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(Alliance News) - Stocks in London are called to open higher, as investors eye some key FTSE 250 takeovers.
In early corporate news, Hipgnosis Songs said it would back a possible Blackstone counter bid. Meanwhile, Tyman backed a GBP788 million takeover offer from Quanex.
Overnight, the People's Bank of China left the one-year loan prime rate - which serves as the benchmark for corporate loans - unchanged at 3.45%. The five-year LPR - which is used to price mortgages - was left at 3.95%. It had been cut from 4.20% in February, in an effort to stimulate the country's flagging housing market.
Market consensus had been expecting no change in April, given that the PBoC had left one-year medium-term lending facility rate unchanged at 2.50% last week.
Here is what you need to know at the London market open:
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MARKETS
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FTSE 100: called up 1.1% at 7,979.20
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Hang Seng: up 1.7% at 16,500.91
Nikkei 225: closed up 1.0% at 37,438.61
S&P/ASX 200: closed up 1.1% at 7,649.20
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DJIA: closed up 211.02 points, 0.6%, at 37,986.40
S&P 500: closed down 0.9% at 4,967.23
Nasdaq Composite: closed down 2.1% at 15,282.01
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EUR: flat at USD1.0663 (USD1.0664)
GBP: down at USD1.2382 (USD1.2410)
USD: up at JPY154.71 (JPY154.52)
GOLD: down at USD2,364.66 per ounce (USD2,391.85)
OIL (Brent): down at USD86.38 a barrel (USD87.01)
(changes since previous London equities close)
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ECONOMICS
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Monday's key economic events still to come:
08:30 EDT Canada PPI
16:00 CEST eurozone consumer confidence
11:00 IST Ireland wholesale price index
08:30 EDT US Chicago Fed national activity index
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Buoyant sales of large homes helped drive house prices to their highest level in 12 months, figures on Monday showed. The Rightmove house price index revealed the average asking price of property coming to the market in April rose by 1.1% or GBP4,207 month-on-month, to GBP372,324. This left prices just GBP570 short of the record in May 2023 while the annual rate of price growth is now 1.7%, the highest level for 12 months. Rightmove said a key factor behind this growth is the largest and most expensive homes, which are seeing their strongest start to the year for price growth since 2014. However, the market remains price-sensitive and is operating at different speeds, with prices and activity rising more slowly in the more mortgage-dependent first-time buyer and second-stepper sectors.
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BROKER RATING CHANGES
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Jefferies raises B&M to 'hold' (underperform) - price target 525 (380) pence
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COMPANIES - FTSE 100
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Tesco begins share buyback, to purchase up to GBP1 billion in shares by April 2025. The first tranche of this buyback programme is for up to GBP450 million in shares. The Welwyn Garden City, Hertfordshire-based supermarket chain announced the buyback earlier in April. At the time, it said pretax profit surged to GBP2.29 billion in the financial year ended February 24, from GBP882 million a year prior. Revenue climbed 4.4% to GBP68.19 billion from GBP65.32 billion. The company announced a final dividend of 8.25 pence per share, bringing the total to 12.10p, up 11% from 10.90p paid for financial 2023.
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Ocado has faced investor pressure to consider a listing in New York, the Telegraph reported on Saturday. The newspaper reported that the grocer and warehouse technology firm has had face-to-face talks with investors, a New York listing was a prospect that was discussed. The Telegraph noted that "one leading fund manager" said they would like to see Ocado explore a "trans-Atlantic shift".
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COMPANIES - FTSE 250
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Hipgnosis Songs Fund said it would be "minded" to accept an official cash bid from Blackstone, should one be forthcoming. Hipgnosis Songs Fund, a music investment company, which has bought up the royalty rights to song catalogues of artists including the Red Hot Chili Peppers, Journey and Neil Young, had accepted a USD1.40 billion bid from Alchemy Copyrights on Thursday. Alchemy trades as Concord Chorus Ltd. The Blackstone bid values each Hipgnosis Songs Fund share at USD1.24 each, the company overall at USD1.50 billion. "The board, having reviewed the proposal with its financial adviser, Singer Capital Markets, has indicated to Blackstone that the proposal is at a value that it would be minded to recommend to its shareholders should Blackstone announce a firm intention to make an offer pursuant," Hipgnosis Songs Fund said. "There can be no certainty that a firm offer will be made for the company by Blackstone, nor as to the terms of any such offer. Accordingly, shareholders are advised to take no action at this time with regard to the approach by Blackstone."
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Tyman and Quanex said they have reached agreement which will see Quanex takeover Tyman. Tyman shareholders will be entitled to receive 240.0p in cash and 0.05715 of a new Quanex share. The Quanex takeover offer for Tyman values each Tyman share at 400.0p, a premium to the closing price of 296.0p at close on Friday. Tyman said the transaction values the company at GBP788 million. "This transformative and complementary transaction will strengthen the enlarged business for the benefit of all our customers, employees and other stakeholders. In the context of a rapidly evolving North American marketplace, our board ultimately determined that this transaction is the best path to maximising value for Tyman shareholders, who will be able to realise a meaningful portion of their holding in cash at a significant premium to the prevailing share price while also participating in the future upside of the enlarged group," said Tyman Non-Executive Chair Nicky Hartery.
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Mobico reported that revenue in 2023 jumped 12% to GBP3.15 billion from GBP2.81 billion a year earlier. Pretax loss narrowed to GBP21.4 million from GBP173.5 million. Mobico lowered its dividend to 1.7p from 5.0p. Looking ahead to 2024, Mobico said it expects its adjusted operating profit to be between GBP185 million and GBP205 million, up from GBP168.6 million in 2023. Separately, Mobico said James Stamp will stand down as chief financial officer at its annual general meeting on June 11. Helen Cowing will join Mobico on May 8, taking up from role of interim CFO. She has previously held group CFO roles at Selecta Group, Ideal Standard International BV and Octopus Group.
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OTHER COMPANIES
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eEnergy said it has signed a GBP5.2 million contract with Spire Healthcare Group to provide a photovoltaic system across 38 sites. Revenues under the contract is expected to be recognised in financial 2024. Harvey Sinclair, eEnergy chief executive, commented: "This contract win is one of our largest to date. The award underscores our dedication to deliver innovative energy efficiency solutions for our clients, showcasing our multi-project and multi-site abilities."
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By Sophie Rose, Alliance News senior reporter
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