Daily Business Live
RSA backs offer; inflation rises; SSE profits hit; Halfords surges
4.30pm: London higher on vaccine hopes
The FTSE 100 index closed higher on further positive vaccine news.
Britain’s blue-chip benchmark closed ahead by nearly 20 points at 6,385 as Pfizer and BioNTech confirmed their Covid-19 treatment is 95% effective, batter than first announced.
B&Q owner Kingfisher closed up 3.46%, ahead of its third-quarter update on Thursday.
RSA Insurance surged 4.17% after agreeing to be bought for £7.2bn by a consortium comprising Intact Corp of Canada and Denmark’s Tryg (see below).
Energy supplier SSE was also up, by 4.38%, as it reported a fall in adjusted profits but maintained its interim dividend payout.
On Wall Street, benchmarks were also heading north, with the Dow Jones up more than 78 points and the S&P 500 also ahead.
8am: London opens lower
The FTSE 100 was trading 32.43 points lower at 6,332.90 at the open.
7am: RSA acquisition confirmed
Former RBS CEO Stephen Hester, now heading RSA, is expected to scoop up to £15.8m after the board of the FTSE 100 insurance company, recommended a £7.2 billion cash offer from Regent Bidco, a wholly-owned subsidiary of Canadian group Intact Financial Corporation, and Danish firm Tryg.
Intact will retain RSA’s Canadian, UK and international operations, Tryg will retain RSA’s Swedish and Norwegian businesses, and Intact and Tryg will co-own RSA’s Danish business on a 50/50 economic basis.
The 685p per share offer is a premium of approximately 51% to the closing price of 460p per RSA Share on 4 November, the last business day before it was announced that a possible offer could be made for the company.
It is the biggest takeover deal announced for a listed UK company this year.
SSE takes profits hit hit
Renewable power generator and network operator SSE saw a £69.5 million hit to adjusted profit in the first half ending 30 September.
Adjusted profit before tax was down 26% to £193.9 from £263.4m, reported profit before tax was up 544% to £829.5m.
It declared an interim dividend of 24.4p per share.
It plans to treble its renewable output by 2030, and has set out its aspiration to add 1GW a year of new renewables capacity by the second half of the decade.
Cost of living rises
Inflation rose to 0.7% in October from 0.5% in September, pushed higher ise by the rise in the cost of clothing and food prices.
The Office for National Statistics (ONS) said second-hand cars and computer games also saw price rises, but these were partially offset by falls in the cost of energy and holidays.
Cycling and motor accessories specialist Halfords has posted a surge in interim profits, helped by demand for bikes during the pandemic.
Underlying profit before tax for the half year to 2 October rocketed by 116.2% to £56m on a 9.6% rise in revenue.
All product areas and businesses returned to growth towards the end of the first half.
Markets and bank speculation
The FTSE 100 is expected to fall for a second day even as hopes rise that Britain will strike a compromise Brexit trade deal with the EU.
Brussels sources said the UK negotiating team was close to offering a compromise whereby EU fishermen were allowed generous access to UK waters for a limited transition period.
The FTSE 100 was being called down 27 points at 6334 by traders on the IG Index platform.
Takeover deals in the banking sector are on the agenda after it emerged that talks have taken place between Spanish banks BBVA and TSB owner Sabadell. This has given rise to speculation that TSB could soon be back on the market.
The Co-operative Bank has received an approach from Cerberus and Sainsbury’s has had “very preliminary expressions of interest” for its bank, believed to include NatWest group.
US shares fell after three days of gains. Japan’s benchmark Nikkei average dropped 1.1%, its biggest daily loss since 30 October. On Tuesday the index, which has gained nearly 12% so far this month, posted its highest close since 1991.