FTSE Live: Hopes for recovery from Evergrande shock in China as National Express and Stagecoach unveil merger

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‘FTSE 100 index rebounded from Monday’s turmoil, with another sharp rise for airline giant IAG and a strong session for Royal Dutch Shell helping offset fears of contagion sparked by the plight of heavily indebted Chinese real estate company Evergrande .

There is also more M&A activity after National Express and Stagecoach confirmed discussions of a possible merger, while interim results from B&Q owner Kingfisher have included plans for a 300 buyout. million pounds sterling and a higher dividend.

Live updates

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British Steel shutdown warning as gas price chaos boils

British Steel today issued a stern warning about electricity prices “getting out of hand” as the gas crisis swept through the UK economy.

The country’s second-largest steel producer has said the colossal increases – multiplied by 50 from £ 50 per megawatt hour to £ 2,500 per MWh since April – make the power-hungry production process impossible at times.

“With winter approaching, when demand increases, prices could worsen considerably,” the company said.

British Steel, owned by Chinese conglomerate Jingye, said it was keeping production at “normal levels” for now, but soaring costs could not be “absorbed or ignored”.

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Pitt vs. Clooney coffee wars spur Soho M&C Saatchi advertising legends

M&C Saatchi has launched a coffee war advertising campaign pitting Brad Pitt against his friend and rival George Clooney.

Pitt is the new face of Italian brand De’Longhi, facing Clooney and Nespresso.

It was just one of several clients during the semester that helped the Soho company bounce back from two difficult years that included an accounting scandal and a management overhaul.

Revenue jumped 15% to £ 171million, profits rose from £ 2million to £ 10.5million.

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The acquisition of Stagecoach makes sense for both companies

The surge in Stagecoach and National Express stock prices today shows that the City sees the value of this transaction on both sides.

The two companies operate large fleets which could benefit from a shared service. Both need to invest significant sums to prepare for the future of Net Zero. A combined balance sheet offers more borrowing power and higher purchasing power.

In many ways, what’s surprising is that this deal didn’t happen sooner. Stagecoach first attempted to buy National Express in 2009. Activist investor Elliott argued for a merger with National Express three years later. Since then, it’s a shy dance.

The only thing that could blow the tires off this deal is the competition watchdog. A deal with such an impact on UK transport infrastructure will undoubtedly be under scrutiny.

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Stagecoach shares soar in buyback negotiations

Stagecoach shares jumped more than 20% after confirming it was in merger talks with rival National Express.

The two companies have said in separate statements that they are in talks over a possible combination of shares that would see National Express subsume Stagecoach. The talks were first reported by Bloomberg.

National Express is offering Stagecoach shareholders 0.36 National Express shares for each Stagecoach share they own, which would give Stagecoach investors 25% of the combined business. The offer represents a premium of around 18% based on Monday’s closing price.

Shares of both companies surged early in the session, valuing Stagecoach’s offer at around £ 480million.

Boards of directors of both companies said the deal would be “strategically compelling”, promising cost savings, growth and value for both groups of shareholders.

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Pernod Ricard reveals deal for The Whiskey Exchange

Spirits maker Pernod Ricard has agreed to buy The Whiskey Exchange, which has three stores in the heart of central London.

In addition to branches in Covent Garden, Great Portland Street and London Bridge, the Whiskey Exchange also has an online business that offers some 4,000 brands of whiskey, 700 of rum and 600 brands of gin.

In addition, the firm is known for online auctions of rare spirits.

Read the full story here.

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Higher miners in FTSE 100 recovery

Buyers returned to the London market after Monday’s massive sell-off by China, with British Airways owner IAG leading the charge after US officials yesterday gave the green light to the resumption of lucrative transatlantic trade.

IAG shares rose another 7% or 11p to 177.18p at the top of the FTSE 100 riser chart, after also surging 11% at last night’s close, relieved that US borders will soon be open to travelers vaccinated from Europe.

Shares are only back to their early August level again, with IAG changing hands to 215p no later than April.

The FTSE 100 index is up more than 1%, or 74.74 points to 6,978.65 in a quieter session for investors after fear sparked Monday by fears that Chinese real estate developer Evergrande may struggle to pay off its gigantic debt.

