EasyJet rejects offer, unveils rights issue | Lloyd’s back in profit
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5pm: Market falls sharply
The FTSE 100 closed the day down 71.32 points (1.01%) at 7,024.21.
7.45am: EasyJet rejects offer, unveils rights issue
EasyJet said today it had rejected a takeover offer (believed to be from Wizz Air) and would raise £1.2 billion in a rights issue to fund its pandemic recovery and expand operations.
The indicative proposal took the form of a low premium and highly conditional all-share transaction which, in the board’s view, fundamentally undervalued the company.
The potential bidder had since stated that it was no longer interested in a deal.
EasyJet said it would use the rights issue to strengthen its balance sheet and also to take advantage of growth opportunities that arise from the expected recovery in Europe’s aviation market over the coming years.
7am: Lloyd’s swings to profit
Insurance syndicate Lloyd’s of London swung to a first-half pre-tax profit of £1.4 billion, driven by a substantially improved underwriting result of £1bn.
It recorded a loss of £400 million for the same period a year ago.
Insurers suffered in 2020 due to hefty COVID-19 claims such as event cancellation and trade credit cover. But after writing exclusions into contracts for the pandemic and raising premiums, they have performed strongly this year.
John Neal, Lloyd’s CEO, said: “In an uncertain world Lloyd’s remains acutely focused on supporting our customers when they need us, and in the first half of 2021 we have paid out nearly £10bn in claims to help the recovery of businesses and economies globally.”
7am: STV buys studio, returns to profit
STV said it has added an eighth label to its studios business with the acquisition of a 25% stake in unscripted production company, Hello Mary.
Brighton-based Hello Mary was founded by Steve Regan in 2019. In just two years from inception, the company has won and delivered a range of titles for a variety of broadcasters across entertainment, documentary and popular factual.
STV swung back into the black at the half way stage, posting a pre-tax profit of £8.5m for the six months to the end of June against a £4.9m loss last time.
7am: 888 Holdings wins Willam Hill race
Gambling company 888 Holdings said it wa buying the non-US international business of William Hill from Caesars Entertainment for £2.2 billion.
The combination is expected to deliver “significant operating efficiencies”, including pre-tax cost synergies of at least £100m a year, leading to improved profit margins, 888 said in a statement. It won an auction with Apollo and CVC Capital Partners working with Tipico, a German betting group.
7am: Morrisons sticks to guidance
Supermarket chain Morrisons stuck to its full-year guidance as it reported a 37% drop in first-half profit before exceptional items.
Pretax profit before tax and exceptionals fell to £105m from £167m in the six months to the end of August from a year earlier as revenue excluding fuel increased 3.7% to £9.05bn.
Statutory pre tax profit fell 43.4% to £82m. Morrisons said profit was reduced by £41m of costs directly linked to Covid-19, and £80m of lost profit in cafes, fuel and food-to-go during lockdowns early in the half.
Shares in Asia fell as investors worried about slowing global growth and the potential tapering of central bank stimulus.
Japan’s Nikkei dropped 0.38%. Hong Kong shed 1.17%, with tech names leading the declines there.
On Wall Street the Dow Jones Industrial Average was 0.2% lower, the S&P 500 lost 0.13% and the Nasdaq Composite dropped 0.57%.