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Marlboro maker goes hostile in £1bn battle for inhaler maker Vectura
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Blow to Oxford Nanopore after ministers end Covid testing contract early
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FTSE 100 falls 0.4pc, pound flat against the dollar
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Gates and Bezos fund invests in Aim-listed rare earth miner
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Andrew Orlowski: Learning to code is no longer fit for purpose
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A battle between Big Tobacco and private equity over Vectura has intensified after the maker of Marlboro cigarettes launched a £1bn hostile bid for the Cotswolds asthma drugmaker.
The 165p per share offer by Philip Morris International (PMI), the world’s biggest cigarette company, trumps a 155p-a-share bid by Carlyle just 48 hours earlier.
On Monday, Britain's Takeover Panel said the takeover rivals will go head-to-head in a rare auction if they do not make their final bids by Tuesday aat 5pm.
All parties have agreed to the terms, which state the auction will last until August 17 at the latest, or until the day neither company makes a revised offer. The bids must be made in cash.
11:45 AMBoost for levelling up as wind turbine makers announce £280m investments worth in Hull
Global offshore wind turbine developers are investing a further £264m in manufacturing facilities in the Humber region, in a boost to the area from the drive to go green, reports Rachel Millard.
Siemens Gamesa plans to invest £186m to double the size of a blade factory near Hull which will be able to build blades longer than 100m, while GRI Renewables will invest £78m in a plant at the Able Marine Energy Park being developed on the south side of the River Humber.
The two Spanish companies are both set to receive grant funding from a £160m UK Government pot to support offshore wind, although details of how much each will get have yet to be finalised.
Siemens' investment is set to add 200 jobs to its 1,000-strong workforce at the site, while GRI said its plans will create 300 jobs.
It comes after GE Renewable Energy confirmed plans to build a new offshore wind turbine blade factory at the Teesworks industrial site in North Yorkshire.
Story continues
Siemens has produced more than 1,500 offshore wind turbines in Hull since 2016, serving customers around the world as well as wind farms in the North Sea.
The Government wants to quadruple the UK's offshore wind capacity to 40GW by 2030 to help slash carbon emissions.
Marc Becker, chief executive of the Siemens Gamesa Offshore Business Unit, said: "The rapid development of the offshore wind industry – and continued, strong, long-term support provided by the UK government for offshore wind – has enabled us to power ahead with confidence when making these plans.
"We’re committed to unlocking the potential of wind energy around the globe, with solutions from Hull playing a vital role."
This content is not available due to your privacy preferences.Update your settings here to see it.11:08 AMRivals in Vectura takeover battle could go head-to-head in auction
Rivals in the takeover battle for British asthma group Vectura, Marlboro maker Philip Morris and private-equity firm Carlyle, will go head-to-head in a rare auction if they do not make their final bids by tomorrow.
The procedure kicks off on Tuesday at 5pm UK time, according to the Takeover Panel, which made the announcement after both suitors raised their bids for Vectura within days of one another.
All parties have agreed to the terms, which state the auction will last until August 17 at the latest, or until the day neither company makes a revised offer. The bids must be made in cash.
The maker of Marlboro cigarettes on Sunday offered 165p per share for Vectura, following Carlyle’s Friday bid of 155p. Vectura jumped as much as 5.2pc to 172.49p in London on Monday.
Read more on this story here.
10:46 AMCompetition watchdog to investigate Covid test cost
Britain's competition watchdog is investigating the cost of coronavirus tests, after Health Secretary Sajid Javid asked the regulator to help curb any “exploitative behaviour” in the sector.
The Competition and Markets Authority said it was aware of concerns about the “evolving markets” for the tests and would issue advice to the government on how to ensure they are “affordable and reliable.”
Critics have warned that regulation covering PCR (polymerase chain reaction) tests is far too lax with test kits advertised on the government website ranging from £23.99 to £575.
“For too many people the cost of PCR testing can act as a barrier, especially for families who want to travel together,” Javid said in a letter to the CMA.
10:22 AMDelivery Hero comments on Deliveroo stake
Shares of food delivery app Deliveroo have surged 8pc in early trading, after the company said German rival Delivery Hero had taken a 5pc stake.
Berlin-based Delivery Hero now owns 87.4m of Deliveroo's shares, worth £284.1m based on Deliveroo's Friday closing price.
