Sky urges shareholders to accept Comcast offer, Randgold to merge with Canadian rival Barrick
London open
The FTSE 100 is expected to open 19 points lower on Monday, having closed up 1.67% at 7,490.23 on Friday.
Stocks to watch
Sky urged its shareholders on Monday to accept a takeover offer from US-based Comcast after it outbid Rupert Murdoch’s 21st Century Fox for the London-listed broadcaster. Sky said the Comcast offer of £17.28 per share represents an “excellent outcome” for its shareholders, at a premium of 125% to the closing price 6 December 2016, which was the last business day before Fox’s initial approach. In an almost unprecedented auction held by the UK’s Takeover Panel on Saturday, Comcast outbid Fox’s £15.67 per share bid for Sky.
AstraZeneca announced positive results from the phase III ‘DECLARE-TIMI 58’ cardiovascular outcomes trial for its ‘Farxiga’ dapagliflozin treatment on Monday - the broadest SGLT2 inhibitor cardiovascular outcomes trial conducted to date. The FTSE 100 drugmaker said the trial evaluated the cardiovascular outcomes of Farxiga against placebo over a period of up to five years, across 33 countries and in more than 17,000 adults with type-2 diabetes who had multiple cardiovascular risk factors or established cardiovascular disease. It said that in the DECLARE-TIMI 58 trial, Farxiga met its primary safety endpoint of non-inferiority for major adverse cardiovascular events.
Randgold Resources has agreed to a merger with larger Canadian rival Barrick Gold to create a $18.2bn giant. The deal will see the UK company's shareholders receive 6.128 shares in Barrick and therefore owning 33.4% of an enlarged New York- and Toronto-traded group that will be delisted from London.
Newspaper round-up
US firms are taking advantage of the cheap pound to snap up some of Britain’s most successful businesses at bargain prices, according to the latest mergers and acquisitions data. The value of deals involving US companies buying UK businesses more than doubled to £79bn in 2017-18 from £36.8bn in the previous year. The low value of sterling, which last week slumped to $1.30 in the wake of Theresa May’s post-Salzburg statement, has given American buying power a boost and allowed US firms to outbid rivals. – Guardian
Employee ownership schemes in large companies could result in almost 11 million workers being given up to £500 a year each, in plans to be expanded upon by the shadow chancellor on Monday. Under the scheme, every company with 250 or more employees will be expected to create an “inclusive ownership fund” (IOF) under a future Labour government, John McDonnell will say. – Guardian
City regulators have been urged to investigate UK links to a €200bn (£180bn) dirty-money scandal at Denmark’s largest lender Danske Bank. Anti-corruption groups told the Telegraph that the Serious Fraud Office (SFO) and Financial Conduct Authority (FCA) should investigate the case and consider stripping Danske of its UK banking licence. – Telegraph
Profits at River Island have plunged 40pc as the chain invested in the business to cope with the shift in shopping habits online. Ben Lewis, the chief executive, said sales were moving to its website, but shops remained a “very important part” of the customer experience. Operating profits sank to £80.6m for the year ending December 2017, down from £135.7m the year before, as it invested in stock, distribution and technology to underpin its multichannel offer. Sales edged 3pc lower to £944.5m. – Telegraph
Jeremy Darroch, Sky’s chief executive, is in line to receive £50 million after the sale of the satellite broadcaster to Comcast for more than £30 billion. America’s largest cable television provider prevailed this weekend in a protracted takeover struggle against 21st Century Fox, which already owns 39 per cent of Sky and was bidding with Disney’s backing to take full control. – The Times
Drax is in talks to buy Scottish Power’s gas and hydroelectric power plants in its latest attempt to diversify beyond its main North Yorkshire power plant. The FTSE 250 energy company derives the vast majority of its profits from Britain’s biggest power station, but it is trying to broaden its business. – The Times
US close
Wall Street finished on a mixed note on Friday, weighed down by weakness in the technology space, although the Dow Industrials did manage to eke out a fresh record high.
By the end of the day, the Dow Jones Industrial Average had climbed 0.32% or 86.52 points to 26,743.50, while the S&P 500 was 0.04% lower at 2,929.67 and the Nasdaq Composite fell 0.51% or 41.28 points to 7,986.96.
Connor Campbell, a financial analyst at SpreadEx, said: "For the Dow Jones, it could only add 40 or so points after the bell. Still, that was enough for the index to cross 26700, a record high for an index that has climbed and climbed since the start of July despite the unpleasant – but, in the eyes of investors, not as bad as it potentially could be – diplomatic and economic relationship between the US and China."
Sentiment on Thursday was underpinned by some solid economic data, as jobless claims and the Philadelphia Fed's manufacturing index came in ahead of forecasts, while an index of leading economic indicators signalled that the US economy could grow by 3% in the second half of this year.
CMC Markets analyst David Madden said: "The Dow Jones and S&P 500 hit all-time highs yesterday as fears surrounding the US-China trade standoff subsided. The tariffs that were announced by both sides during the week were deemed to be not as harsh as originally suspected.
"The US, in particular, showed restraint, but that was partially so the Trump administration would have more ammunition should they feel it is required down the line. Now that the latest series of tariffs are out of the way, investors fell back into their bullish routine."