UK stocks gave up their early gains on Monday as a pick-up in merger and acquisition activity was offset by increasing worries over the new strain of the virus.
By midday the FTSE 100 index of leading shares was down 20 points or 0.3% to 6,674 as weakness in travel and financial stocks offset gains in retailers and miners.
Gold prices slipped 0.2% to $1,851 an ounce and Brent Crude gained 0.5% to $57.5 a barrel while the pound was 0.2% higher at $1.37.
Online fashion retailer ASOS (ASC) confirmed that it was in exclusive discussions with the administrators of Arcadia over the acquisition of the Topshop, Topman, Miss Selfridge and HIIT brands. The shares jumped 6.5% to £51.
The company said the transaction represents a ‘fantastic opportunity’ to grow the group's target addressable market and increase the share of wallet opportunity through a new capital light and low risk operating model that is complementary to the group's direct-to-consumer multi-brand platform. Shares added 4.4% to 347p.
In a separate announcement, the company said that Calquence had met its the primary endpoint in the Elevate-RR phase three trial, demonstrating non-inferior progression-free survival for adults with previously treated, high-risk chronic lymphocytic leukaemia compared to ibrutinib. The shares gained 0.8% to £78.40.
Shares in AIM-listed wealth manager AFH Financial (AFHP:AIM) jumped 14% to 452p after independent directors to the firm agreed a 463p per share takeover from US private equity investor Flexpoint Ford.
Having grown rapidly through acquisitions since its IPO, the firm believes the tie-up will give it greater access to debt and equity funding to continue its expansion plans.
In a pre-close trading update global automotive fluid storage and systems company TI Fluid Systems (TIFS) said strong fourth quarter cash generation will result in full-year adjusted free-cash flow being ‘well ahead’ of its expectations.
Revenues for the year ended 31 December 2020 are anticipated to be in line with the decline in global light production volumes. The board declared an interim dividend of euro 6.74 cents per share to be paid in February. The shares accelerated 2% to to 240p.
BEAR RAID RESPONSE
Payments company Network International (NETW) reiterated that it had found ‘no evidence of wrongdoing’ at DPO, a company that it recently acquired with connections to Wirecard executive Dietmar Knoechelmann.
The company said it had published on its website answers to frequently asked questions, providing final responses to issues raised in a critical report in December by short-seller ShadowFall Research. The shares slid 4.7% to 349p.
Financial services company JTC (JTC) said it continued to ‘perform well’ in the second half of the year and expected annual results to meet management and consensus estimates following new business wins.
It added that EBITDA (earnings before interest, taxes, depreciation and amortisation) margin remained stable and within guidance with the private client services division continuing to perform strongly. The shares gained 3% to 594p.
The acquisition upped the size of the Titanium portfolio to around €317 million, nearly double its value at launch in August of €168 million. The shares gained 1.7% to 88p.
Consumer gift packaging business IG Design (IGR) said performance in the nine months to 31 December 2020 had been stronger than expected but ongoing restrictions and uncertainty meant the full-year outlook remained in line with current market expectations. The shares added 3.4% to 542p.
Shares in pawnbroking group H&T (HAT) jumped 10% to 297p after the company said full-year pre-tax profit was expected to be ahead of market expectations following stronger-than-anticipated performance in November and December.
Almost all the 253 stores remain open, albeit with shortened trading hours, the company said.