(Alliance News) - Investment bankers continued their busy start to 2021 on Monday, with several companies confirming or announcing IPO, amid more merger and acquisition deal flow.
Auction Topco confirmed its plan for a London Main Market float in March, expecting to raise about GBP250 million, giving the online auction platform a GBP600 million enterprise value.
On AIM, Cornish Metals raised GBP8.2 million ahead of its start of trading on Tuesday next week. The funds will be used to develop its United Downs copper-tin project in Cornwall.
Also announcing plans for an initial public offering on AIM was AMTE Power, hoping to raise GBP7 million. The company develops lithium-ion battery cells for high-performance vehicles and other specialist uses at its manufacturing plant in Thurso, Scotland. It said it has access to intellectual property from FTSE 250-listed defence technology firm QinetiQ.
Meanwhile, Arrow Global has agreed to a fourth all-cash takeover offer from TDR Capital. The price of 305 pence compares to a first offer of 250p back in December. Zachary Lewy, founder & chief investment officer of Arrow, has entered a binding letter of support with TDR.
Arrow Global shares were up 28% in early trade Monday at 295.50 pence, giving a GBP524 million market cap.
Also agreeing to be bought was Reading, England-based Dialog Semiconductor.
Here is what you need to know at the London market open:
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MARKETS
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FTSE 100: up 0.3% at 6,509.66
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Hang Seng: up 0.1% at 29,319.47
Nikkei 225: closed up 2.1% at 29,388.50
DJIA: closed up 92.38 points, or 0.3%, at 31,148.24
S&P 500: closed up 0.4% at 3,886.83
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GBP: up at USD1.3737 (USD1.3728)
EUR: up at USD1.2048 (USD1.2025)
Gold: up at USD1,815.07 per ounce (USD1,808.40)
Oil (Brent): up at USD60.10 a barrel (USD59.62)
(changes since previous London equities close)
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ECONOMICS AND GENERAL
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Monday's Key Economic Events still to come
none scheduled
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Britons face needing a third jab this year amid concerns about the Oxford University and AstraZeneca vaccine's effectiveness against the South African coronavirus variant. UK Vaccines Minister Nadhim Zahawi was forced to defend the vaccine after a new study in South Africa found it was not effective at preventing mild illness caused by the more infectious mutation. South Africa has suspended the rollout of the British-designed vaccine to healthcare staff following the results, which have yet to be peer reviewed. Zahawi urged the public to keep faith with the Oxford jab as scientists working on the vaccine raised the prospect of having a booster dose available by the autumn. The number of people in the UK who have received a first dose of a vaccine passed the 12 million mark, with jabs administered at a rate of almost 1,000 per minute during a one hour period over the weekend.
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BROKER RATING CHANGES
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RBC RAISES JD SPORTS FASHION TO 'OUTPERFORM' (SECTOR PERFORM) - TARGET 950 (900) PENCE
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GOLDMAN SACHS RAISES LLOYDS BANKING TO 'NEUTRAL' (SELL) - PRICE TARGET 38 (33) PENCE
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JEFFERIES RAISES TAYLOR WIMPEY TO 'BUY' ('HOLD') - TARGET 203 (156) PENCE
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JEFFERIES CUTS BARRATT DEVELOPMENTS TO 'HOLD' ('BUY') - TARGET 787 (772) PENCE
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COMPANIES - FTSE 100
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Rolls-Royce is planning to shut down its jet engine factories this summer due to insufficient work, the Telegraph reported on Saturday. According to the newspaper, this is the first time Roll-Royce has done this and results from what Rolls-Royce described as a "significantly reduced" workload resulting from the Covid-19 pandemic. The two-week closures, focused around its headquarters in Derby, will affect all of the 19,000 staff within Rolls-Royce's civil aerospace division, including 12,500 UK staff, who make airliner jet engines.
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Credit checking firm Experian noted that "data which is being illegally offered for sale on the internet, some of which may have been sourced from Serasa's non-sensitive marketing data". Serasa is a Brazilian unit owned by Experian. Like its parent, Serasa provides credit granting and validation services. Experian said it is "continuing to carry out a detailed forensic investigation". So far, the company explained, it knows that data offered includes photographs, social media logins, vehicles registrations, and "social security INSS", the latter concerning social security contributions in Brazil. Experian however, noted that this data is not collected by Serasa. "There is no evidence that positive or negative credit data has been illegally obtained from Serasa," the company said. "In spite of exhaustive investigations to date there is no evidence that our technology systems have been compromised."
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COMPANIES - FTSE 250
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Electrocomponents posted improved revenue over the past four months, but noted "heightened freight, labour and logistical costs". Revenue in the four months ended January 31 was up 8% annually on a life-for-like basis. In the second quarter to September, like-for-like revenue had fallen 4%. In the first-quarter ended June, it plunged 11%. The distributor of industrial and electronic products left its annual profit outlook unchanged, "with stronger revenue growth offset by additional ongoing costs". "The heightened freight, labour and logistical costs we are experiencing are likely to persist at a time of ongoing investment in our proposition. Despite these pressures, our confidence in our strategy remains strong," Electrocomponents said.
