LONDON BRIEFING: Centamin Gets GBP1.5 Billion Takeover Approach

(Alliance News) - Egyptian gold miner Centamin on Tuesday became the object of a GBP1.47 billion takeover approach by Toronto-listed Endeavour Mining Corp.

The all-share offer is on the basis of 0.0846 Endeavour share for each Centamin share, which Endeavour said represents a 13% premium to the FTSE 250 listing's closing price on Monday of 112.20 pence. At that closing price, Centamin had a market capitalisation of GBP1.30 billion.

Endeavour shareholders would own 52.9% of the combined company and Centamin holders 47.1%.

Endeavour said it approached the Centamin board back in October 2018 and again this year on November 11, but "meaningful engagement has still not been forthcoming", prompting the public announcement.

"Endeavour believes that this potential combination would strongly benefit both sets of shareholders due to the compelling long-term value creation opportunity," it said.

Here is what you need to know at the London market open:

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MARKETS

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FTSE 100: called flat at 7,282.40

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Hang Seng: down 0.3% at 26,377.91

Nikkei 225: closed down 0.6% at 23,379.81

DJIA: closed down 268.37 points, 1.0%, at 27,783.04

S&P 500: closed down 0.9% at 3,113.87

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GBP: firm at USD1.2955 (USD1.2933)

EUR: soft at USD1.1075 (USD1.1086)

Gold: flat at USD1,462.30 per ounce (USD1,463.74)

Oil (Brent): soft at USD61.12 a barrel (USD61.44)

(changes since previous London equities close)

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ECONOMICS AND GENERAL

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Tuesday's Key Economic Events still to come

0930 GMT UK construction purchasing managers' index

1100 GMT Ireland monthly unemployment

1100 CET EU producer price index

0855 EST US Johnson Redbook retail sales index

0945 EST US ISM-NY report on business

1600 EST US domestic auto industry sales

1630 EST US API weekly statistical bulletin

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UK Prime Minister Boris Johnson is to issue an appeal for Nato unity amid increasing strains within the Western alliance over the conflict in Syria. Johnson will break off from the election campaign to host a gathering of Nato leaders in Britain marking the alliance's 70th anniversary. Their talks take place amid a bitter row between French President Emmanuel Macron and Turkish President Recep Tayyip Erdogan over Turkey's recent incursion into northern Syria. Macron infuriated Ankara when he suggested Nato was suffering from "brain death" over the lack co-ordination over Turkey's "crazy" attack on the Kurds, seen as a key Western ally in the fight against so-called Islamic State. Johnson is expected to try to play peacemaker when he hosts the two leaders, together with German Chancellor Angela Merkel, for talks in Downing Street on Tuesday ahead of the main gathering. US President Donald Trump also is among the Nato leaders attending the two-day event.

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The US threatened to impose tariffs of up to 100% on USD2.4 billion in French goods in retaliation for a digital services tax it says is discriminatory. French sparkling wine, yogurt and Roquefort cheese are on the list of goods that could be targeted as soon as mid-January after a report from the US Trade Representative's office found the tax penalizes American tech companies such as Alphabet's Google, Apple, Facebook and Amazon.com. The decision "sends a clear signal that the US will take action against digital tax regimes that discriminate or otherwise impose undue burdens on US companies," US Trade Representative Robert Lighthizer said in a statement. Lighthizer also warned that Washington was considering widening the investigation to look into similar taxes in Austria, Italy, and Turkey.

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The US is considering slapping additional tariffs on European products as part of the long running feud between Washington and Brussels over subsidies to airplane manufacturers. "The US is initiating a process to assess increasing the tariff rates and subjecting additional European Union products to the tariffs," the US Trade Representative's office said. The USTR announcement came after the World Trade Organization found that the EU had not taken "appropriate steps to remove the adverse effects" of its aid to Airbus.

