Hsu resigns as Micro Focus chief, GKN and Melrose start week in fighting form

London open

The FTSE 100 is expected to open 17 points lower on Monday, having closed up 0.34% at 7,164.14 on Friday.

Stocks to watch

Micro Focus chief executive Chris Hsu has resigned as the company downgraded its profits guidance less than six months after completing the huge acquisition of HP's software arm. The rate of revenue decline "has been greater than anticipated" due to several factors, management said, paring guidance to revenue in a range from -6% to -9%, down from the -2% to -4% range indicated in January.

Following its announcement on 9 March about the proposed combination of Dana Incorporated and GKN Driveline, Dana announced on Monday that the new combined business will hold a standard listing on the London Stock Exchange, in addition to being listed on the New York Stock Exchange. It said the combined group would create a US and UK-led global leader in vehicle drive systems and electric propulsion, that was well-suited to address the long-term demands of global customers, expecting to deliver $235m (£170m) in synergies. Through a standard listing on the London Stock Exchange, Dana said more GKN shareholders would be able to benefit from the “significant value creation” that was expected from the combined group.

Meanwhile, turnaround specialist Melrose issued a statement saying its final offer of 466p in value today and 60% of future value creation, was “clearly superior” to the “hasty break-up” being pursued by the GKN board. In its own announcement, the FTSE 250 firm said after GKN's planned disposals, its orphaned aerospace division could be left overburdened with up to £3bn of volatile gross pension liabilities - equivalent to 11 times its trading profit, and a ratio Melrose said was three times the average for the FTSE 100. The proposed sale to Dana valued Driveline at around £800m less than the valuation that GKN itself assigned to the business as recently as February, Melrose claimed.

Newspaper round-up

The Gambling Commission is to recommend that the government reduce the maximum stake on fixed-odds betting terminals (FOBTs), known as the “crack cocaine of gambling”, to £30 or less. However, in a move likely to come as a relief to bookmakers, the watchdog will not explicitly back a maximum £2 stake, instead suggesting measures to combat the risk of harm. - The Times

Britain risks being held to ransom by Russia unless the vulnerable energy system is fortified, the Government has been warned amid escalating tensions with Europe’s main gas supplier. As relations with Russia sour, energy infrastructure bosses been told by security officials to bolster their defences to guard against a crippling cyber attack on power plants or the national grid. - Telegraph

Rolls-Royce, the engineering giant, is joining the race to build the next generation of energy storage “batteries” using the same material originally designed for hard-wearing contact lenses. The FTSE 100 group said it will work with Superdielectrics, a research company, to use the material to challenge the dominance of traditional batteries. - Telegraph

US close

Wall Street indices finished mixed on Friday, with the Dow Jones Industrial Average adding 0.29% to 24,946.51 and the S&P 500 rising 0.17% to 2,752.01, while the Nasdaq Composite finished flat at 7,481.99.