UK stocks booked a positive start to the new week boosted by merger and acquisition activity and gains in overseas earners. US markets were closed for Martin Luther King Day.

Sterling gave back some ground to $1.3650 after its month-long rally against the dollar but Brent oil prices remained stubbornly high at around $85.9 per barrel.

At the close the FTSE 100 index of leading shares was up 0.9% to 7,611 points, led by financial stocks and overseas earners which took advantage of the pause in the pound’s run.

PHARMA HEADLINES

Drug maker GlaxoSmithKline (GSK) said it had rejected three unsolicited approaches for its majority-controlled consumer healthcare unit from household goods giant Unilever (ULVR), the most recent of which came in December valuing the business at £50 billion.

Glaxo believes the bids all ‘fundamentally undervalued’ the unit, which is owned 68% by the UK firm and 32% by US drug maker Pfizer.

For its part, Unilever said its interest was part of its strategic repositioning into higher-growth categories such as health, beauty and hygiene, together with the disposal of lower-growth categories. The firm said it would announce ‘a major initiative’ to enhance its performance later this month.

Glaxo shares rallied 4.1% to £17.09 on the news while investors marked Unilever shares down 6.5% to £36.80.

Specialist pharmaceutical firm Clinigen (CLIN:AIM) announced it had agreed a revised bid from Triley Bidco of 925p per share in cash against its previous offer of 883p back in December. Curiously, the shares dropped 0.8% to 898p.

Shares in Hikma Pharmaceuticals (HIK) added 0.6% to £20.69 after the company said it would acquire the Canadian assets of Teligent for $45.75 million, cementing its position in North America. The deal brings 25 sterile injectable products and a pipeline of seven new products, four of which are already approved.

Biotech firm Destiny Pharma (DEST:AIM) provided a positive update on its late-stage clinical treatments and said it was ‘excited about the year ahead’, sending up 0.3% to 106.3p.

MORE COMPANY NEWS

Shares in house builder Taylor Wimpey (TW.) gained 4.2% to 160.4p after the group posted an upbeat summary of its 2021 performance thanks to strong demand for new homes and higher pricing which helped lift margins.

Following last week’s drubbing for the shares on the government’s plan to make developers pay for the cost of rectifying safety issues on high-rise buildings, the firm said it believed the amount it had provisioned for the work was ‘a reasonable estimate’ of the costs.

It also said it remained ‘committed’ to returning excess capital through a share buyback, although it would confirm its plans at the time of its full year results ‘in light of prevailing circumstances’.

Hostmore (MORE), which owns the American-themed casual-dining chain Fridays, reported December trading ahead of expectations in spite of higher cancellations.

As a result, the firm said, full year EBITDA (earnings before interest, taxes, depreciation and amortisation) would be ‘well ahead’ of market estimates of £18.6 million, sending shares up 5.8% to 116p.

Pawnbroker H&T (HAT) said second-half trading to December was ‘consistently strong’ thanks to continued demand for high-quality pre-owned watches and jewellery both online and in-store, and confirmed its pre-tax profit guidance.

The firm’s revenues for the full year were up more than 20% with retail sales in the second half back to pre-pandemic levels. The shares gained 0.5% to 294p.

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Issue Date: 17 Jan 2022