LONDON BRIEFING: Vodafone makes way for new Hungary national champion

(Alliance News) - Vodafone Group on Monday said it has entered into an agreement in principle with Hungarian technology firm 4iG Public and Hungarian state holding company Corvinus to sell its Vodafone Hungary arm for a total cash consideration equivalent to an enterprise value of EUR1.8 billion.

Both parties are targeting completion by the end of 2022.

Vodafone said the combination of the Hungarian business with 4iG is "complementary", with limited overlaps. The addition of Vodafone Hungary's infrastructure to 4iG will create a "stronger competitor to the incumbent operator", it said.

Chief Executive Officer Nick Read explained: "The Hungarian government has a clear strategy to build a Hungarian-owned national champion in the ICT sector. This combination with 4iG will allow Vodafone Hungary, which has a proud history of success and innovation in the country, to play a major role in the future growth and development of the sector as a much stronger scaled and fully converged operator.

"The combined entity will increase competition and have greater access to investment to further the digitalisation of Hungary."

Vodafone shares were marginally higher early Monday.

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

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MARKETS

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FTSE 100: down 0.2% at 7,538.79

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Hang Seng: down 0.3% at 28,794.50

Nikkei 225: closed down 0.5% at 28,794.50

S&P/ASX 200: closed down 1.0% at 7,046.90

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DJIA: closed down 292.30 points, or 0.9%, at 33,706.74

S&P 500: closed down 55.26 points, or 1.3%, at 4,228.48

Nasdaq Composite: closed down 260.13 points, or 2.0%, at 12,705.22

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EUR: soft at USD1.0028 (USD1.0035)

GBP: up at USD1.1820 (USD1.1790)

USD: soft at JPY137.05 (JPY137.15)

Gold: down at USD1,743.01 per ounce (USD1,748.05)

Oil (Brent): down at USD95.10 a barrel (USD96.45)

(changes since previous London equities close)

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ECONOMICS AND GENERAL

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Monday's key economic events still to come

1100 BST Ireland wholesale price index

0830 EDT US CFNAI Chicago Fed national activity index

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Japanese Prime Minister Fumio Kishida has been diagnosed with Covid-19 and cancelled his planned international travel while he isolates and recovers. The Japanese leader developed a slight fever and cough late on Saturday and a PCR test for the coronavirus was positive, said Noriyuki Shikata, the cabinet secretary for public affairs at the prime minister's office. "Prime Minister Kishida is isolated inside his residence," he told the Associated Press on Sunday. The 65-year-old prime minister was on summer vacation last week and was scheduled to return to work on Monday. It is not clear where or how he was infected.

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BROKER RATING CHANGES

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Jefferies raises NatWest price target to 424 (359) pence - 'buy'

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Liberum cuts Petra Diamonds to 'hold' (buy) - price target 100 pence

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Liberum cuts Gem Diamonds to 'hold' (buy) - price target 40 pence

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COMPANIES - FTSE 100

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Bill Ackman's London-listed investment fund Pershing Square Holdings reported a swing to a USD3.04 billion pretax loss in the first half of 2022 from a profit of USD718 million a year before, saying the six months were "a challenging time" due to the geopolitical environment and inflation. Net return in the half-year was negative 26.0%. However, performance has improved since, bringing the year-to-date net return to August 16 to negative 10.8%. "The investment manager and the board view the decline in the market value of PSH’s portfolio year to date as a temporary dislocation resulting from market dynamics," Chair Anne Farlow said.

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COMPANIES - SMALL CAP

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Cineworld said its Cineworld and Regal movie theatres across the globe are "open for business as usual" and continues to welcome customers and members, despite the group's financial difficulties. Last Wednesday, Cineworld said it was in "active discussions" with various stakeholders, exploring the possibilities to secure further liquidity or restructure its balance sheet through a "comprehensive deleveraging transaction". It also warned that lacklustre trading was prompting potential financing decisions that could significantly dilute shareholders. Then last Friday, the Wall Street Journal reported the company was preparing to declare bankruptcy, as it struggles to recover from pandemic lows. The report said Cineworld was expected to file a Chapter 11 petition in the US and is also considering filing for an insolvency proceeding in the UK. In response early Monday, Cineworld said strategic options through which it may achieve its restructuring objectives include a possible voluntary Chapter 11 filing in the US and associated ancillary proceedings in other jurisdictions as part of an orderly implementation process. "Any such filing would be expected to allow the group to access near-term liquidity and support the orderly implementation of a fully funded deleveraging transaction," it said on Monday, adding: "As previously announced, any deleveraging transaction would, however, result in very significant dilution of existing equity interests in Cineworld."

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COMPANIES - GLOBAL

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Credit Suisse announced further changes to its C-suite, appointing a new chief financial officer and chief operating officer. The Swiss lender appointed Dixit Joshi as CFO from October 1. Joshi will take over from David Mathers who previously announced plans to step down after 11 years in the role. Joshi was group treasurer at Deutsche Bank for the past five years. Credit Suisse also named Francesca McDonagh as its new COO, to start on September 19. McDonagh was previously announced as CEO of Europe, Middle East & Africa at the firm. Before joining Credit Suisse, McDonagh was CEO at the Bank of Ireland, having held senior management roles at HSBC Holdings prior to that. In late July alongside its half-year results, Credit Suisse appointed Ulrich Korner as its new CEO. Korner previously had served as head of the firm's asset management business.

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Sumitomo Mitsui Financial is mulling a takeover bid for Bank Pan Indonesia, to rival offers from competitors such as Mitsubishi UFJ Financial, Bloomberg reported. The Tokyo-based financial services company is considering the acquisition of a controlling stake in the Jakarta-based firm known as Panin Bank. This is according to "people familiar with the matter", Bloomberg said. Sumitomo Mitsui's competitor MUFG is currently thought to be the strongest contender, the sources said, but no final decision has been made. Panin Bank shares have almost doubled in value this year, with a market value of around USD2.5 billion.

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Monday's shareholder meetings

African Pioneer PLC - AGM

Argentex Group PLC - AGM

Nostrum Oil & Gas PLC - GM re operational update

Ondo InsurTech PLC - AGM

Sabien Technology Group PLC - GM re broker option

Scottish Investment Trust PLC - GM re combination with JPMorgan Global Growth & Income PLC

Trackwise Designs PLC - AGM

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By Tom Waite; thomaslwaite@alliancenews.com

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