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Power station operator Drax Group said it plans to bolster its Canadian unit with the purchase of Pinnacle Renewable Energy. It will acquire Pinnacle at CAD11.30 per share, valuing the renewables firm's fully diluted equity at CAD385 million, about GBP226 million. The sum implies an enterprise value of CAD741 million. Drax added: "The acquisition, which remains subject to Drax and Pinnacle shareholder approval, court approval, regulatory approvals and the satisfaction of certain other customary conditions, has been unanimously recommended by the board of Pinnacle and has the full support of Pinnacle's major shareholder, affiliates of ONCAP." ONCAP holds about 31% of Pinnacle's shares, Drax noted.
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COMPANIES - MAIN MARKET AND AIM
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boohoo joined online peer ASOS in snapping up retail brands from the failed Arcadia Group. boohoo will buy the e-commerce and digital assets and associated intellectual property rights of Burton, Dorothy Perkins and Wallis for GBP25.2 million from Arcadia's joint-administrators. "This is a great acquisition for the group as we extend our market share across a broader demographic, capitalising on growth opportunities as more and more customers shop online. We continue to grow our portfolio of brands and customer base, strengthening our position as a leader in global fashion e-commerce," boohoo Executive Chair Mahmud Kamani said. The deal does not include any stores, however. Philip Green's Arcadia Group went under back in November, putting 13,000 jobs at risk. The UK high street continues to suffer from restrictions to control Covid-19. Like Arcadia Group, department store chain Debenhams also sunk into administration. boohoo in January announced a deal for all of the intellectual property assets of Debenhams Retail for GBP55 million in cash.
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Amazon.com, boohoo, ASOS and other internet retailers could be hit with an online sales tax in a move designed to claw back money the UK owes after heavy borrowing during the pandemic. Treasury sources confirmed Chancellor Rishi Sunak is considering targeting companies that have done well out of the pandemic in order to pay back UK government debts incurred while supporting industries through the coronavirus crisis. The move is being considered as part of a review into business rates following a consultation last year. Amazon sales in the UK soared by 51% to almost GBP20 billion last year as lockdown restrictions buoyed the e-commerce giant, with people forced to buy online due to Covid restrictions. The Sunday Times reported that leaked emails showed UK Treasury officials had summoned tech firms and retailers to a meeting this month to discuss how an online sales tax could work.
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A regulatory filing showed Mike Ashley's Frasers Group sold its entire 24.93% stake in French Connection Group in a transaction on Thursday. French Connection on Friday noted it received two separate takeover approaches. The proposals were from Spotlight Brands in conjunction with Gordon Brothers International and from Go Global Retail in conjunction with HMJ International Services. French Connection has a GBP25.6 million market capitalisation, making the nearly 25% stake sold by Frasers Group worth about GBP6.4 million.
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COMPANIES - GLOBAL
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South Korean automaker Hyundai Motor and affiliate Kia Motors denied news reports they were in talks with Apple for a joint project to make autonomous vehicles, sending their shares tumbling in Seoul. The announcement came about a month after the country's cable broadcaster Korea Economic TV said the iPhone maker had approached Hyundai to discuss a potential partnership to develop electric vehicles and batteries for them. Reports last week suggested they could produce cars in the US state of Georgia. But on Monday Hyundai and Kia said in regulatory filings they were "not discussing autonomous electric car development with Apple". Both carmakers added that they had talked with multiple firms about such projects, but no decision had been made.
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French energy and water company Veolia Environnement announced Sunday it is offering EUR7.9 billion for the 70.1% of rival Suez it doesn't already own, taking an aggressive stance in its long-running takeover bid. The USD9.5 billion offer is the latest in a saga between the two massive French companies in which Veolia has manoeuvred to become Suez's main shareholder. With its new offer, it is renouncing attempts to win over its rival's board and moving aggressively to shareholders. Suez responded by saying that the takeover bid would be "irregular and illegal", with a spokeswoman saying it showed Veolia never intended to proceed in a friendly manner.
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Frankfurt-listed Dialog Semiconductor said it has agreed to an all-cash takeover offer from Renesas Electronics. Renesas is a semiconductor maker headquartered in Tokyo. Under the terms of the acquisition, each Dialog shareholder will be entitled to receive EUR67.50 in cash per share. The acquisition values Dialog's equity at EUR4.89 billion. Dialog shares closed flat on Friday in Frankfurt at EUR56.12 each. Dialog, a Reading, England-based manufacturer of semiconductors, noted the offer price of EUR67.50 represents a premium of 20% to that price. Shares were up 15% at EUR64.74 early Monday.
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Monday's Shareholder Meetings
Blue Star Capital PLC - AGM
Schroder UK Mid Cap Fund PLC - AGM
Actual Experience PLC - GM re share placing
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By Tom Waite; thomaslwaite@alliancenews.com
Copyright 2021 Alliance News Limited. All Rights Reserved.
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