Equities in London were relatively flat followed a retracement yesterday. Click here for The Trader Nicole Elliott's latest thoughts on the markets.
IC TIP UPDATES:
Ecuador-focused exploration group SolGold (SOLG) has upped the pressure on Cornerstone Capital Resources (CA:CGP), a week on from its all-share bid for the owner of a 15 per cent stake in the Cascabel project. SolGold said its directors were “surprised and disappointed” at Cornerstone’s swift rejection of the offer, and questioned how Cornerstone could have properly engaged with its shareholders before doing so. We continue to rate SolGold a buy.
Mining outfit South32 (S32) has appointed a former BHP executive as its new chair. Karen Wood, who served in BHP’s executive team in the 15 years prior to the spin-off of South32, will succeed current chair David Crawford, who steps down from the role in April. Our buy call is under review.
KEY STORIES:
Visa has increased its offer for Earthport (EPO), taking this to 37p a share. This offer has been recommended by Earthport’s directors. It represents a 12 per cent premium to Mastercard’s rival offer price, announced on 25 January and a 23 per cent premium to its own original offer price, announced on 27 December 2018. It also represents a 397 per cent premium to the closing price of 7.45p of each Earthport share on 24 December, the last business day before the start of the offer period. Mastercard is now considering its options, and said that it urges Earhtport shareholders to take no action in response to Visa’s announcement. Shares in Earthport soared by more than a tenth this morning.
SSE (SSE) has warned the suspension of the UK’s capacity market will result in a 6p reduction in adjusted EPS for the year to March 2019. The capacity market, which offers payment to encourage the development of new forms of electricity generation, was suspended in November by the European Court of Justice after discovering the European Commission had failed to examine the market in enough depth before approving it under state aid rules. The suspension is not expected to last, but the earnings impact has read across for both Centrica (CNA) - which is down 2 per cent this morning - and Drax (DRX)
OTHER COMPANY NEWS:
Law firm DWF has confirmed its intention to float on London’s main market, with admission expected in March 2019, following a potential intention to float announcement on 31 January and the news that the FCA had approved its registration document on 1 February. The final offer price for the IPO will be released after a marketing and book-building process. DWF expects to have a free float of at least 25 per cent after completion of the offer. It plans to raise primary gross proceeds of around £75m. Members of DWF who are selling shareholders are expected to hold a majority of the shares post-admission; these members will be subject to lock-up arrangements expiring in 2024.
