Market News: FTSE 100 7,164.91 41.64 0.59% FTSE 250 23,022.40 275.41 1.21% FTSE AIM 1,265.12 -0.81 -0.06%
The FTSE 100 rose 0.59% on Monday, outperforming European peers on the back of a boost from supermarkets, Oanda Corp. analyst Sophie Griffiths says. U.K. grocers were among the top risers after speculation of a bidding war over Wm. Morrison Supermarkets PLC picked up pace. The supermarket has already apparently accepted a 3.6 billion pound ($4.98 billion) takeover offer from SoftBank Group Corp.'s Fortress Investment Group though interest from a third potential buyer has emerged, pushing its price well above the 254 pence a share bid made by the investment group.
"With the U.K. takeover panel giving additional time for rival groups CD&R and Apollo to respond, there could be plenty left to run on this story," IG Group analyst Josh Mahony says. Among Morrisons' peers, Tesco PLC rose 3.1%, Marks and Spencer Group PLC rose 2.9% and J Sainsbury PLC rose 2.3%.
Companies News:
Real Estate Investors Says 1H Rent Collection Was Strong
Real Estate Investors PLC said Monday that its rent collection for the first half of 2021 was strong, adding that it expects to see some recovery in its property valuations over 2021 and 2022, which will reduce its gearing.
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Lok 'N Store Performance Remains Strong
Lok 'n Store Group PLC said Monday that its performance has continued to be strong since it reported first-half results for fiscal 2021 in April, adding that it is opening three new stores due to open late in 2021 and early in 2022.
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Lithium Miner Bradda Head Seeks to Raise GBP6.2 Mln in London IPO
Bradda Head Holdings Ltd. said Monday that it intends to float in London and raise 6.2 million pounds ($8.6 million) to fund its lithium-exploration projects in the U.S.
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Wameja 2Q Average Transaction Value Improved
Wameja Ltd. said Monday that its average transaction value increased in the second quarter when compared with the previous quarter.
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ULS Technology Appoints Commercial and Technology Chiefs
ULS Technology PLC said Monday that it has appointed Simon McCulloch as chief commercial and growth officer, and Ed Mardell as chief technology officer.
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Saietta Group Plans to Raise GBP37.5 Mln at London IPO
Saietta Group PLC, a U.K. electric-motor engineering company, said on Monday that it expects to raise 37.5 million pounds ($51.9 million) at its initial public offering on London's AIM.
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Hipgnosis Songs FY 2021 Pretax Profit Rose, Raises Dividend Target
Hipgnosis Songs Fund Ltd. said Monday that pretax profit for fiscal 2021 rose and raised its dividend target.
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Apollo Considers Counterbid for U.K. Grocery Chain Morrisons -- Update
LONDON -- Apollo Global Management Inc. said Monday it is considering making a bid for U.K. grocery chain WM Morrison Supermarkets PLC, setting up a potential three-way bidding war with SoftBank Group Corp.'s Fortress Investment Group LLC and U.S. private-equity firm Clayton, Dubilier & Rice.
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NN Group to Acquire MetLife's Poland and Greek Businesses for EUR584 Mln
NN Group NV said Monday that it will acquire MetLife Inc.'s businesses in Poland and Greece for a total consideration of around 584 million euros ($692.9 million).
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Morrisons Bidding Fight Underscores Appetite for UK Grocers -- Analysis
A bidding war for grocery chain Wm. Morrison Supermarkets PLC shows investors are hungry for the U.K. supermarket sector and that appetite for the country as an investment destination is increasing.
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Franchise Brands Sees 2021 Performance at Least In Line With Expectations
Franchise Brands PLC said Monday that it expects to deliver full-year results at least in line with market expectations.
Market Talk:
Supply Shortages Weigh on UK New-Car Sales Recovery
1143 GMT - U.K. car sales continued to recover last month, but still fell short of pre-Covid levels due to consumer uncertainty and supply shortages. Private new car registrations totalled 88.7K in June, above June 2020's 72.8K reading, but lower than June 2019's 90.1K, Pantheon Macroeconomics says, citing figures from the Society of Motor Manufacturers & Traders. Pantheon says consumers are still making fewer big-ticket purchases than in 2019. "In addition, car-plant shutdowns caused by component shortages will limit the potential number of new registrations in the coming months," Pantheon economist Gabriella Dickens says. The SMMT said pandemic-driven semi-conductor shortages had hit production and has previously warned that the U.K.'s departure from the EU would increase costs and red tape, undermining productivity.
