Babcock rejects takeover approach from Serco, AstraZeneca upbeat on latest 'Calquence' data
London open
The FTSE 100 is expected to open 11 points higher on Monday, having closed down 0.31% at 7,345.78 on Friday.
Stocks to watch
Babcock on Monday confirmed it had rejected in January a “highly preliminary” takeover approach from outsourcer rival Serco - a combination that would create a £4bn defence giant. “The board of Babcock...rejected it, having concluded that a combination of the two companies had no strategic merit and was not in the best interests of Babcock's shareholders, customers or wider stakeholders,” Babcock said in a statement.
AstraZeneca announced detailed results from the interim analysis of the phase 3 ‘ASCEND’ trial on Monday, showing ‘Calquence’ (acalabrutinib) significantly prolonged the time patients lived without disease progression in relapsed or refractory chronic lymphocytic leukaemia (CLL). The FTSE 100 pharmaceuticals giant said that at a median follow-up of 16.1 months, results showed a “statistically-significant and clinically-meaningful” improvement in progression-free survival for patients treated with Calquence compared to idelalisib or bendamustine, reducing the risk of disease progression or death by 69%.
Tritax Big Box REIT has entered into a new £200m unsecured revolving credit facility with a syndicate of its relationship lenders, it announced on Monday. The FTSE 100 company said the new facility had an initial maturity of five years, and could be extended by two further years to a maximum maturity of seven years. It also contained an uncommitted £100m accordion option, and would support the firm’s future investment and development activities, with an opening margin of 1.1% per annum over LIBOR.
Newspaper round-up
Economic growth in Britain is expected to slow to the lowest levels since the financial crisis as firms run down Brexit stockpiles, according to a leading business lobby group. After a stockpiling rush this year that pumped up the rate of economic growth, the British Chambers of Commerce said growth would slow in 2020 and 2021. – Guardian
A $10tn (£7.9tn) investor alliance has accused more than 700 companies, including Amazon, Tesco and ExxonMobil, of failing to reveal the full extent of their impact on the climate crisis, water shortages and deforestation. The major global companies, with a combined worth of more than $15tn, lack transparency over their effect on the environment, according to the intervention by some of the world’s biggest financial names. – Guardian
Almost a thousand shops have closed over the past two years as a direct result of retailers using controversial restructuring tactics to slim their store estate. The new research lays bare the full effect of company voluntary arrangements on the high street. Retailers including Carpetright, Mothercare and Homebase have used CVAs to shut a total 954 stores since the start of 2017, according to fresh analysis by property group Colliers International. The number of CVAs, which have become a tool to renegotiate rents with landlords, have doubled during that period. – Telegraph
The UK aerospace sector has attacked “extreme” politicians endorsing a no-deal departure from the European Union, warning at the Paris Air Show that opens today that it would inevitably prevent leading companies from competing on the global stage. Aviation businesses are poised to continue ratcheting up contingency plans ready for the October 31 Brexit deadline “very soon”, according to industry leaders. – The Times
An investment firm championed by Hargreaves Lansdown is one of the biggest shareholders in the fund supermarket, throwing the spotlight back on the relationships between Hargreaves and the City in the wake of the Woodford affair. Lindsell Train, led by the star fund managers Michael Lindsell and Nick Train, holds an 11 per cent stake in the FTSE 100-listed Hargreaves and is its second-largest shareholder, according to Refinitiv, the data researcher. – The Times
US close
Stocks closed lower on Friday as investors reacted to economic data out of China and tensions between the US and Iran following an attack on two oil tankers in the Gulf of Oman a day earlier.
At the close, the Dow Jones Industrial Average was down 0.07% at 26,089.61, while the S&P 500 closed 0.16% softer at 2,886.98 and the Nasdaq Composite started the session 0.52% weaker at 7,796.66.
The Dow closed 17 points lower after closing higher on Thursday as sentiment was boosted when Donald Trump declined to set a deadline on slapping tariffs on a further $325bn-worth of Chinese imports and energy stocks rallied on the back of two oil tankers being damaged in suspected attacks off the coast of Iran.
However, things headed south at the open and never recovered as market participants turned their attention to geopolitical events.
The White House firmly placed the blame on Iran for Thursday's attacks, with Secretary of State Mike Pompeo stating that Tehran wanted its "successful maximum pressure campaign" lifted.