Carillion Plc Share News (CLLN)

LONDON (Alliance News) - London stock prices lost ground on Monday, with shares in SABMiller ending in the red despite Anheuser-Busch InBev making an improved offer to buy its brewing rival.

The offer, valuing SABMiller at about GBP70.43 billion, comes after last week's bid was rejected for "substantially undervaluing" SABMiller. Should a deal be reached, AB InBev said its combination with SABMiller would "build the first truly global beer company", the largest in the world.

The new proposal values SABMiller at GBP43.50 per share, and there is a partial share alternative available for about 41% of shares, equal to the combined shareholding of SABMiller's two largest shareholders, Altria Group and BevCo. Based on 1.62 billion shares, the cash offer values SABMiller at GBP70.43 billion. AB InBev said the cash proposal represents a premium of over 48% to SABMiller's pre-bid closing share price of GBP29.34 on September 14.

Despite the sweetened offer, shares in SABMiller ended down 0.8% at 3,638.17 pence. Meanwhile, Euronext-listed AB Inbev ended up 0.1%.

The FTSE 100 index ended down 0.7% at 6,371.18 points. The mid-cap FTSE 250 finished down 0.6% at 16,986.95, and the AIM All-Share closed down 0.2% at 734.73. In Europe, the CAC 40 index in Paris and the DAX 30 in Frankfurt ended down 0.3% and up 0.2%, respectively.

Asian stocks ended higher earlier Monday, with the Hang Seng index in Hong Kong up 1.2% and the Shanghai Composite up 3.3%. The Tokyo Stock Exchange was closed for Health-Sports Day.

Wall Street was slightly higher at the London close. The Dow Jones Industrial Average up 0.2%, the S&P 500 flat and the Nasdaq Composite also up 0.2%. The US celebrated Columbus Day on Monday. Whilst US equities markets were open, the government bond market was closed, and no economic data was released.

Speaking in Orlando in one of the few significant events for the markets in the US, Atlanta Federal Reserve President Dennis Lockhart said that there could be sufficient economic data for the US Fed to consider a "lift-off" at the Federal Open Market Committee meeting scheduled for October 27-28, Reuters reported.

"I think October is a live meeting. Clearly there is the potential that the data coming in, in advance of the October meeting, will be sufficient…We have a lot more in December," he said, according to Reuters, referring to the meeting scheduled for December 15-16.

The pound was 0.2% higher against the dollar from the London equities close on Friday at USD1.5343. The euro traded 0.1% higher against the dollar since the European equity close on Friday at USD1.1362.

Oil prices came off their intraday highs Monday. Brent oil had reached a peak Monday of USD53.28 a barrel at one stage in the day, but at the London equities close it was quoted at USD51.77 a barrel. Meanwhile, gold price ended rose to USD1,161.16 an ounce, after hitting an intraday low of USD1,154.78 an ounce.

Oil-related stocks ended lower, with BP down 1.7%, BG Group down 0.9% and Royal Dutch Shell 'B' down 1.0%. Mid-cap Tullow Oil closed down 2.5%, while Premier Oil dropped 3.3%.

Elsewhere on the London Stock Exchange, shares in FTSE 100-listed Glencore ended down 3.4%. The commodities trader and miner said it has begun a process to sell its wholly-owned Cobar copper mine in Australia and Lomas Bayas copper mine in Chile. The company said the sale process is in response to receiving a number of "unsolicited expressions of interest for these mines from various potential buyers".

The sale comes only a matter of days after the miner said it would cut-back on its zinc production by 500,000 tonnes per year from its operations in Australia, South America and Kazakhstan, in order to preserve the value of its reserves in the ground "at a time of low zinc and lead prices".

The process may or may not result in a sale, Glencore noted, and it said it will issue an update only in the event that a sale is agreed or a disclosure "is otherwise required".

After the market close, Secretary of State for Business, Innovation and Skills Sajid Javid said the UK government will sell its remaining 14% stake in Royal Mail, by way of an accelerated bookbuilding process which has opened with immediate effect. Royal Mail shares closed up 0.6% at 472.20 pence, well above its 2013 float price of 330p. The announcement follows plans revealed last week by the government for a retail of offer of shares in Lloyds Banking Group.

Aerospace and engineering company Rolls-Royce ended down 3.9%, after European regulators launched a probe into aircraft maintenance contracts, according to a report in the Financial Times, to investigate whether airlines are being forced to enter into anti-competitive contracts.

Rolls-Royce, which provides the only engine for Airbus' new wide-body aircraft the A350 XWB, has been approached by the commission. "We can confirm we have received a questionnaire from the European Commission and are working on our response," said Rolls-Royce.

Peers in the FTSE 350 Aerospace and Defence Sector Index also ended in the red, with Cobham down 3.5% and Meggitt down 2.9%.

Emerging markets-focused bank Standard Chartered closed down 3.1% after being downgraded by Investec to Hold from Buy. Analysts are still expecting too much of Standard Chartered, the broker said, putting forward the case that forecasts for revenue and earnings remain far too high.

Whilst Investec still regards the stock as slightly cheap, it said it sees much clearer value elsewhere.

In the FTSE 250, Carillion shares ended among the best mid-cap performers, up 5.1%. The construction and support services company reiterated confidence in achieving its targets for 2015 and ending the year with strong revenue visibility for 2016, as it said it has secured business worth around GBP1.7 billion since the end of its first half on June 30.

In the corporate calendar Tuesday, Bellway releases full-year results, Michael Page International issues a third-quarter interim management statement, and Lidco Group publishes half-year results. Meanwhile, Nanoco Group and Proactis Holdings release full-year results.

In the economic calendar, import and exportsdata from China are due at 0300 BST, while Japan's consumer confidence index is set for 0600 BST. The German consumer price index is due at 0700 BST, while the ZEW surveys for Germany and the EU are due at 1000 BST. The UK, consumer, retail and producer price indices from the UK are expected at 0930 BST, while at the same time the Bank of England releases its credit conditions survey.

In the US, the Redbook index is due at 1355 BST.

By Daniel Ruiz; danielruiz@alliancenews.com

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