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BROKER RATING CHANGES

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RBC RAISES DIAGEO TO 'OUTPERFORM' (SECTOR PERFORM) - PRICE TARGET 3500 (3100) PENCE

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GOLDMAN RAISES RIGHTMOVE TO 'NEUTRAL' ('SELL') - TARGET 653 (522) PENCE

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JPMORGAN RAISES SERCO TO 'OVERWEIGHT' ('NEUTRAL') - TARGET 170 (145) PENCE

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COMPANIES - FTSE 100

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Plumbing and heating products supplier Ferguson said revenue was up 5.3% to USD5.21 billion in the financial first quarter ended October 31 from USD4.95 in the first quarter last year. Trading profit, which excludes exceptional items and amortisation of acquired intangible assets, came in at USD451 million, up 9.2% from USD413 million the year before. In the US, revenue was up 6.2% to USD4.89 billion from USD4.61 billion in the first quarter last year. Ferguson said its demerger of Wolseley UK is on track and expects to complete the process in 2020. "We expect to make further good progress in the year ahead. While US market growth is currently broadly flat. we remain confident of outperforming our end markets and our order books support continued modest revenue growth in the months ahead. This strong focus on growth with continued cost and margin discipline gives us confidence in our expectations for the full year, which remain unchanged," Chief Executive Officer Kevin Murphy said.

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AstraZeneca said it has sold the commercial rights to schizophrenia treatments Seroquel and Seroquel XR in the US and Canada to Germany's Cheplapharm Arzneimittel. Cheplapharm will pay Astra USD35 million upfront, plus contingent payments of up to USD6 million. It previously had purchased rights to the two Astra drugs in most European markets and Russia.

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COMPANIES - FTSE 250

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Cineworld Group said trading for the full year is expected to be slightly below management's expectations amid a weaker box office performance. For the period January 1 to December 1, Cineworld said revenue was down 9.7%, with the box office performance - the money it makes from ticket admissions - down 13%. "As anticipated, the box office performance for the reported period was slower than the comparative period in 2018 reflecting the phasing of major releases and postponement of some highly anticipated movies to 2020," the company said. Cineworld said the integration plans for US cinema operator Regal Entertainment have progressed well, and it announced an increase in synergies to USD190 million from USD150 million. "The impact of the major releases in December is expected to continue the recent positive box office trend. However given the weaker full year box office, partially offset by strong execution of synergies and revenue initiatives, management expects trading for the full year to be slightly below management's expectations," the company said.

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COMPANIES - OTHER MAIN MARKET AND AIM

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Ryanair Holdings reported a 6% rise in November traffic to 11 million passengers from 10.4 million at group level, with a load factor of 96%. On a rolling annual basis, group traffic grew 9% to 151.6 million passengers from 139.1 million.

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COMPANIES - INTERNATIONAL

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The Italian government approved a new loan of EUR400 million to keep stricken national airline Alitalia in business. Alitalia has been under government-controlled administration since May 2017, and state loans it has since received worth EUR900 million were close to running out. The new loan, valid for six months, should allow Alitalia administrators to continue efforts to restructure and find buyers for the airline, the government said in a statement.

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Virgin Atlantic Airways founder Richard Branson said he has decided against selling a majority of his stake in the British airline to Air France-KLM. The deal would have seen Branson, who holds 51% stake, sell just under a third of the airline to the French carrier, leaving him with a 20% share. The agreement was negotiated in May 2017 and was part of an effort by Virgin Atlantic to boost its European clout, to compete with International Consolidated Airlines Group-owned British Airways. Branson said that he initially thought he would have to sell a majority of his holding in the airline as part of the creation of a joint-venture with Air France-KLM, but in the end this secured regulatory approvals with a sale.

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Moody's Investors Service has assigned a Ba2 corporate family rating to Twitter's proposed notes offering, the ratings agency said. The social networking company's debt rating was given a stable outlook. Moody's Senior Vice President Neil Begley said: "Twitter's Ba2 rating reflects its growing niche position within social networking, benefiting advertisers through its reach and targeting capabilities, which has led to strong revenue growth and free cash flow generation. However, Twitter is small relative to its larger digital advertising and social networking competitors, and user engagement on social networks can be fickle."

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Canadian gold mining company Semafo said it does not plan to reopen its mine in Burkina Faso this year after an attack killed some three dozen of its employees. The November 6 ambush of a convoy transporting workers to the company's Boungou mine, which the government blamed on "terrorists," also left 60 people wounded, and was the deadliest attack in nearly five years of jihadist violence in the West African country.

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Tuesday's Shareholder Meetings

Sophos Group (re acquisition by Surf Buyer)

Henderson Far East Income

Falanx Group

Greatland Gold

Oleeo

Town Centre Securities

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By Tom Waite; thomaslwaite@alliancenews.com

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