(Alliance News) - The following is a summary of top news stories Tuesday.
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COMPANIES
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Applegreen announced that it has agreed to a EUR718.1 million takeover offer made by the Causeway Consortium. Applegreen operates a number of petrol stations in Ireland, the UK and the US. The Causeway Consortium is a company owned by Blackstone Infrastructure Partners and B&J Holdings Ltd, which is wholly-owned by Applegreen founders Robert Etchingham and Joseph Barrett. B&J Holdings holds a 41% stake in Applegreen. Under the acquisition's terms, Causeway will acquire Applegreen for EUR5.75 in cash - the same price touted earlier in December - being a 48% premium to the stock's closing price of EUR3.88 on December 9, the last business day before the publication of the possible offer announcement.
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Vodafone Group and subsidiary Vodafone Vierte Verwaltungs announced a tender offer to all other shareholders of Kabel Deutschland Holding. The Berkshire, England-based telecommunications company said it will offer EUR103 in cash for each KDG share, and has already received irrevocable undertakings from entities advised by New York-based DE Shaw group, activist investor Elliott Advisors UK and investment management company UBS O'Connor. Together, they hold just over 17% of KDG's share capital, and Vodafone will pay EUR1.56 billion for these shares and own at least 93.8% of KDG. The FTSE 100 constituent said the offer is beneficial to the company and will reduce Vodafone's exposure to ongoing legal proceedings related to the KDG acquisition.
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Low cost airline easyJet said it has agreed with Airbus to defer the delivery of aircraft that had been scheduled for the 2022 to 2024 financial years. The total number of aircraft being purchased has not changed. A total of 22 aircraft will be moved to the 2027 to 2028 financial years, and there will also be the movement of 15 delivery dates within the 2022 to 2024 to match forecast seasonal requirements more closely. easyJet's financial year ends in September. As a result of the deferral, the future cash price of the aircraft being deferred will increase, due to a price escalation mechanism used to reflect market inflation in labour and material costs.
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DFS Furniture reported its gross sales were 19% ahead of a year before during the first 24 weeks of its 2021 financial year. The Doncaster-based furniture retailer also said its gross sales via its online channels were 76% ahead of 2019's figures. The company said its performance "reflects the benefit of a shift in spending to home categories, and also market share gains that led to a particularly strong order intake in the first quarter of its 2020 financial year." The company reported a "resilient" second quarter, despite extensive showroom closures in November due to the national lockdown restrictions. As a result of this, DFS Furniture said it expects its full-year profit before tax and brand amortisation to be in the upper half of the current market forecast range of between GBP81.2 million and GBP118.0 million. In the financial year that ended June 28, DFS Furniture posted a pretax loss of GBP81.2 million.
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SoftBank Group Corp Vision Fund's special-purpose acquisition company, SVF Investment, filed to go public on the Nasdaq exchange in New York, the company reported on Monday. SVF said it would raise USD525.0 million, or USD603.8 million if the underwriters' over-allotment option is exercised in full. Citigroup, Deutsche Bank Securities and Cantor are underwriters to the initial public offering. With SVF, SoftBank has joined the trend for special purpose acquisition companies, shell vehicles that raise money in an IPO before merging with a private firm. Private equity group Apollo Global Management and Bill Ackman's hedge fund Pershing Square have already capitalised on the investment enthusiasm for blank-cheque listings earlier in 2020 and are now hunting for merger deals. SoftBank said in a regulatory filing that it will seek an acquisition in a "technology-enabled sector", naming telecommunications, artificial intelligence and software as options.
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MARKETS
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After a wobbly start to Tuesday, the FTSE 100 had perked up by mid-morning while counterparts in Europe, such as the CAC 40 in Paris and DAX 30 in Frankfurt, charged ahead. "Yesterday's dent to market sentiment that was brought by worries of a new virus strain over the weekend are now being offset, on a very short-term basis at least. Even if the US relief package was already widely priced-in, most investors were finally happy to see it validated," said Pierre Veyret, technical analyst at ActivTrades. In the US, stocks are called for a mixed start. The Dow Jones is pointed down 0.2%, the S&P 500 flat and the Nasdaq Composite up 0.3%.
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FTSE 100: up 0.1% at 6,422.45
FTSE 250: up 0.7% at 19,828.93
AIM ALL-SHARE: up 0.6% at 1,095.51
GBP: higher at USD1.3392 (USD1.3321)
EUR: firm at USD1.2223 (USD1.2217)
GOLD: down at USD1,872.70 per ounce (USD1,875.05)
OIL (Brent): flat at USD50.38 a barrel (USD50.32)
(changes since previous London equities close)
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ECONOMICS AND GENERAL
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The UK economy is estimated to have grown a record 16% in the third quarter of 2020 from the second quarter, the Office for National Statistics said. "This is the largest quarterly expansion in the UK economy since Office for National Statistics quarterly records began in 1955. This reflects the effects of the easing of lockdown restrictions in the third quarter as well as some recovery of activity from the steep contraction in April," the ONS said. The third-quarter reading has been revised from sequential growth of 15.5% reported initially. While a record figure, UK gross domestic product is still 8.6% below where it was at the end of 2019, revised from an initial estimate of 9.7% - and follows a 19% slump in the second quarter of the year and 3.0% fall in the first quarter. Compared with the third quarter a year ago, the UK economy fell by a revised 8.6% in the three months to September.
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UK government borrowing surged to a record GBP31.6 billion in November as efforts ramped up to support the economy through the second wave of the pandemic, official figures have shown. The Office for National Statistics said last month's borrowing – excluding state-owned banks – soared by GBP26 billion year on year and marked the highest seen in November and the third highest in any month since records began in 1993. The latest estimate saw public sector net debt reach a new all-time high of GBP2.1 trillion at the end of last month. It means the UK's overall debt is now around 99.5% of gross domestic product, which is a measure of the size of the economy – a level not seen since 1962. Borrowing has hit GBP240.9 billion for the first eight months of the financial year – GBP188.6 billion more year on year and breaking yet more records.
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The EU is mulling a fresh proposal on fishing rights from UK Prime Minister Boris Johnson as he bids to secure a last minute trade deal, Bloomberg reported late Monday. According to people familiar with the negotiations, Bloomberg said, the UK on Monday offered to give further ground if the EU backed down in other areas. The latest suggestion from Britain would see the EU reduce the value of fish it catches in UK water by around a third, with the UK last week pushing for a 60% cut. The European Commission is talking with national governments before responding, the people said.
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Talks between the UK and France on resuming full trade and transport across the Channel were continuing on Tuesday amid warnings that the border must be running again by Wednesday to avoid disruption to food supplies. Home Secretary Priti Patel said the government is "speaking constantly" with France to achieve a resolution "in both our interests" to get freight moving again. More than 40 countries have banned flights from the UK due to a mutant variant of coronavirus spreading through the country, while lorry drivers spent a second night sleeping in their cabs on the M20 outside the Port of Dover, which has been shut since Sunday night. Reports suggest a possible solution could be mass testing of HGV drivers across the Channel, while the BBC reported that plans to reopen the border will come into effect from Wednesday, citing French Europe Minister Clement Beaune.
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US lawmakers on Monday approved a USD900 billion relief package that will provide a long-sought boost for millions of Americans and businesses battered by the coronavirus pandemic. Overwhelming approval in the Senate and House of Representatives clears the way for the legislation to be sent to US President Donald Trump to be signed into law. "There will be another major rescue package for the American people," Senate Majority Leader Mitch McConnell said in announcing the agreement for a relief bill. "It is packed with targeted policies to help struggling Americans who have already waited too long."
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