BATS transformation continues 'at pace', FirstGroup rejects £1.2bn takeover bid

London pre-open

The FTSE 100 was being called to open 42.3 points lower ahead of the bell on Thursday after closing just 0.08% lower in the previous session at 7,593.00.

Stocks to watch

Tobacco and nicotine products manufacturer British American Tobacco said on Thursday that its transformation was continuing at pace, with strong revenue and volume growth driving market share gains.

British American Tobacco stated further growth in its non-combustible product unit saw its consumer base reach 19.4m in the first quarter of the trading year amid continued new category investment, with over £1.0bn invested in the first half. The FTSE 100-listed firm also maintained full-year guidance for constant currency revenue growth of 2-4%, mid-single-digit adjusted earnings per share growth, and operating cash conversion in excess of 90% of adjusted profit from operations.

Bus and train operator FirstGroup has formally rejected a £1.2bn takeover approach from US private equity firm I Squared, saying it "significantly undervalues" the firm and that a conditional cash component did not provide shareholders with enough certainty.

The bid, which values FirstGroup at up to 163.6p per share, included 45.6p conditional on the amount the company eventually receives from the previously agreed sale of its American businesses, including the Greyhound bus line.

Newspaper round-up

More than 420,000 British gamblers lose at least £2,000 a year, according to a major report that warns losses on the most addictive products are "strongly skewed" towards deprived areas. The report lays bare the punishing losses incurred by the heaviest gamblers and raises "concern" at the low level of intervention by gambling companies to prevent them suffering harm. - Guardian

Amazon shoppers in Britain can now add high-fashion purchases, such as a four-figure Peter Dundas evening gown or a Christopher Kane slingback heel, to their digital shopping baskets. The world's largest online retailer has launched its Luxury Stores at Amazon division in the UK, France, Germany, Italy and Spain, having opened a US version in 2020. - Guardian

A low-profile fund manager who made an investment return of more than 10,000% is stepping down after 39 years. Simon Knott, who has managed the Rights & Issues investment trust since 1984, will step down as its investment manager on 1 September. He will remain as a non-executive director. - Telegraph

John Lewis is targeting suburban locations and commuter towns in the South East as it pushes ahead with plans to build 10,000 rental homes despite warnings that the property market is cooling. The John Lewis Partnership, which also owns Waitrose, said it will build accommodation over supermarkets in Bromley and West Ealing in Greater London, as well as replacing a vacant John Lewis warehouse in Mill Lane, Reading. - Telegraph

Top Gun: Maverick has become the UK's top-grossing film at the box office less than two weeks after opening, displacing Doctor Strange in the Multiverse of Madness. Takings of the film, in which Tom Cruise reprises the role of the US Navy aviator Pete "Maverick" Mitchell he played in 1986, reached £41.3m on Monday, just £388,000 ahead of Doctor Strange. - The Times

US close

Wall Street stocks closed lower on Wednesday after two straight positive sessions for major indices.

At the close, the Dow Jones Industrial Average was down 0.81% at 32,910.90, while the S&P 500 was 1.08% weaker at 4,115.77, and the Nasdaq Composite saw out the session just 0.73% softer at 12,086.27.

Reporting by Iain Gilbert at Sharecast.com