Rabu, 03 Juli 2024

FTSE 100 Live: Blue chips to open higher in last day before election - Proactive Investors UK

  • FTSE 100 up 38 points at 8,159
  • Keywords Studios bought by private equity
  • Rentals at record high

9.49am: Keywords Studios agrees takeover bid

Shares in Keywords Studios lifted more than 2.5% today to 2,383p after the video game ancillaries specialist accepted a takeover offer worth 2,450p per share.

Private equity firm EQT will buy the company for £2.1 billion or £2.2 billion including debt.

EQT's consortium includes two state-backed investment groups, Canadian-owned CPP and Rosa, a subsidiary of Singapore’s investment fund Temasek.

The consortium said this latest offer was final and would not be raised unless a third party makes a rival bid.

Directors at the company have recommended shareholders vote in favour of the deal.

Katie Cousins at Shore Capital said: "We have been supportive of the offer, seeing a decent premium above recent share price levels which has suffered headwinds from the threat of AI and softer organic growth. 

"EQT has a long and successful track record of investing in services and global technology industries, and it believes that it can support KWS build on the Group’s existing dominance within a larger and growing video games industry, by unlocking growth at a greater pace by expanding into adjacent media and entertainment end-markets and fast-growing technologies."

9.25am: Topps Tiles tumbles on weak market backdrop

Topps Tiles shares have dropped more than 4% after it reported a further decline in sales in the third quarter, with market conditions remaining challenging. 

Sales were down 6.2% in the first 39-weeks of its financial year, worsening from the 5.8% revenue decrease reported in its interim results.

Topps said it is continuing to take market share as it calculates that the UK tile market is down 10-15% year-on-year.

"Market conditions have remained challenging overall, with subdued demand in the domestic repair, maintenance and improvement (RMI) sector, especially for bigger ticket projects," it said. 

9.04am: JD Sports tumbles ahead of AGM

JD Sports is leading the top FTSE 100 fallers today after it dropped close to 4%, with its shares down more than 10% in the week since Nike issued a sales warning. 

Today's share price drop comes ahead of its annual general meeting on Thursday and is at a time when several clothing retailers have warned of tough conditions. 

ShareAction, the campaign group fighting for responsible investment, is planning to attend JD's AGM to urge the company to increase hourly salaries for its lowest-paid employees in a bid to "protect living standards".

Yesterday, fellow retailer Shoe Zone warned annual profits would be lower than expected due to a multitude of headwinds, potentially offering negative read-across to the sports clothing group. 

Shoe Zone said it "experienced weaker than expected spring/summer sales from April to June, due to unseasonal weather conditions”.

In the US last week, Nike was forced to warn investors that upstart rivals were starting to take larger chunks out of its sales.

As newer brands such as Roger Federer’s On and France’s Hoka look to steal market share, Nike said it expects a mid-single-digit percentage drop in sales during the current financial year.

8.42am: Morning so far

London's main index has opened higher this morning as election talks grows in both Europe and the US. 

Tomorrow will see Brits head to polling stations to vote in what could be the Conservative's worst election since the turn of the century. 

Keir Starmer's Labour is predicted to win 484 of the 650 seats up for grabs, outperforming the 418 taken by former party leader Tony Blair in his landslide win back in 1997 and also the most in its history.

Meanwhile, in the US, investors are starting to bet on the likelihood of a Trump presidency after Biden's self-proclaimed loss at the first set of debates last week.

Odds for Biden to take office for a second term have dropped by 32% since the live debate, while bets on Trump have been on the rise, says political betting site PredicIt.

In company news, Keywords Studios PLC (AIM:KWS, OTC:KYYWF) has agreed to an all-cash bid from a consortium led by Scandinavian private equity group EQT.

The deal values the video game ancillaries specialist at £2.1 billion or £2.2 billion including debt.

The offer, worth 2,450p per share, was flagged last week and follows an original approach worth 2,250p in May.

