LONDON BRIEFING: Vivo Energy accepts USD2.3 billion takeover offer

(Alliance News) - Vivo Energy on Thursday accepted a USD2.3 billion takeover offer from its largest shareholder.

Vivo, a pan-African retailer of Shell and Engen-branded fuels and lubricants, will recommend a USD1.85 per share offer from Vitol Investment Partnership.

In sterling terms, the offer is roughly a 25% premium to its closing price of 111.40 pence on Wednesday - which implies a market cap of about GBP1.4 billion. The offer includes planned dividends.

Vivo Energy shares were up 19% to 132.42p early Thursday.

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."

Vitol is an energy marketing and trading firm founded in Rotterdam in 1966.

Only a couple weeks back, Vivo had appointed a TotalEnergies executive as its new chief executive officer. Stanislas Mittelman, currently senior vice president for Africa Marketing & Services at the French oil major, had been expected to take up the role in March of next year. Vivo on Thursday said Vitol is supportive of Mittelman's appointment and it intends to keep Vivo management in place.

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

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MARKETS

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FTSE 100: up 0.1% at 7,294.08

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Hang Seng: up 0.2% at 24,744.96

Nikkei 225: closed up 0.7% at 29,499.28

S&P/ASX 200: closed up 0.1% at 7,407.30

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DJIA: closed down 9.42 points at 35,804.38

S&P 500: closed up 0.2% at 4,701.46

Nasdaq Composite: closed up 0.4% at 15,845.23

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EUR: up at USD1.1215 (USD1.1195)

GBP: up at USD1.3346 (USD1.3328)

USD: flat at JPY115.34 (JPY115.38)

Gold: up at USD1,794.10 per ounce (USD1,790.62)

Oil (Brent): down at USD82.26 a barrel (USD82.73)

(changes since previous London equities close)

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ECONOMICS AND GENERAL

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Thursday's key economic events still to come

US Thanksgiving Day. Financial markets closed.

1100 GMT Ireland labour force survey

1700 GMT UK Bank of England Governor Andrew Bailey at Cambridge Union event.

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Germany's economy expanded in the third quarter, but still remains below where it was before the coronavirus pandemic struck, data from the Federal Statistics Office of Germany showed. German gross domestic product grew 1.7% quarter-on-quarter in the three months to September 30, slightly behind FXStreet-cited forecasts of 1.8% growth. The second quarter GDP hike was upwardly revised to 2.0%. Annually, GDP growth was 2.5%, slowing from the second quarter's 10% hike. Compared with the fourth quarter of 2019, the quarter before the coronavirus crisis began, GDP was 1.1% lower.

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The US said it looks forward to working with Germany's incoming government after a centre-left coalition clinched a deal. Olaf Scholz from the Social Democrats, who is expected to become Germany's next chancellor, presented the coalition deal between his party and their Green and Free Democrat partners on Wednesday. "We look forward to working with Germany's new government on our goals of revitalizing the Transatlantic partnership, increasing cooperation with our NATO Allies, and raising the level of ambition of our relationship with the EU," a US State Department spokesman said Wednesday evening. "We have every expectation that the relationship between the United States and Germany will continue to be incredibly close and effective." The three parties' rank-and-file will need to give their blessing to the deal in the coming days to approve the incoming government.

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BROKER RATING CHANGES

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JEFFERIES RAISES INTERCONTINENTAL HOTELS TO 'BUY' (UNDERPERFORM) - TARGET 5,750 (3,750) P

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MORGAN STANLEY CUTS RENISHAW TO 'UNDERWEIGHT' ('EQUAL-WEIGHT') - TARGET 4,400 (5,800) P

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LIBERUM RAISES HOWDEN JOINERY GROUP TO 'BUY' ('HOLD')

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COMPANIES - FTSE 250

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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. "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. The miner added: "In line with the announcement, the company's operations in southern Ayacucho, Pallancata and Inmaculada will continue to operate under the existing legal framework." The stock had plunged on Monday, more than halving at one point, 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.

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Pub chain Mitchells & Butlers said Thursday 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. It 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."

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COMPANIES - GLOBAL

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National Australia Bank said its deal to purchase Citigroup's Australian consumer business received the backing of the local antitrust regulator. The Australian Competition & Consumer Commission has opted not to oppose the AUD1.2 billion, around USD864.0 million, transaction. The deal still needs approval from the Australian Prudential Regulation Authority. Melbourne-headquartered NAB expects the deal to conclude in the first half of 2022. Citigroup's institutional business in Australia is not included in the acquisition.

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Thursday's shareholder meetings

DX Group PLC - AGM

Hammerson PLC - GM re enhanced scrip dividend alternative

Hotel Chocolat Group PLC - AGM

JPMorgan Global Emerging Markets Income Trust PLC - AGM

Origin Enterprises PLC - AGM

Pan African Resources PLC - AGM

Quiz PLC - AGM

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By Tom Waite; thomaslwaite@alliancenews.com

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