning, in the centre of Coventry, and plans to build a home for about 280 students in time for the 2017/18 academic year.
In a statement, the student accommodation company said the scheme is expected to achieve returns in line with Unite's targets for regional development and the total development cost, including the cost of the land, is expected to be approximately GBP13 million. It said the scheme will continue to drive its earnings visibility and net asset value growth.
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COMPANIES - LONDON MAIN MARKET AND AIM
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Quindell made two appointments to its board as the insurance outsourcing company said its trading remains robust and it remains in talks for the sale of a still-unnamed operating division. Quindell said it has named Richard Rose as its non-executive chairman and has hired Jim Sutcliffe as its deputy Chairman and strategy director. Rose is currently chairman of both Booker Group and AO World, while Sutcliffe is the former chief executive of Old Mutual and the former head of Prudential's UK business. Sutcliffe currently works as the chairman of the Codes and Standards Committee of accounting watchdog the Financial Reporting Council.
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Rangers International Football Club rebuffed a second takeover bid from American financer Robert Sarver on Monday, citing the same reason behind its first rejection. Rangers said the bid from Sarver, which was increased to GBP20 million from an original GBP18 million offer, had been rejected as, following talks with shareholders, the board does not believe the bid will secure sufficient support. The revised bid from Sarver would have involved investing up to GBP20 million in Rangers by way of a share placing of 100 million shares at 20 pence per share, giving Sarver about a 55% stake. If the placing were to be completed, Sarver would have then bid for the rest of the company's shares.
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COMPANIES - INTERNATIONAL
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Billionaire Li Ka-shing has decided to restructure his flagship companies Cheung Kong Holdings Ltd and Hutchison Whampoa Ltd, sending their shares soaring in Hong Kong trading Monday. Cheung Kong Holdings jumped 14.4% to HKD142.80, while Hutchison Whampoa climbed 12.4% to HKD98.25. 86-year-old Ka-shing announced the USD24 billion reorganisation on late Friday, in order to unlock value. The deal is effectively a merger, in addition to a spin-off of their property units into a new listed company, Cheung Kong Property Holdings Ltd, which could be Hong Kong's biggest listed property company. The remaining assets - non-property and the recently acquired aircraft leasing business - will be part of the other new company, CK Hutchison Holdings Ltd.
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Foundation Medicine Inc and Roche announced they will enter into a broad strategic collaboration. Roche will invest USD250 million in Foundation Medicine at a per share issuance price of USD50 (5 million shares) to fund its operations and development. Additionally, Roche will tender for approximately 15.6 million Foundation Medicine shares with an aggregate tender value of approximately USD780 million. The tender offer at a per share price of USD50, which, when combined with Roche's direct investment in Foundation Medicine, will result in Roche owning a minimum of 52.4% and a maximum of 56.3% of Foundation Medicine on a fully diluted basis. Foundation Medicine will continue to operate independently.
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South Korean port city Incheon is in talks with Chinese e-commerce giant Alibaba Group Holding Ltd for an investment that would be in the range of KRW1 trillion won or about USD924 million, according to reports. It is expected that the Incheon municipal government and Alibaba will work together on the project that includes the construction of shopping malls, hotels, and a logistics center in Yeongjongdo, an economic zone near Incheon International Airport, South Korea's main gateway. Incheon, a port city located 40 kilometers west of Seoul, has suffered financial troubles amid high-cost projects such as hosting the Incheon Asian Games last year.
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German car maker Volkswagen said that in 2014 its group delivered over ten million vehicles in total to customers, achieving the first goal of its Strategy 2018 last year. In total, 10.14 million vehicles were handed over to customers worldwide from January to December 2014, up 4.2% from prior year's 9.73 million vehicles.
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Monday's Scheduled AGMs/EGMs

Epistem Holdings
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By Tom Waite; thomaslwaite@alliancenews.com; @thomaslwaite

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