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NN Group's Greek and Polish Acquisitions Look a Good Move
1129 GMT - NN Group's acquisition of MetLife's Poland and Greece businesses is a good example of deploying excess capital in a value accretive way, Citi says. The acquisition will nearly double the insurance and asset-management company's total customer base in Poland and Greece, creating a platform for future growth, and importantly it won't affect the dividend policy or buyback program, the U.S. bank says. The EUR50 million operating capital generation a year from the new businesses will also help partially offset lost capital generation from a potential sale of its asset management arm, NN Investment Partners--helping maintain the dividend cover, Citi says. Citi retains its buy rating and target price of EUR46.10. Shares are up 1.4% at EUR40.79.
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Interest in GCP Student Living Underlines Value of Real Estate
1127 GMT - Investment trust GCP Student Living is the latest property company to receive interest from a bidder, in this case from its largest shareholder, the Blackstone-owned IQ, Peel Hunt says. Alongside asset-rich supermarket Morrisons accepting a private equity-led takeover offer, this shines a light on the valuation of real estate in public markets, the brokerage says. "We have talked about GCP's 'rented platform' and related party issues in the past, and shareholders must now make sure they are not left short-changed given the numerous interests involved," Peel Hunt says. The brokerage recommends investors instead buy shares in cheaper peer Empiric Student Property, which it rates buy with a target price of 95 pence. Shares in GCP rise 11% to 187.6 pence.
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Lok 'n Store Shares Look Undervalued
1105 GMT - Self-storage company Lok 'n Store should see upgrades to both profit and net asset value forecasts on the back of new stores opening, proving its increasing value, finnCap says. Lok 'n Store has seen unprecedented occupancy growth, rising to 81.6% from 67.1%, and price rises are now likely--something that should quickly drop through to profit, the investment group says. Net asset value upgrades are also likely as investors recognize the growing attraction of self storage compared to investing in declining parts of the retail and office sector, finnCap says. FinnCap reiterates its view that Lok 'n Store shares are substantially undervalued compared to both its prospects and its peers, and retains its 883.0 target price. Shares are up 1.5% at 660.0 pence.
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Tesco and Sainsbury Are Expected to Benefit From Potential Morrisons Takeover
1103 GMT - A potential takeover of Wm. Morrison Supermarkets--the U.K.'s fourth largest grocer by market share--would be positive for peers Tesco and J Sainsbury, UBS says. Tesco and Sainsbury hold the No. 1 and 2 positions in the U.K. market, respectively, according to Kantar data. Walmart recently sold a majority stake in the third largest U.K. chain, Asda, to Europe-focused buyout firm TDR Capital and U.K.-based entrepreneur brothers Mohsin and Zuber Issa. Should the Morrisons transaction be completed, with Asda and Morrisons in private-equity ownership, the competitive landscape is likely to be more constructive for Tesco and Sainsbury, especially if the former two are constrained to invest for the future, UBS says.
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Real Estate Investors PLC is Attractive as Market Normalizes, Liberum Says
1101 GMT - Real Estate Investors PLC looks well positioned to benefit from a positive long-term outlook for the Midlands region, despite short-term uncertainty caused by the coronavirus pandemic, Liberum says. The Midlands, U.K.-focused investment trust's market appears to be normalizing after a very uncertain 2020, and its 97% adjusted rent collected in the first half of 2021 is strong, in a direct reflection of its diverse portfolio and hands-on regional ownership, the brokerage says. "The shares trade at a 27% discount to spot net asset value, against the U.K. sector at an 11% premium and imply a 15% fall in underlying property values, which seems too steep," Liberum says, retaining its buy rating and target price of 47.0 pence. Shares are up 2.5% at 41.0 pence.
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Biffa's Plastics-Recycling Business Should Drive Continued Future Growth
1014 GMT - Plastic recycling, alongside continued earnings recovery and the future consolidation of the waste-collections market, should drive continued future growth at Biffa, Berenberg says. Biffa's green investment opportunities are key to its equity story, the brokerage says, after a visit to the company's plastic bottle recycling facility in County Durham, England. Biffa has doubled its plastics recycling capacity since 2019, and this comes at an opportune moment given the U.K. plastics tax that will be imposed in April, Berenberg says. The brokerage has a buy rating on Biffa with a 370 pence target price.
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(END) Dow Jones Newswires
07-05-21 1203ET
