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FTSE Rises, BT's Bonds Fall on Takeover Bid Speculation

29/11/2021 12:58pm

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BT's Bonds Fall on Takeover Bid Speculation

BT's bonds have fallen in value and on reports that private equity firms are assessing the value of the U.K. telecom's Openreach division, Tradeweb data show. "Bond investors should remain very cautious with BT's bonds," says ING's Jan Frederik Slijkerman, adding that leveraged buyouts typically involve higher leverage and lower ratings. The spread between BT's five-year credit default swaps (CDS)and those of Telecom Italia--which received a takeover bid by U.S. private equity firm KKR earlier in the month--looks too wide, he says. BT's CDS "should not trade at Telecom Italia levels, because there is not a firm bid, but should move wider to start pricing in the probability of a bid, so that it closes a bit less than half of the spread gap."

 
Companies News: 

Amigo Holdings Proposes New Scheme Involving Dilutive Equity Raise, Lending Restart

Amigo Holdings PLC said Monday that it has proposed a scheme to address the complaints liability which involves an equity raise that is likely to result in material dilution for existing shareholders.

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Benchmark Holdings Raises GBP20.7 Mln Via Share Issue

Benchmark Holdings PLC said Monday that it has raised 20.7 million pounds ($27.6 million) via a share issue to fund its growth initiatives.

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Constellation Automotive Launches GBP322.9 Mln Takeover for Marshall Motor

Constellation Automotive Holdings Ltd. on Monday launched a 322.9 million-pound ($430.7 million) takeover for Marshall Motor Holdings PLC.

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Dev Clever Sees FY 2021 Earnings 'Materially Ahead' of Expectations

Dev Clever Holdings PLC said Monday that it expects to report adjusted earnings before interest, taxes, depreciation and amortization materially ahead of management expectations for the year ended Oct. 31.

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Benchmark Holdings Loss Narrowed in FY 2021; Sees FY 2022 Performance in Line With Views

Benchmark Holdings PLC on Monday reported a narrowed loss for fiscal 2021, and said that performance in the current year is in line with expectations.

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Arcontech Sees Performance Slip Below Market Views; Expects Revenue Hit

Arcontech Group PLC said Monday that its performance has fallen below market expectations and that it expects an annualized hit to its revenue of 300,000 pounds ($400,170).

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Ince Sees Slightly Higher 1H Revenue

Ince Group PLC said Monday that it expects to report slightly higher first-half revenue, and that its performance was in line with its expectations.

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Circle Property 1H Pretax Profit Rose, Rental Income Fell

Circle Property PLC said Monday that it swung to a pretax profit for the first half of fiscal 2022 on the back of disposals and greatly reduced valuation losses, though rental income fell.

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Hummingbird Shares Dive as Gold Mine in Mali Is Shut Due to Security Issues

Shares in Hummingbird Resources PLC fell in early trading Monday after it warned that its Yanfolila gold mine in Mali has been taken offline due to security issues, and that as a result, full-year production will be below the bottom end of the guidance range.

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Osirium Technologies Sees 2021 Bookings, Revenue Below Market Views

Osirium Technologies PLC said Monday that it expects bookings and revenue for this year to be similar to last year and slightly below current market expectations.

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Webis Holdings to Report Swing to FY 2021 Pretax Profit

Webis Holdings PLC said Monday that it expects to report a swing to pretax profit for fiscal 2021 on higher revenue.

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Tatneft 3Q Profit Rose on Higher Production

Tatneft PJSC on Monday reported an improved profit for the third quarter, as its oil-and-gas production increased from the previous quarter.

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Genuit Group Appoints Joe Vorih as CEO From Early Next Year

Genuit Group PLC said Monday that it has appointed Joe Vorih as its new chief executive officer from early next year, replacing Martin Payne who said in May that he would will step down during the first half of 2022.

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Santander Names Mike Regnier UK CEO

Banco Santander SA said Monday that it has appointed Mike Regnier as chief executive officer of its U.K. business.

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Victoria PLC to Acquire Balta's UK Rugs, Carpet Units for EUR138 Mln

Victoria PLC said Monday that it has agreed to acquire Belgium-based flooring company Balta Group's U.K. carpets and rugs divisions for around 138 million euros ($156.2 million).

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San Leon Energy Investee Agrees Loan to Increase Stake in Nigerian Oil-And-Gas Block

San Leon Energy PLC said Monday that its investee Eroton Exploration and Production Company Ltd. has signed a non-binding term sheet for a prospective $750 million lending facility to buy an additional 18% interest in the OML 18 oil-and-gas block in Nigeria.

