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WINNERS & LOSERS SUMMARY: LSE Up After Merger Bid From Hong Kong Rival

Wed, 11th Sep 2019 10:27

(Alliance News) - The following stocks are the leading risers and fallers within the main London indices on Wednesday.


London Stock Exchange, up 5.5% at 7,180.00 pence. The operator of the Hong Kong Stock Exchange has made a GBP30 billion offer to buy the London stock exchange operator. Hong Kong Exchanges & Clearing said it will pay 2,045 pence in cash and 2.495 new HKEX shares for each LSEG share, valuing LSEG at GBP29.6 billion. It gives an enterprise value, which includes debt, of GBP31.6 billion. This price, HKEX said, is a 23% premium to LSEG's 6,804.00p closing price in London on Tuesday. HKEX said LSEG's current management would continue to run the business, and HKEX has begun talking with all relevant regulators. HKEX would carry out a secondary listing on the London Stock Exchange as part of the deal. LSE shares hit an intraday high of 7,922p in the wake of the announcement.


Royal Dutch Shell 'A' and Shell 'B', down 0.3%. HSBC downgraded the oil major to Hold from Buy.


Galliford Try, up 1.3%. The construction and housebuilding company's shares were up despite saying earnings in the most recently ended financial year were hurt by contract write-downs and restructuring. As a result, pretax profit declined 27% to GBP104.7 million from GBP143.7 million year-on-year. Exceptional costs rose to GBP50.8 million from GBP45.0 million due to charges against legacy contracts and restructuring within the Construction business. Galliford Try said its Construction unit performed "well" during the year but there were challenges with some ongoing projects. Elsewhere, Linden Homes delivered steady sales and strong margins in tougher conditions, the company noted, while Partnerships & Regeneration delivered "impressive" growth and increased profitability. The company reduced its annual payout to 58.0 pence a share from 77.0p paid the year before. On Tuesday, housebuilder Bovis Homes said it was in talks to buy Galliford Try's housebuilding business for more than GBP1 billion. Bovis was up 2.8%.


Capital & Regional, up 11%. Johannesburg-listed real estate investment trust Growthpoint Properties confirmed it is in talks with Capital & Regional to acquire a majority stake through a partial offer. The offer would be a combination of cash for Capital & Regional shares, and an injection of capital through a subscription for new shares in the company. Growthpoint has until 1700 BST on October 9 to make a firm offer for the Capital & Regional stake, with both companies stressing that there was no guarantee that any offer will be made. In addition, Capital & Regional reported a pretax loss of GBP55.4 million for the six months to the end of June, compared to a profit of GBP6.7 million the year before. This was on net rental income that dipped by 3.7% to GBP25.2 million from GBP26.0 million, and revenue that declined 0.6% to GBP45.2 million from GBP45.5 million.


Consort Medical, down 3.5%. The medical device manufacturer said full-year profit could be hurt by up to GBP9.0 million, following an incident at a company facility in Northumberland. In July, Consort reported a small area of the operating plant at the Cramlington manufacturing facility was damaged by the "rapid" thermal degradation of chemicals, leading to an "expulsion of material" and contamination. The impact on operating profit for its year ending April 2020 is forecast to be between GBP7.0 million and GBP9.0 million, though this does not factor in any amounts it could recover from its insurance policies. In July, when the accident happened, Consort Medical guided for a GBP3 million to GBP5 million hit on profit. Decontamination took longer than planned but the company said it is "progressing the investigation" to find the root cause of the incident. Excluding the costs of the incident, Consort said underlying performance was in line with full-year expectations.

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