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Frasers in Debenhams talks; Ted Baker loss; B&Q repayment

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4.30pm: London looks for direction

The FTSE 100 failed to gain any traction with uncertainty surrounding the Brexit talks but was aided by the weak pound to finish 5 points higher at 6,555.

In the US, the Dow Jones slumped 11 points, 0.4% mid-session while the Nasdaq Composite hit another all-time high gaining 50 points or 0.4%. The S&P 500 ticked 4 points lower (0.1%).

3pm: Filmhouse shuts for month

Edinburgh Filmhouse has decided to stay shut throughout December to prevent staff from becoming ill over Christmas.

Full story here

9am: London dips on Boris rumour

Stocks dipped in early trade amid speculation that Prime Minister Boris Johnson was about to call an end to the Brexit talks.

The FTSE 100 was 0.2% lower at 6,538.67, while the pound was down 1.2% against the dollar at 1.3274 and 1% down against the euro at 1.0974.

7.44am: Connells bids for Countrywide

Connells has announced a cash offer for estate agency Countrywide at 325 pence per share valuing the company at £112.1 million, or an enterprise value (equity + debt) of £200.2m.

The offer is a premium of 124% to the closing price of 145pence per Countrywide share on 6 November, the last business day prior to the commencement of the offer period.

It is also a premium of 30% to 250pence per Countrywide share which Alchemy has suggested that it may offer.

The Countrywide board said it will evaluate the merits of Connells’ firm offer in consultation with the company’s major shareholders, together with all other available options for the company, including the revised proposal from Alchemy and a capital raise from existing shareholders of the company.

Ted Baker

Fashion chain Ted Baker posted a bigger half-yearly loss as coronavirus-led restrictions hit store sales, even as the company’s online business registered a strong performance.

The company said the underlying pretax loss widened to £39 million in the six months ended 8 August from £2.7m a year earlier.

Rachel Osborne, chief executive, said the business is “on track or ahead of our operational KPIs for the first year of our plan.”

In July, the company said it planned to cut at least 500 jobs – more than a quarter of its workforce – just six months after it announced 160 redundancies to reduce costs. 

It also plans to streamline its supplier base, simplify its structure and limit capital investment. 

Debenhams

7am: Debenhams in Ashley’s sights

Frasers today confirmed that it is in negotiations with the administrators of Debenhams’ UK business regarding a potential rescue transaction for Debenhams’ UK operations.

In a brief statement it said: “Whilst Frasers Group hopes that a rescue package can be put in place and jobs saved, time is short and the position is further complicated by the recent administration of the Arcadia Group, Debenhams’ biggest concession holder.

“There is no certainty that any transaction will take place, particularly if discussions cannot be concluded swiftly.

Interest in taking over the 242-year-old group and saving it from liquidation comes after JD Sports withdrew its interest following the collapse of Arcadia which has valuable concessions in Debenhams stores.

Frasers, which also owns Sports Direct, is working with advisers to Debenhams on a deal that could value the chain at more than £200m, depending on how much stock is left. Frasers would operate Debenhams’ 124 stores under 12-month licences.

Frasers Group will publish interim results on Thursday.

B&Q store

Kingfisher repays business rates

B&Q and Screwfix owner Kingfisher will return in full the £130m it received in UK and Republic of Ireland business rates relief received as a result of the COVID-19 crisis.

Earlier this year the company repaid in full the amount received of £23 million under the UK Government’s Job Retention Scheme.

The company anticipates that FY 20/21 adjusted profit before tax will include c.£85 million of non-recurring cost savings (previous guidance: c.£175 million), net of any one-off COVID-related costs.

6.30am: Productivity progress

Progress on productivity in Scotland is expected next year in education and digital, according to a new report from CBI Scotland and KPMG due to be published tomorrow (the embargo on this report has been broken by a Scottish website).

6am: Markets

The FTSE 100 looks set to make a modest start with vaccine hopes outweighing the deteriorating Brexit negotiations.

Asian shares retreated from a record peak on Monday after a Reuters report that the US was preparing to impose sanctions on some Chinese officials highlighted geopolitical tensions, while oil prices fell on surging virus cases.

Japan’s Nikkei declined 0.46% while shares in Australia were up 0.6%.

Shares have rocketed in recent weeks on the back of vaccine hopes and expectations of fresh US stimulus. On Wall Street, stock indexes reached fresh all-time highs on Friday with the Dow rising 0.8%, the S&P 500 gaining 0.9% and the Nasdaq adding 0.7%.

Today’s agenda

Brexit talks: There will be another call between Johnson and von der Leyen scheduled for this evening. In terms of the market reaction, sterling has moved slightly lower this morning, down -0.16% against the US dollar.

The UK government’s controversial Internal Market Bill will arrive back in the House of Commons. This is the bill which sought to break parts of the Withdrawal Agreement with the EU, with the EU reacting very negatively to its publication. After it passed the House of Commons, the House of Lords amended the bill to take out the controversial sections, but the government has said it will reinstate them in the Commons today. 

Brexit talks latest



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