(Alliance News) - The following is a summary of top news stories Monday.
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COMPANIES
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Nestle confirmed it is in talks to buy all or part of Bountiful Co from KKR & Co, following press reports. An acquisition could pre-empt a proposed initial public offering of Bountiful, Bloomberg reported on Friday, citing a person familiar with the matter. KKR had been planning to value Bountiful at more than USD6 billion, according to a Bloomberg report in January which cited a person with knowledge of the matter. Bountiful, the owner of the Nature's Bounty vitamins and other health brands, sells products through retailers such as Walmart and CVS, Bloomberg said. Demand for vitamin supplements and other health products has been increased by the pandemic.
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Exxon Mobil's strategy in the face of climate change poses an "existential business risk" to the company, according to an activist hedge fund that is a shareholder in the oil giant, a report in the Financial Times said. The company, which has been criticised over the last year for both its financial performance and its approach to renewable energy investment, "has no credible plan to protect value in an energy transition," hedge fund Engine No 1 said in an 80-page investor presentation. ExxonMobil has said its business would focus on carbon capture and storage technology as a means to counter the emissions that cause global warming. However, it also plans to continue pumping oil and expects to spend USD20 billion to USD25 billion per year between 2022 and 2025 to fuel its growth, mainly through new oil and gas exploration projects.
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Educational publisher Pearson reported a good start to 2021 despite Covid-19 disruption. Total sales rose 5% on an underlying basis in the first quarter of the year, with Global Online Learning surging 25% - with strong growth in Virtual Schools - and North American Courseware sales growing 1%. Global Assessment sales and International sales both fell by 2%. "We are building pace and momentum. We are making good strategic progress in our ongoing shift to digital, we are in the advanced stages of preparation for the forthcoming launch of our new college app and our organisational redesign is on track," said Chief Executive Andy Bird. The company expects its full-year performance to be in line with previous guidance.
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Publishing, business information, and exhibitions company Informa said it will combine its FBX business with Novantas, to create a "leading competitive intelligence and specialist data business serving the retail banking markets". FBX is part of the Financial Intelligence portfolio within Informa Intelligence and provides quantitative and qualitative competitive intelligence solutions for US retail banks, with a particular focus on the mortgage market. The agreement is structured as an acquisition of New York-based Novantas on a cash and debt free basis by Informa and mid-market private equity firm, Inflexion, with Informa contributing its FBX business as consideration. FBX assets have a fair value of USD243 million. Informa will own 57% of the combined business. The transaction involves no cash payment from Informa, nor any deferred or contingent consideration, it said.
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UK sweetener and food ingredients company Tate & Lyle confirmed it is exploring the sale of a controlling stake in its Primary Products business to a "new long-term financial partner". "Tate & Lyle continues to successfully execute its strategy and remains confident in the future growth prospects of the company. However, the board believes that if a transaction of this nature was completed it would enable Tate & Lyle and the new business to focus their respective strategies and capital allocation priorities and create the opportunity for enhanced shareholder value," the company said. The Sunday Telegraph had reported that Tate & Lyle has started a GBP1.2 billion auction for the Primary Products division. Tate & Lyle said talks are at an early stage, and stressed that there can be no certainty a transaction will be concluded.
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MARKETS
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Stock markets were narrowly mixed on Monday, awaiting direction from a US Fed policy decision on Wednesday and major company reporting throughout the week. The dollar was lower across the board.
Among earnings due out in the US this week, electric car maker Tesla is scheduled for Monday after the New York close. This is followed by software firm Microsoft and Google-owner Alphabet on Tuesday, iPhone-maker Apple and social media platform Facebook on Wednesday, and e-commerce firm Amazon.com on Thursday. Ending the week are results from oil majors Exxon Mobil and Chevron on Friday.
In the UK are scheduled FTSE 100-index heavyweights such as BP and HSBC on Tuesday; GlaxoSmithKline, J Sainsbury, Reckitt Benckiser and Lloyds Banking on Wednesday; Royal Dutch Shell, NatWest and Unilever on Thursday; and Barclays and AstraZeneca on Friday.
