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IC TIP UPDATES:
Barclays (BARC) chief executive Jes Staley has been fined by the Financial Conduct Authority and the Prudential Regulatory Authority over his 2016 attempt to identify a whistleblower. The unspecified fine was levied on Mr Staley for failing to act with due skill, care and diligence in a confidential draft warning notice, but said he did not lack the fitness and propriety to continue in his role. Buy.
Moya Greene will retire from her position as chief executive of Royal Mail (RMG) In September after more than eight years in the role. Rico Back will take her place and is set to join the board in June. He been a senior Royal Mail executive and ran the company’s European subsidiary General Logistics Systems (GLS) for 18 years. Shares were flat in early trading. Sell.
Shares in Reckitt Benckiser (RB.) fell 5 per cent in early trading after the health and hygiene company reported a 1 per cent like-for-like increase in sales in its health division during the first quarter. This was mainly due to an tough period for its Scholl business. But the group is on track to achieve its net revenue target of between 13 to 14 per cent total revenue growth at constant rates by FY2018, which implies a LFL growth in the range of 2 to 3 per cent. Buy.
News of another discovery from SDX Energy (SDX) this morning, this time at an exploration well at the Lalla Mimouna permit in Morocco, has pushed shares in the Aim-listed group by 4 per cent. The LNB-1 well, in which SDX has a 75 per cent stake, was drilled to 1,861 metres and encountered 300 metres of gas-bearing horizons in a “significantly over-pressured section”, while a second target encountered average porosity similar to the Guebbas targets, from which SDX currently produces. Buy.
Shares in Shire (SHP) are down slightly this morning following the news Allergan does not intend to bid for the pharmaceuticals giant. The group had considered an offer, but decided against it, prompting the share price to drop. Shire has already spurned a £42.4bn takeover offer from Japanese rival Takeda which has now made three offers. The company’s third offer represented a potential total value of £46.50 per share, after which Shire’s shareholders would own approximately 51 per cent of Takeda’s enlarged business. Buy.
KEY STORIES:
Before trading closed yesterday, and as expected, Weir Group (WEIR) successfully raised £363m in a placing of shares equivalent to 7.4 per cent of the engineer’s issued capital, and at a 2.8 per cent discount to the trading price. The funds, including a £47m contribution from major shareholder Blackrock, will be used to buy mining tools maker Esco, in a deal valued at $1.3bn.
This morning, Ion confirmed that it has approached Fidessa (FDSA) with a proposal to acquire the software company for £38.703 per share in cash. Fidessa’s shareholders would also be entitled to a final and special dividend for the year to December 2017, totalling 79.7p. Ion said there can be no certainty that an offer will be made and a further statement will follow. The Takeover Panel gave Ion, and rival bidder SS&C, until 5pm today to announce firm intentions to make offers for Fidessa, or to announce that they don’t intend to do so. Meanwhile, Temenos’s offer – which Fidessa had originally agreed to on 21 February – is still on the table, including the 79.7p dividend and £35.67 in cash. Shareholders are due to vote on this offer on 27 April.
Hikma Pharmaceuticals (HIK) has launched Dexrazoxane for injection, a generic equivalent to Zinecard 1. Both are used to treat cardiomyopathy as a side effect of chemotherapy. Dexrazoxane is specifically intended for use with metastatic breast cancer. Shares are up 3 per cent this morning.
OTHER COMPANY NEWS:
Minnow retailer Bonmarché (BON) has released an in-line trading update this morning. The group - which specialises in ‘over-50s’ fashion - credited online sales for the bulk of growth seen over the year ended 31 March 2018, while store sales continued to decline. Management says this is in line with wider industry trends, but it means the group will still report an overall sales decline of 1.5 per cent when results hit the market in mid-June. However, tight cost control and fewer discounts helped margins hold up better than expected, so pre-tax profits are expected to increase year-on-year.
