Market report

Ladbrokes £15bn bid talk helps drive market higher


5pm: Markets driven higher by M&A activity

M&A activity and optimism about travel returning to some form of normality helped underpin travel stocks, while crude oil and energy firms also rebounded.

Entain shares jumped 18% after the owner of Ladbrokes confirmed it has received more US takeover interest, this time a $20 billion (£15bn) offer from New York-listed fantasy sports and online betting firm Draftkings.

Harry Barnick, senior analyst at Third Bridge, said: “The offer almost doubles the bid made by MGM earlier this year, which was rejected by shareholders.

“Entain is an attractive asset based on its experience in online gambling, where it is European leader in sports betting and online casino.

“Draftkings audacious bid indicates it’s willingness to go head-to-head with Flutter-owned FanDuel.”

This helped drive Paddy Power owner Flutter Entertainment and 888 Holdings higher by 3.5% and 6.4%, respectively.

Royal Dutch Shell‘s ‘A’ stock rose 3.6% and is ‘B’ shares closed up 3.3%. The oil major said on Monday it is selling its assets in the shale-oil rich Permian Basin of the US to rival ConocoPhillips for $9.5 billion.

National Express ended the best performer, up 7.6%. The company confirmed it is in discussions with transport rival Stagecoach over a possible all-share combination.

B&Q owner Kingfisher closed down 5.1% the worst performer, as sales growth has slowed. However, it said it delivered a strong financial performance in the first half of its financial year and declared a share buyback.

The FTSE 100 index closed up 77.07 points, or 1.1%, at 6,980.98 while the FTSE 250 ended up 209.67 points, 0.9%.

11.15am: Babble acquires Dumfries firm

Contact Centre and cyber solutions provider, Babble, has acquiered Dumfries-based 8020. The deal provides scale to Babble while delivering a Scottish presence.

Founded in 2005, 8020 provides mobile, connectivity and IT services to more than 750 customers across Scotland and the North of England.

11am: Manufacturing orders up

UK manufacturing total order books in September improved to their highest since 1977, according to the latest monthly CBI Industrial Trends Survey.

The survey of 273 manufacturing firms also saw export order books improve to their strongest since March 2019. 

However, output growth in the three months for September slowed for the second month in a row, despite remaining firm by historical standards. Eleven out of 17 sectors saw output increase, with headline growth being driven largely by the food, drink & tobacco sub-sector. 

Stock adequacy picked up slightly, but nonetheless remained close to last month’s record low and considerably below average.

9.30am: Stocks rebound

Stocks in London bounced back in line with predictions (see below) as investors appeared to shrug off the latest rise in public borrowing, the Evergrande crisis in China and the energy and food shortage problems at home. The FTSE 100 was trading 73.22 points higher at 6,977.13.

Among the top risers was Royal Dutch Shell, which advanced 3.3% after the $9.5bn sale of its Permian Basin assets.

International Consolidated Airlines Group, owner of British Airways, was up 3.4% after travel restrictions to the US were eased.

B&Q owner Kingfisher saw some profit-taking following a fairly decent set of interim results (see below). The shares were down 3.8% in the opening exchanges.

7am: Kingfisher makes good start

B&Q store

B&Q and Screwfix owner Kingfisher said that it had a good start to the second half of the year and has upgraded its sales outlook.

The group iincreased its first half adjusted pre-tax profit by 61.6% to £669 million after it benefited from a boom in DIY during the coronavirus pandemic.

Sales in the the six months to 31 July climbed by 22.2% in constant currency to £7.1 billion after trade was driven by demand for home improvement products across the group’s retail and trade channels.

Like-for-like sales also saw a strong uplift, rising by 22.8% year-on-year and by 21.3% compared to two years ago.

On a statutory basis, pre-tax profit increased by 70.6% to £677 million.

The second half will see a drop in like-for-like sales of 3-7%, from 5-15%, which will be an increase of 9-13% compared to two years ago.

Full-year adjusted pre-tax profit will be £910-950m, up from £786m last year and £544m in 2019.

7am: Celtic loss

Celtic Football Club plunged to an £11.5 million pre-tax loss last year from a profit of £100,000 a year earlier.

Full story here

7am: National Express and Stagecoach

National Express has confirmed that it is negotiating a takeover of Scotland-based Stagecoach.

Under the terms of the proposed combination National Express shareholders would own 75% of the group.

Stagecoach shareholders would receive 0.36 new National Express ordinary shares for each Stagecoach ordinary share.

Full story here

7am: Craneware ‘excited’

Keith Neilson, CEO of health sector software company Craneware, said it was looking to the future with “considerable excitement” after posting an 8% rise in EBITDA on a 6% rise in revenue following the acquisition earlier this year of US firm Sentry Data Systems.

Full story here

Global markets

The FTSE 100 was expected to rebound after slumping to a two-month low amid worries over energy supplies and the unfolding concerns over the solvency of Chinese retail estate company Evergrande.

Sterling also slid to a three-week low over concerns the UK government might embark on a bailout of its energy sector as rising gas prices push some providers to the wall.

The FTSE 100 index fell almost 60 points, or 0.9%, to 6,903.91. Spread betters were predicting a 40 to 45-point rise at the open.

Wall Street’s main indices fell even more sharply, with the Dow Jones down 1.8%, the S&P 500 falling 1.7% and the tech giants dragging the Nasdaq down 2.2%.

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