8.19am: Vodafone and Virgin Media O2 to network share

Shares in Vodafone have opened flat this morning after it and Virgin Media O2 announced a new long-term network-sharing agreement which extends the current arrangement for more than a decade.

The plans aim to significantly enhance network coverage, quality, and competition across the UK.

It is subject to the approval of the merger between Vodafone UK and Three UK by the Competition and Markets Authority (CMA), which is anticipated to close by the end of 2024.

Post-merger, Vodafone and Three intend to invest £11 billion in network infrastructure over the next decade.

Ahmed Essam, chief executive of European markets at Vodafone, stated: "With this agreement and our planned merger with Three UK, we will transform the mobile experience for over 50 million customers in the UK for the next decade."

7.59am: Rentals in UK reach record highs

Private renting in the UK is at its most expensive, with the average tenancy for homes and flats at record highs, new research found. 

For rent outside of London, on average Brits are looking at paying £1,316 per calendar month, which is the highest ever recorded, according to research by property website Rightmove. 

Ahead of tomorrow's election, Rightmove is calling on whoever the next government is to help the industry by creating more rental properties.

In London, the price for renting on average lifted to £2,652 a month, marking nearly triple that of the £894 average seen in the north-east of England. 

In May, rents outside London had increased by 7%, pushing ahead of the 2% inflation rate, Rightmove added. Meanwhile, those in the capital jumped by 4% year-on-year, slowing from 2022's peak of 18%. 

Rightmove said it was urging the government  “to accelerate housebuilding and incentivise landlords to invest in more homes for tenants” in a bid to rectify the issues in the rental market. 

It believes some 120,000 new rental properties need to be added if rent growth was to return to "more normal levels" of around 2%. 

7.40am: Paramount and Skydance renew merger talks

Overnight in the US, shares in media conglomerate Paramount lifted close to 8% after merger talks with Skydance Media resumed after the latter issued an improved offer. 

Skydance, the independent studio created by David Ellison (son of Oracle's Larry Ellison), provided a rebuffed offer to attempt to secure the deal, months after Shari Redstone, who controls Paramount, ended the discussions abruptly, Financial Times reports revealed. 

A special committee at Paramount, comprised of members of its board, have been tasked with reviewing the new offer, weeks after they initially leaned in favour of accepting the first Skydance bid, which was voided following Redstone's involvement. 

In early June, it was revealed former Warner Music boss Edgar Bronfman Jr was working with private equity giant Bain Capital on a bid to buy Shari Redstone's National Amusements Inc, the owner of Paramount. 

Reports said that Bronfman and Bain were mulling a possible offer of between $2 billion and $2.5 billion to buy move theatre operator National Amusements.

7.18am: FTSE 100 to open higher

London blue chips are set to start the day higher, up around 50 points at 8,175, as the UK move a day closer to the general election.

In company news, Topps Tiles PLC will be reporting resuts.

It always seems to be running hard to stand still and will be hoping it has some better news about the third quarter after what it said was a difficult first half.

Interim sales were down almost 6% and the group posted a modest loss against a similar-size profit a year ago.

Over in Asia, shares were boosted by the Federal Reserve's comments that interest rate cuts are not far away.

The broadest index of Asia-Pacific shares barring those in Japan lifted 0.64% higher, helped by tech stocks, while Japan's Nikkei rose 1.4%, nearing the record high touched in March.

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2024-07-03 06:18:00Z
CBMijAFodHRwczovL3d3dy5wcm9hY3RpdmVpbnZlc3RvcnMuY28udWsvY29tcGFuaWVzL25ld3MvMTA1MTExMS9mdHNlLTEwMC1saXZlLWJsdWUtY2hpcHMtdG8tb3Blbi1oaWdoZXItaW4tbGFzdC1kYXktYmVmb3JlLWVsZWN0aW9uLTEwNTExMTEuaHRtbNIBAA

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