The company, which has liabilities of just over $ 300 billion, faces debt repayment deadlines this week. His plight sparked wider fears about the health of China’s real estate market, which accounts for around 10% of GDP, and pushed down mining and Asia-focused companies sharply on Monday.

Today’s rebuilding work in the mining sector saw BHP and Antofagasta rebound by 3%, although analysts at Liberum said risks still point to the downside after iron ore prices decline by more than half in just over eight weeks. The broker has sell recommendations on both Rio Tinto and his heavyweight colleague BHP.

Royal Dutch Shell recorded one of the biggest gains in the elite after last night’s agreement to sell all of its Permian assets to ConocoPhilips for $ 9.5 billion. The proceeds will be used to fund additional distributions to shareholders and to strengthen the balance sheet, helping Shell B shares rally at 4% or 58p at 1,488.6p.

In the FTSE All-Share, Stagecoach shares jumped 20%, up 13.6p to 81.65p, after the bus operator unveiled a potential buyout of all shares by the coach company National Express, which also rose 14.6p to 237.6p in the FTSE 250 index.

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Luxury clothing retailer Matchesfashion appoints new CEO

London-based luxury retailer Matchesfashion has appointed the former boss of French department store group Printemps to lead the business.

Matchesfashion, which sells products from brands such as Alexander McQueen and Jimmy Choo at its three London stores as well as online, said Paolo de Cesare would become managing director later this year.

The new boss previously spent 12 years as Chairman and CEO of the Printemps Group.

For the full story, click here.

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Record salary for BHP shareholders

London-listed BHP shareholders will find a big dividend on their accounts as part of a record $ 10.1bn (£ 8.6bn) paid today by the miner from 2020 / 21.

The $ 2 per share, equivalent to £ 1.44 per share for UK investors, was declared just over a month ago after BHP took advantage of soaring commodity prices to report profits under – $ 37.4 billion (£ 31.2 billion) per year.

Fortunes have changed dramatically since then, with BHP shares falling more than 20%, slowing demand from steelmakers and other parts of the Chinese economy causing iron ore prices to drop from their May peak. at less than £ 100 per tonne.

Dividend could be one of BHP’s last UK shareholders after the Anglo-Australian company last month revealed its intention to remove the London and Sydney dual listing that had existed since the BHP / Billiton merger in 2001.

The primary listing will be on the Australian Stock Exchange alongside a standard London listing, which will cost the company its place in the FTSE 100 index and mean many index trackers and pension funds no longer track the stock.

Including the semi-annual dividend, BHP has returned US $ 15 billion (£ 12.8 billion) to shareholders over the past year and £ 38 billion (£ 32.4 billion) over the past year. last three years.

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Shell and IAG lead takeover of FTSE 100

The FTSE 100 index is up 46.02 points to 6,949.93 in a quieter session for investors after fear sparked Monday over fears that Chinese real estate developer Evergrande will struggle to repay its gigantic debt.

The company, which has liabilities of just over $ 300 billion, faces multiple debt repayment deadlines this week. Evergrande’s plight sparked wider concerns about the health of China’s real estate market, which accounts for around 10% of GDP, and pushed down mining and Asia-focused companies sharply on Monday.

London-listed stocks were much firmer today, with Anglo American pulling out of its recent slump to sit 28p higher at 2,498.5p. There was also an additional gain for British Airways owner IAG, having jumped 11% on plans to ease travel restrictions in the United States.

Stocks added another 4% or 6.2p to 172.4p. Royal Dutch Shell shares also rose 3% after the supermajor sold Permian Basin assets to ConocoPhillips for $ 9.5 billion.

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DIY Boom Boosts Kingfisher Sales and Profits

Screwfix and B&Q owner Kingfisher will launch a £ 300million share buyback after the pandemic DIY boom helped sales to surpass pre-Covid levels.

Retail company FTSE 100 saw its pre-tax profit rise 70.6% to £ 677million in the six months to July. Returning money to shareholders reflects “a strong cash generation and confidence in the outlook,” Kingfisher said.

Kingfisher is managed by Thierry Garnier

/ Kingfisher

It was boosted as people in lockdown made the most of their time at home and took on DIY projects. Kingfisher CEO Thierry Garnier said: “Our industry is benefiting from new trends which we believe will be beneficial in the long term. “

For the full story, click here.

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