Fox lifts Sky bid as markets rebound on trade fears

Rupert Murdoch’s 21st Century Fox has lifted its bid for Sky in its battle for the UK broadcaster with US rival Comcast.

Fox’s latest offer of £14 per share values Sky at £24.5 billion, a 12% premium to Comcast’s rival £22bn offer, the New York-based media company said in a statement today.

The UK government, which has already said it is minded to approve Fox’s bid for Sky after Fox satisfied concerns over media plurality, is due to deliver its final ruling on Thursday.

Asian markets recovered overnight following sharp falls in global markets in the previous session.

Hong Kong’s Hang Seng rose 0.2% while the Shanghai Composite Index and Japan’s Nikkei both gained 1.1%

Analysts said the earlier falls were a reaction to the worsening outlook on trade relations as China’s commerce ministry branded the US proposal to impose tariffs on a further $200bn of goods as “totally unacceptable” and said it would be forced to take “countermeasures”.

But there had been some overnight consolidation on hopes of an easing in tensions as negotiations took hold. London and Wall Street are expected to hope slightly higher.

The FTSE 100  fell 1.3% (100.08pts) to close at 7,591.96 pts, snapping a four-day winning streak to decline in line with other European markets, with the biggest losses in commodities sectors.

BP and Royal Dutch Shell were the biggest fallers, down 3.3% and 2.3%, as oil prices fell.

Sterling stabilised as analysts took the view that Prime Minister Theresa May was likely to hold on to power and limit the economic damage of leaving the European Union.

Barratt Developments revealed robust trading ahead of year end results. Profit before tax expected to be around £835m (2017: £765.1m), driven by a strong end to the financial year and early progress on margin initiatives.

Ed Monk, associate director at Fidelity Personal Investing’s share dealing service, said: “The environment for housebuilders has been getting tougher, reflected in stagnating house prices, but Barratt’s update today is bullish and includes better-than-expected London sales. The dividend policy remains in place with the payout well covered which will reassure investors. 

“Barratt Developments has been on the radar of many investors, on both income and valuation grounds. The shares have struggled this year, pushing dividend yield to above 5% and price-to-earning to below 8 times before today’s update.”

Pubs chain J D Wetherspoon indicated it was preparing for a post-Brexit future. Mr Monk said:  “The UK’s preparations for life after Brexit are in question right now but Tim Martin [CEO} isn’t hanging around.

“Tim clearly hopes for a buccaneering, free-trading future outside the EU and J D Wetherspoon’s  is already swapping EU made drinks with alternatives from the UK and places like Australia and the trading statement today suggests there’s more to come.

“The bullishness on Brexit can’t mask a tougher period ahead for the pub chain, though. Business rates, the sugar tax and wages were all identified by the company as contributors to rising costs in the next year. A bounce in World Cup beer sales should soften the blow.”

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