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International Personal Finance 3Q Profit Slips

International Personal Finance PLC said Monday that its pretax profit slipped slightly in the third quarter of the year, but that it swung to a profit in the year-to-date.

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Simec Atlantis Energy Appoints Andrew Charters as CFO

Simec Atlantis Energy Ltd. said Monday that Andrew Charters has been appointed to the board as an executive director and will become the company's new chief financial officer.

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Reliance Industries Denies BT Group Bid Intent

India's Reliance Industries Ltd. on Monday denied that it was considering a bid for U.K. telecom group BT Group PLC.

 
Market Talk: 

Johnson Matthey Gains After Tata Battery-Talks Report

1156 GMT - Johnson Matthey is among the biggest FTSE 100 risers, up 4% after a report claimed India's Tata Chemicals was in talks with the catalytic-converter maker about buying its battery-material business. The discussions began earlier this month after Johnson Matthey announced plans to off-load the division, Indian business-news publication Mint cited unidentified sources as saying. No one from Johnson Matthey was available to comment. "The price tag rumored to be attached to the potential bid, of between $500 million-$700 million, is clearly regarded as attractive as it would give the company more financial firepower to expand its presence in hydrogen technologies," Hargreaves Lansdown analyst Susannah Streeter says.

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BT Surges After M&A, Takeover Reports

1008 GMT - BT Group shares top the FTSE 100 risers, up 8% following reports about potential M&A and takeover interest in the U.K. telecom. Private-equity firms and investment funds including CVC, Apax, Brookfield and Macquarie are eyeing BT's network arm, according to sources cited by the Mail on Sunday. Meanwhile, another report claimed India's Reliance Industries Ltd. could bid for the whole company. It comes after KKR & Co approached Telecom Italia. French billionaire Patrick Drahi, the founder of Altice, owns 12.1% of BT and Deutsche Telekom already has a sizeable stake, AJ Bell says. "It will be interesting in this context to see if this rumored move by Reliance flushes out other parties," Bell investment director Russ Mould says.

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BT Shares Rise After Reliance Industries Bid Report

0959 GMT - BT Group shares rise after a media report that Indian conglomerate Reliance Industries may bid for control, AJ Bell says. The report about the British telecommunications provider comes after Reliance was recently outbid on a deal for control of a Dutch unit of T-Mobile. French billionaire and Altice founder Patrik Drahi has built up a position in BT and Deutsche Telekom also have a sizeable stake, so a bidding war may be afoot, the brokerage says. "Despite its substantial pension liabilities and debts and iffy track record, it has a near-monopoly position in the U.K.'s broadband network. And, for all its recent woes, BT has the capacity to generate substantial cash flows," AJ Bell says. Shares are up 8.8% at 167.55 pence.

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Omicron Rattles Interest-Rate Expectations

0922 GMT - The discovery of the omicron Covid-19 mutation last week has upended market pricing of future interest rates globally. Fears that the new variant may derail the nascent economic recovery as governments reimpose social restrictions and travel bans have prompted investors to cut risk and piled back into safe assets, including U.K. government bonds. The setback from the new virus strain has increased the chance that Bank of England policymakers may hold interest rates in December. "Market participants will now have to be prepared for a substantially wider range of possible outcomes," UniCredit analysts say. The BOE's policy decision is due on Dec. 16. The 10-year gilt yield trades last at 0.846%, after closing last Friday at 0.815%, the lowest level since Sept. 2021, according to Tradeweb.

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Equities Look More Attractive Than Bonds Despite Virus-Driven Volatility, CS Says

0904 GMT - Markets will likely remain volatile until more is known about the new variant of the coronavirus, but keeping equities at a small overweight and bonds at an underweight is still the right strategy, Michael Strobaek, global chief investment officer at Credit Suisse, says. News of the spread of the variant caused sharp risk-off moves on Friday, and there will likely be further market reactions this week, he says. "Financial markets will be inevitably affected by bouts of volatility into 2022... When they affect risk assets and raise the equity risk premium, it is an opportunity to take exposure to selected equities," he says. Specific sectors favored by CS include logistics and pharmaceuticals, which are considered more defensive by nature.

 

Contact: London NewsPlus, Dow Jones Newswires; Write to Sarka Halas at sarka.halas@wsj.com

(END) Dow Jones Newswires

November 29, 2021 07:43 ET (12:43 GMT)

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