Worrying economic data from China has sent equities into a tailspin in early trading in London. Click here for The Trader Nicole Elliott's latest take on the markets.
IC TIP UPDATES:
In the afternoon of 31st December, Gordon Dadds (GOR) announced the completion of its acquisition of Ince UK – the London-based international law firm. The assets coming under Gordon Dadds’ control generated £30.5m in fees in the year to April 2018. Gordon Dadds is paying around £27.3m in cash over four years, and a grant of options over up to 3m new shares. £12.5m of new borrowing facilities have also been arranged. The international offices of Ince are not being acquired, but have agreed to enter into network arrangements. The deal is expected to be earnings-enhancing in the current year before exceptional costs, and “significantly earnings enhancing” for Gordon Dadds from April 2019. Meanwhile, Gordon Dadds’ first-half revenues rose 56 per cent to £20.1m, while operating profits rose 23 per cent to £4.3m. The shares resumed trading this morning but were broadly unmoved. Buy.
Drax (DRX) has completed the purchase of Scottish Power’s flexible, low carbon and renewable energy portfolio from Iberdrola, at a price of £702m. The deal was announced in October, before being updated in December to include a risk-sharing mechanism to mitigate losses from the UK capacity market auction. Shares are broadly flat this morning, against a 1 per cent drop in the FTSE. Buy.
KEY STORIES:
Gambling software group Playtech (PTEC) will be forced to pay €28m (£25.2m) in back taxes to Israeli authorities following a civil tax audit covering the 10 fiscal years 2008 to 2017. The reason being that the Israeli tax authorities have made transfer pricing adjustments relating to certain functions performed by Playtech in Israel during that period. No penalties will be demanded as a result, and the back-dated figure covers all activities performed by the company in Israel. It will also be treated as an exceptional item in the group’s 2018 accounts and will be paid within the next 30 days.
Ophir Energy (OPHR) has confirmed it is talks regarding a possible all-cash offer from Medco Energi Global. Shares in the FTSE 250 producer are up a third in reaction to the news, though Ophir said no firm offer has yet been made. Medco has until 28 January to do so.
OTHER COMPANY NEWS:
Shares in another explorer-producer, the Eastern Mediterranean-focused Energean Oil & Gas (ENOG), are up 5 per cent this morning after the company signed a gas sales and purchase agreement with IPM Beer Tuvia. The deal, which is worth $0.9bn, will see Energean supply 5.5bn cubic meters of gas from its Karish and Tanin floating production storage and offloading vessel, over a period of 19 years.
An independent report into the valuation of Faroe Petroleum (FPM) has suggested the North Sea explorer-producer's net assets are worth between $879m and $1.08bn, or a 22 to 48 per cent premium to DNO's 152p-a-share offer price. The report didn't arrest a drop in the company's share price to below DNO's offer price, possibly due to a further fall in Brent crude to $53 a barrel, and a negative result from the Brasse East exploration well, which encountered an oil reservoir, but was found to have water contact.
