Niche drug maker Shire (SHP) has finally cracked under pressure and agreed to a merger with US pharmaceuticals group AbbVie (ABBV:NYSE). News that the board has recommended a £53.19 per share cash and shares offer sees Shire's stock rise 1.9% to £48.97, implying that the market sees this as a done deal. The agreement, which values the UK company at £32 billion, appears to have ended a drawn out takeover saga that has run for 10 weeks.
The UK markets watchdog the Competition and Markets Authority (CMA) is calling for a widespread probe into the current account and small business lending markets. This is putting downward pressure on sector share prices across the board, led by part-state owned lender Royal Bank of Scotland (RBS), falling 2% to 317.3p. Lloyds Banking (LLOY) also slips, down 0.7% to 72.6p, as does TSB Bank (TSB), recently spun-out of Lloyds, 1.6% off at 280.25p.
Ten pin bowling site operator Essenden (ESS:AIM) jumps 2.3% to 68p after reporting a 6.1% rise in like-for-like sales in the half year to 29 June. The company says interim results, to be announced in September, will show 'significant growth' in earnings before interest, tax, depreciation and amortisation (EBITDA). Shares highlighted the small cap's turnaround potential back in January when the stock was trading at 49.5p.
Satellites operator Avanti Communications (AVN:AIM) loses just a bit more than 2% to 225p despite telling the market it will post wider pre-tax loses for the year to June than expected. Canaccord had been expecting a $58.8 million pre-tax loss.
Home shopping-to-education supplies firm Findel (FDL), a running Shares Play of the Week, sheds 3.6p to 253p on a mixed trading update. Findel delivered a substantial improvement in profit over the seasonally-quiet opening 15 weeks of the first half, though it concedes sales were lower due to timing differences. Sales will be more second quarter weighted and Findel still expects to hit full-year profit forecasts.
European electrical goods retailer Darty (DRTY) cheapens 0.75p to 86.5p on the news finance director Dominic Platt is off to pastures new. Platt has played a key role in the retailer's restructuring, key planks of which Shares recently outlined in detail.
Irish logistics group DCC (DCC) dips 1.3% to £34.53 despite guiding for a 10% to 12% increase in operating profit and adjusted earnings per year in the 12 months to March 2015 following a good first quarter. While that sounds good, it is really too early in the financial year to warrant any earnings upgrades as the first quarter only accounts for circa 15% of full-year profits. Analysts will want to see evidence that the trend continues before tweaking their numbers.
LED lighting kit designer PhotonStar LED (PSL:AIM) is raising £2.2 million working capital in a share placing at 7p, a rough 7% discount to yesterday's 7.5p close. The shares slide 3.3% to 7.25p with a threat of revenues moving to the right in an accompanying veiled warning.
Financial publishing group Euromoney Institutional Investor (ERM) falls 1.9% to £10.62 after analysts downgrade forecasts. The red pens are out due to weakness in the firm’s core financial services markets and sterling strength, as unveiled at 16 July’s third-quarter trading update. Broker Westhouse downgrades 2014 pre-tax profit numbers to September by around 3%, while it shaves 1.5% off its forecasts to September 2015, despite the earnings accretive impact of African mining trade event and investment forum, Investing in African Mining Indaba, from Summit Professional Networks whose purchase was announced at the update.
A farm-out agreement over two licences in Northern Ireland sees AIM-quoted UK energy company InfraStrata (INFA:AIM) up 2.9% to 9p. The agreement will see Larne Oil & Gas take a 50% interest, joining joint venture partners Brigantes Energy and Terrain Energy, in return for funding Infrastrata's costs on the drilling of the Woodburn Forest-1 well, expected around the end of the year and targeting around 40 million barrels of oil.