FTSE 100 Live 16 September: Mid-cap takeover action continues, Phoenix keeps SunLife
Market wrap: Mid-cap takeover action continues, M&S leads FTSE 100
09:57 , Graeme Evans
The run of FTSE 250 takeover action continued today after TI Fluid Systems revealed it had rejected a bid proposal worth about £875 million.
The specialist in automotive fluid systems, including brake and fuel lines, is the subject of interest from fellow car industry supplier ABC Technologies.
The Canada-based firm, which is backed by Apollo Global Management, said it is reviewing its position after two unsuccessful approaches.
TI Fluid said the latest 176p-a-share proposal, which follows one pitched at 165p at the end of August, significantly undervalued the company and its prospects.
The shares, which have been listed on London stock market since 2017, rose 13% or 18.6p to 164.4p. Other FTSE 250 bid targets this year have included Centamin, International Distribution Services and Britvic.
Alongside TI Fluid Systems on the mid-cap risers board, Playtech shares rose 46p to 700p after the gambling industry technology platform lifted full-year guidance.
The upgrade, which has taken Playtech’s valuation to its highest since early 2022, has been driven by a combination of revenue growth in the Americas and a focus on tighter cost control in its business-to-business division.
The FTSE 100 index was unchanged at 8273.17 amid caution ahead of Wednesday’s US interest rates decision.
Retail stocks fared well in London’s top flight as Marks & Spencer lifted 2% or 6.1p to 357.3p and Primark owner Associated British Foods improved 26p to 2215p.
Phoenix Group fell 3% or 16.5p to 560p after the savings and retirement business said alongside interim results that it no longer intends to sell SunLife.
Outside the FTSE 350, shares in TT Electronics tumbled 31% or 43.7p to 98.3p after it revealed the impact of operational issues at two sites in North America.
It also said that recent order intake in its North American components business has been for delivery through 2025, not in 2024 as had been expected.
While the rest of the group has performed in line with expectations, adjusted profit will be between £37 million and £42 million compared with the City consensus of £55.4 million.
On AIM, the surveillance and security business Synectics jumped 14% or 28p to 231p as it said a strong third quarter performance had left it on track for underlying profits materially ahead of market expectations.
Traders divided over US interest rate outlook
09:13 , Graeme Evans
With the first cut in US interest rates since 2020 fully priced in, markets are focused on the scale of the central bank’s move on Wednesday evening.
Richard Hunter, head of markets at Interactive Investor, said: “The current economic data does not necessarily point to anything beyond a 0.25% cut, but traders are now pricing in an equal likelihood of a more aggressive 0.5% move.
“The dial has moved slightly in anticipation that the Fed could make a statement move as it begins its easing cycle, and such an outcome would certainly allay any concerns of the central bank having fallen behind the curve.
“Whatever the outcome, the market is still pricing in 1% of cuts in total by the end of this year, which could take some of the sting from Wednesday’s announcement.”
Phoenix lower in FTSE 100, Playtech upgrade boosts FTSE 250 shares
08:38 , Graeme Evans
The FTSE 100 index is 8.73 points lower at 8264.36, with Phoenix Group down 2% following half-year results by the savings and retirement business.
Having risen by more than 15% since April, shares reversed 13.5p to 563p as Phoenix announced a 2.5% hike in dividend to 26.65p a share and said it no longer intended to sell SunLife.
Other blue-chip fallers included Melrose Industries, which dropped 8.6p to 470.9p after Deutsche Bank lowered its price target on the GKN Aerospace business to 560p.
The retail sector fared well as Sainsbury’s rose 3.4p to 293.2p and Marks & Spencer lifted 2.6p to 353.8p.
In the FTSE 250 index, Playtech jumped 8% or 55p to a fresh two-year high of 709p as the provider of technology and other services to the online gambling industry nudged up full-year earnings guidance.
Takeover interest meant TI Fluid Systems topped the FTSE 250 risers board. Having recently rejected a 176p-a-share takeover approach by ABC Technologies, the company’s shares rose 21.2p to 167p.
In the FTSE All-Share, TT Electronics slumped 36% or 51p to 91p after its profits warning caused by the impact of operational issues in North America.
Phoenix Group ends SunLife sale process
07:53 , Graeme Evans
Savings and retirement business Phoenix is no longer considering the sale of SunLife, a provider of financial protection products to the over 50s market.
Announcing half-year results, it said: “Given the current uncertainty in the protection market, the board has decided to discontinue the sale process and will focus on enhancing the value it generates within the group.”
FTSE 100-listed Phoenix, which today reported a 19% increase in operating cash generation to £647 million, said SunLife was a valuable asset which contributes to the group's new business growth.
The group, whose other brands include Standard Life and Phoenix Life announced the sale process in June, having received a number of initial expressions of interest from third parties.
Close Brothers CEO to take leave of absence
07:46 , Michael Hunter
Close Brothers, the City merchant bank, said this morning that its chief executive is taking a leave of absence from the FTSE 250 company.
Adrian Sainsbury has taken the “temporary” move for medical reasons. He was appointed to the top job in September 2020, having run the £941-million firm’s banking division for four years.
Close Brothers said it “has put in place robust temporary cover arrangements”.
It said that Mike Morgan, group finance director, will assume Sainsbury’s “principal responsibilities” supported by the chairman, Mike Biggs, and “members of the senior management team”.
Its annual results are due on Thursday.
TT Electronics warns over North American trading
07:37 , Graeme Evans
TT Electronics has downgraded results expectations after it encountered operational efficiency issues at two North American sites.
The FTSE All-Share company warned that second half revenues will be between £15 million and £20 million lower than previously anticipated.
The impact of the revenue shortfall and higher production costs are expected to impact the North American operating profit by £13 million to £18 million.
It also reported that recent order intake in its North American components business has been for delivery through 2025, not in 2024 as had been expected.
While the rest of the group has performed in line with expectations, adjusted operating profit is now expected to be in the range £37 million and £42 million compared with the City consensus of £55.4 million.
TI Fluid rejects takeover approach
07:24 , Graeme Evans
FTSE 250-listed TI Fluid Systems today said it had rejected a takeover approach worth about £875 million.
The bidder is Canada’s ABC Technologies, a supplier to the global automotive industry that is backed by Apollo Global Management.
TI Fluid said the latest 176p-a-share proposal, which follows one pitched at 165p at the end of August, significantly undervalued the company and its prospects.
The company’s shares closed on Friday at 145.8p.
Markets steady in big week for rate decisions
07:14 , Graeme Evans
A week featuring interest rate decisions on both sides of the Atlantic is set to begin in calm fashion, with the FTSE 100 index seen broadly unchanged.
The Federal Reserve is due to announce a cut in borrowing costs on Wednesday, the day before the Bank of England’s likely no change decision.
The monetary policy outlook and ongoing speculation that the Fed might consider cutting by an aggressive half percentage point has put the US dollar under pressure to leave the pound at $1.3155.
The Dow Jones Industrial Average and Nasdaq Composite rose 0.7% on Friday, just ahead of the 0.5% improvement by the S&P 500 index.
Brent Crude starts the week at $71.72 a barrel, having dipped below $69 last week.