Shares in London continued their downward spiral in morning trading. Click here for The Trader Nicole Elliott's latest thoughts on the markets.
IC TIP UPDATES:
Unilever (ULVR) has scrapped its plans to do away with its dual-headed legal structure in favour of a Rotterdam headquarters after a “significant group of shareholders” opposed the plan. UK institutional investors including M&G Investments, Legal & General Investment Management, Schroders, Aviva Investors, and Columbia Threadneedle all publicly voiced their disapproval of Unilever’s move to the Netherlands. The consumer goods giant would have fallen out of the FTSE 100 index, which would have forced index funds and some active managers to sell. Shares in Unilever fell less than 1 per cent in early trading. Buy.
easyJet (EZJ) announced that Adèle Anderson will step down from her position as non-executive director following the annual general meeting in February, as well as from her position as audit committee chair. Julie Southern, who joined the EasyJet board as a non-executive director in August, will become chair of the audit committee from January. Shares were flat in early trading. Buy.
KEY STORIES:
Shares in Intu (INTU) jumped 30 per cent after a consortium of funds managed by Brookfield Property revealed that it is in the preliminary stages of considering a possible cash offer for the retail property landlord. The consortium already owns 29.9 per cent of Intu’s share capital. Previously, Intu agreed to a subsequently withdrawn offer from Hammerson (HMSO) worth 253.9p a share. Given that this represented a 34 per cent discount to its adjusted net asset value and applying this to Intu’s now lower NAV of 362p would give an offer price of 239p. The consortium has until 1 November to make a firm offer, and much depends on how much value the consortium attaches to Intu’s assets. Most analysts are forecasting a significant downgrading to asset values, so shareholders might want to stay put until the terms of any possible offer are revealed. Alternatively, the current share price could be materially ahead of any possible offer, which would make it sensible to exit now.
