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John Laing in £2bn takeover; Inflation jumps; retail ‘in a funk’

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5pm: FTSE dives

Shares fell as new data showed inflation doubling, raising the prospect of an interest rate rise. The FTSE 100 closed at 6,950.20, down 84.04 points (1.19%), though off its low for the day of 6,897.


3.30pm: Aviva closes fund

Aviva Investors is shutting its £366m UK Property fund a year after it suspended dealing, saying there is not enough liquidity to reopen it.

Full story here


3pm: Whisky IPO

The Artisanal Spirits Company, owner of the Scotch Malt Whisky Society, will seek admission to AIM in early June.

Full story here


12.05pm: Cabinet announcements

Kate Forbes takes on an expanded brief as cabinet secretary for finance and the economy in the new Scottish Cabinet.

She takes responsibility for the budget, fiscal policy and taxation.

Ms Forbes will also be the cabinet secretary in charge of economic strategy, the wellbeing economy, trade and inward investment, city and regional growth deals, enterprise and the digital economy.

Full story here


8.30am: Inflation hits equities

The FTSE 100 fell in early trade, dragged down by heavyweight commodity stocks, while a bigger-than-expected jump in inflation stoked fears that the central bank may tighten its monetary policy earlier than expected.

The blue chip index was down 61.6 points (0.88%) in line with forecast at 6,972.65.

Miners were trading 2.7% lower.


8.20am: Cabinet changes

Fiona Hyslop and Fergus Ewing, two of the Scottish Government’s longest serving ministers, are to leave government.

Latest here


8.15am: Inflation rises

Consumer price inflation more than doubled in April to a 13-month high of 1.5% from 0.7% in March and 0.4% in February.

The jump means consumer prices are now at their highest level since March 2020 at the outset of the pandemic.

… more follows


7am: John Laing deal

Infrastructure group John Laing has agreed to a £2bn takeover by US private equity firm KKR.

KKR will pay 403p a share for Laing, a 27% premium to Tuesday’s closing price of 360p. Laing’s board will recommend the deal to shareholders.

John Laing invests in transport, social and environmental public-private partnership programmes worldwide. It has also invested in the rollout of high-speed fibres in Germany with two small takeovers of regional telecoms businesses.

Shares in the company jumped as much as 18.5% to 376.4p two weeks ago as rumours of a deal swirled around the City.

In March, the company reported an annual pre-tax loss of £65m, compared with a loss of £95m a year earlier, while net asset value per share slipped to 310p from 337p.

Chairman Will Samuel said: “The John Laing Board believes that the offer from KKR represents an attractive and certain value in cash today for John Laing shareholders and reflects the high quality of the business, its people and future prospects, as well as providing a positive outcome for John Laing pensioners.”

… more follows


Retail sales ‘in a funk’

Scottish retail sales “remained in a funk” last month, falling by a sixth on the comparable pre-pandemic trading period, though shops were shut for the early part of the month.

Total sales fell by 15.6% last month compared with April 2019, when they had increased by 4.4%, according to the latest sales monitor from the Scottish Retail Consortium and KPMG.

The SRC has moved to a two-year comparison from a year-on-year one to provide a more meaningful picture of trading because of Covid lockdowns and restrictions last year.


7am: BAE Systems

Defence group BAE Systems said it is on track to meet its full-year guidance, with all divisions continuing to perform strongly.

Chief executive Charles Woodburn said: “Strategically, our geographically diverse portfolio is aligned to growing defence budget areas.

“We’re ramping up investment in self-funded R&D aligned to customer focus areas and we’re leveraging our leading capabilities in evolving markets to ensure we’re increasingly well placed to deliver for all our stakeholders.”

The company said sales are expected to grow by 5% to 7% when the impact of currency exchange is excluded, and underlying earnings to increase in excess of 10% excluding currency.


7am: Mitchells & Butlers

Pub company Mitchells & Butlers posted £200 million pre-tax losses for the six months to March, compared to £121m last time. Revenue plunged 79% to £219 million.

M&B said almost all of its sites were now open, trading indoors and outdoors.

The company, whose pubs include the Horseshoe in central Glasgow and the Sheep Heid at Duddingston, was a ‘high performing business’ coming into the pandemic, chief executive Phil Urban said.

“With the support of our main stakeholders, we are now well placed to emerge in a strong competitive position and look forward to the removal of remaining trading restrictions in June such that the business is able to return again to full and sustainable profitability.”


Markets

The FTSE 100 was expected to open about 68 points lower ahead of inflation figures which continue to haunt the markets.

Wall Street took a hit with the Dow Jones Industrial Average closing down 0.78%, the S&P 500 dropped 0.85% and the Nasdaq Composite fell 0.56%.

Traders in Asia picked up the baton with Japan’s Nikkei 225 falling 1.79%. The Hong Kong market was closed for a public holiday.



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