Plans to buyout UK shopping centres operator Intu Properties (INTU) have fallen through after a consortium led by the group’s chairman John Whittaker pulled the plug.
This comes a huge disappointment to investors in the owner of Manchester's Trafford Centre, sparking a massive 38%-plus slump in the Intu share price, to 117.85p. That values the business at about £1.6bn.
This is the second time this year that a bid for Intu has been abandoned after Hammerson’s (HMSO) aborted £3.4bn takeover offer in April.
This has a knock-on effect across the UK property sector, with Hammerson, Land Securities (LAND) and British Land (BLND) all in decline in early trade on Thursday, with the former off more than 6% at 393.8p.
The Intu deal disappointment does little to slow UK markets overall, with investors encouraged by dovish interest rate comments overnight in the US lifted stocks in New York.
The Dow surged more than 600 points on Wednesday after US Federal Reserve chairman Jerome Powell pointed to rough ‘neutral levels’ for US rates, potentially signalling a slowdown in rate rises for the foreseeable future.
The wider S&P 500 and Nasdaq also rallied strongly on Powell’s comments.
In response, the FTSE 100 rallies more than 50 points in early trade on Thursday to 7,058.13, with all UK indices also positive.
INVESTOR QUENCH THIRST WITH BRITVIC
Elsewhere in UK corporate news, Britain's biggest supplier of soft drinks Britvic (BVIC) continues to benefit from consumers switching to low or no sugar soft drinks.
Britvic reported a rough 5% rise in both annual revenues and pre-tax profits, beating the expectations of analysts. The company posted £117.1m pre-tax profit on approximate £1.5bn of sales.
Forecasts look likely to be lifted for the current 12 months to 30 September 2019, sending shares in the £2.18bn company rallying more than 5% to 822.5p.
The UK funerals market is facing a formal investigation as the competition regulator becomes increasingly worried about industry prices and the lack of clarity on services offered.
The Competition and Markets Authority (CMA) started a preliminary inquiry into the sector six months ago but has now firmed up its plans to take a long hard look at the sector. That news unsurprisingly spooks investors around Dignity (DTY), the UK’s number two funeral services provider, sending the stock spinning more than 17% lower on Thursday to 834p.
In January Dignity issued a massive profit warning after pressures on pricing and intense competition reached breaking point, forcing the company to completely re-set its pricing model. That event saw the company’s valuation lose nearly two-thirds over the following couple of weeks.
Veterinary practice operator CVS (CVS) sees its share price sink more than 13% to 626.5p after warning of rising day rates for locum vets. That’s going to squeeze profit margins this year, the company tells the market.
CHEAP RESTAURANT SHARES FLOOD MARKET
The scale of investor unhappiness with yesterday’s Wagamama takeover by Restaurant Group (RTN) is still being felt as shares in the Garfunkel’s chain-owner sink another 27.5% in early trade on Thursday to 144.6p.
The £559m deal was narrowly voted through at an general meeting on Wednesday, prompting a 17% share price fall. Part of the reason for today’s further steep decline is the market being flooded with millions of discounted new shares after Restaurant Group’s £315m rights issue came into effect, needed to part fund the Wagamama purchase.
Holidays operator Thomas Cook (TCG) reveals the full extent of its damp demand and soaring debt woes in full year results.
They show the company posting a whopping £163m annual pre-tax loss compared to a £9m profit a year earlier. Earlier this week, it warned that its underlying profit would miss forecasts which it blamed on hot summer weather in the UK and disruption to flights.
Shares in Thomas Cook are stable at 36.14p on Thursday, with analyst and investors now able to take a long hard look at the detailed figures before making their next moves.
UNILEVER BOSS TO RETIRE
The chief executive of consumer products giant Unilever (ULVR) Paul Polman is to retire at the end of this year. Polman will be sorely missed by investors having led the Anglo-Dutch Marmite-owner for more than 10 years, a period during which the share price has more than doubled.
He will be replaced on 1 January 2019 by Alan Jope, who is currently the president of Unilever's beauty & personal care division.
Unilever stock adds 0.7% at £42.875.
In the resources space, mining giant Rio Tinto (RIO) has given the green light to plans to invest $2.6bn in the Koodaideri iron ore mine in Western Australia.
Rio shares nudge 1.4% up at £36.165.
There are also half year results from car auction operator BCA Marketplace (BCA), brewer Greene King (GNK) and a trading statement from transport company Go-ahead (GOG) on Thursday.