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CAC 40: up 0.1% at 6,263.03
DAX 30: down 0.1% at 15,269.08
FTSE 100: marginally lower, down 2.99 points at 6,935.57
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Hang Seng: closed down 0.4% at 28,952.83
Nikkei 225: closed up 0.4% at 29,126.23
S&P/ASX 200: closed down 0.2% at 7,045.60
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DJIA: called up 9.00 points
S&P 500: called down 0.1%
Nasdaq Composite: called down 0.3%
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EUR: up at USD1.2102 (USD1.2062)
GBP: up at USD1.3904 (USD1.3847)
USD: down at JPY107.71 (JPY108.34)
GOLD: up at USD1,779.61 per ounce (USD1,776.95)
OIL (Brent): down at USD65.22 a barrel (USD66.09)
(currency and commodities changes since previous London equities close)
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ECONOMICS AND GENERAL
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The US and Britain rushed ventilators and vaccine materials to India Monday as the country battles a catastrophic, record-breaking coronavirus wave that has overwhelmed hospitals and set crematoriums working at full capacity. A surge in recent days has seen patients' families taking to social media to beg for oxygen supplies and locations of available hospital beds, and has forced the capital New Delhi to extend a week-long lockdown. The country of 1.3 billion has become the latest hotspot of a pandemic that has killed more than three million people, even as richer countries take steps towards normality with quickening inoculation programmes. France, Germany and Canada also have pledged support to India, which has driven increases in global case numbers in recent days, recording 352,991 new infections and 2,812 deaths on Monday – its highest tolls since the start of the pandemic.
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Japan's annual "Golden Week" holiday got under way with new restrictions in Tokyo and Osaka, where shopping malls and department stores were asked to close and residents urged to avoid non-essential travel. Bars and restaurants selling alcohol have also been asked to shut early during the week – usually Japan's busiest travel period – which comes just under three months before the pandemic-postponed Olympics are due to start.
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US tourists vaccinated against Covid-19 will be able to visit the EU in the coming months, European Commission chief Ursula von der Leyen said in an interview on Sunday with The New York Times. Signalling a major change in EU policy as vaccinations step up worldwide, von der Leyen gave no timetable, but the Times said that the new rules could be in place by this summer.
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People aged 50 and under are being urged to get their Covid-19 vaccine so the UK can "continue on the path back to normality". The push for people to take up jab offers comes as restrictions ease in Wales and Scotland, and as Britain sends more than 600 pieces of urgently-needed medical equipment to India following a devastating surge in coronavirus cases. A UK government campaign – called "every vaccination gives us hope" – sees the launch of a TV advert which will showcase the health workers and volunteers involved in the vaccination rollout across the UK. The Department of Health & Social Care said the campaign will predominantly be aimed at people under the age of 50 who will be offered their first dose, as well as the over 50s who are booked in for their second dose, to encourage vaccine uptake.
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Ireland has hit the one million coronavirus vaccines milestone. Irish premier Micheal Martin congratulated all those involved in the rollout of the programme in a tweet on Sunday evening. "Just been informed by that we've reached 1 million first doses of the #CovidVaccine. Great work by all the vaccination teams and GPs across the country," he posted. Earlier the taoiseach, who is 60 years old, said he is looking forward to registering for an AstraZeneca vaccination when permitted according to his age this week.
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Candidates backed by opposition parties won all three parliamentary elections, the results showed on Monday, dealing with a severe blow to Prime Minister Yoshihide Suga. The outcomes of Sunday's races, the first since Suga was inaugurated in September, bode ill for his ruling Liberal Democratic Party as the country prepares for a general election that must be held by this autumn. The victories of the three candidates all supported by the main opposition Constitutional Democratic Party come amid Suga's much-criticized response to the Covid-19 pandemic and scandals in the LDP, which led to two of the three races.
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Japanese services producer prices increased on a monthly and annual basis in March, data from the Bank of Japan showed. Producer prices rose 0.7% month-on-month in March, after February's 0.2% rise. Annually, prices also grew 0.7% following February's flat reading and January's 0.4% annual fall.
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German business confidence nudged up again, Munich-based Ifo said on Monday, though optimism for the months ahead softened due to the country's third coronavirus wave. The Ifo business climate index rose to 96.8 points in April from 96.6 in March - though this undershot expectations, according to FXStreet, for 97.8. Nonetheless, this marked the third straight month of growth - and to the highest level since June 2019.
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By Tom Waite; thomaslwaite@alliancenews.com
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