Delivery Hero is one of the largest food delivery companies, worth €33bn. It has previously said it could attempt to enter the UK market via an acquisition.
The German company commented:
We can confirm that Delivery Hero has taken a 5.09pc stake in Deliveroo. Delivery Hero is always looking for new investment opportunities.
We strongly believe in the future potential of the delivery industry as a whole, and therefore decided to purchase shares in one of the companies that is at its forefront.
10:09 AMSSE leads gains on FTSE 100 amid takeover speculation
Energy firm SSE is leading gains on the FTSE 100 today after reports that activist investor Elliot Management had built up a large stake in the company, raising speculation it could be a potential takeover target.
The Mail on Sunday reported that Elliot's stake could mean a possible takeover bid of around £20bn.
Elliot Management has a reputation for buying large holdings in corporations to force change. In 2018, Elliot pushed Whitbread to sell off its Costa Coffee business three years ago. Costa was eventually sold to Coca-Cola for just under £4bn.
Any corporate pressure on SSE could be of interest to one of Europe’s power giants, such as France's EDF or Spain’s Iberdrola, according to the Mail.
SSE shares are currently up 3.4pc at £15.99.
09:56 AMGold recovers after flash crash
Gold recovered most of its losses from a sharp plunge at the start of Asian trading, but remains under pressure as bets mount that the US Federal Reserve may soon start paring back its massive monetary stimulus.
Dallas Fed President Robert Kaplan’s comments that the central bank should start tapering its asset purchases sooner rather than later further fanned concerns that stimulus will be reined in.
Spot bullion fell more than 4pc early Monday, dropping $60 in minutes, as the selloff following Friday’s better-than-expected US employment data accelerated at the start of trading. A close at current levels would be the lowest since April.
Gold likely crashed lower after breaching a technical support level and triggering stop losses, all on a day when liquidity was low due to holidays in Japan and Singapore, said Marcus Garvey, head of metals strategy at Macquarie Group.
Bullion was down 1.1pc at $1,743.1 an ounce, after earlier touching its lowest since March, and coming close to its lowest in more than a year.
09:39 AMRenault and Geely to join forces
Renault is joining forces Chinese automotive giant Geely to sell hybrid vehicles as the French company tries to re-establish in the world’s largest car market, reports my colleague Alan Tovey.
The companies will sell Renault-branded hybrid vehicles in China, and the deal also targets other fast-growing South-East Asian markets.
Introducing cars in South Korea based Geely’s Lynk & Co vehicle platforms is being considered, taking advantage of Renault’s long-term relationship with local technology company Samsung in the country.
Renault abandoned a partnership with Chinese manufacturer Dongfeng last year after several years of losses.
However, the French company cannot ignore the Chinese market, where almost 20m vehicles were sold last year, making it a third larger than the next biggest market, the US.
The tie-up will allow Renault and Geely, which owns brands including Volvo and Lotus, to share resources and technology, cutting development costs of vehicles and helping generate savings through economies of scale.
09:26 AMOcado to let staff work from overseas
Ocado have told staff they can work from anywhere in the world for one month a year, according to The Times.
Claire Ainscough, chief people office, said the request had been a "top question" from staff, especially from people who had family abroad.
The incentive had been introduced "because we feel we could give our employees a balance and choice," said Ainscough, who added staff were still encouraged to return to the office to increase opportunities to collaborate.
Ocado's chief executive, Tim Steiner, spent large parts of the pandemic working from his parents' house in the Bahamas,
09:07 AMSouthend Airport owner 'agnostic' about RyanAir withdrawal
The company behind Southend Airport has said it is "agnostic" about Ryanair's withdrawal from the site, even though it will leave the airport without any passenger planes.
Esken said that the impact on its earnings and cash headroom would be "negligible" after Ryanair pulls out on November 1 and that it expected a"limited flying in the winter season" anyway.
However investors met the news with pessimism and shares in the company dipped by more than 4.4pc on Monday morning.
It is just under a year since rival budget airline easyJet also pulled out of Southend airport, meaning the airport is now left without any passenger flights.
David Shearer, executive chairman of Esken said:
The terms of the deal which had been entered into with Ryanair in 2018 were based on a significantly different set of market and economic parameters to the present day."
We are therefore commercially agnostic to this decision and will look to build sustainable and profitable passenger growth for LSA (London Southend Airport) with a range of other carriers as demand recovers into a post pandemic world.
Esken recently agreed a deal with US private equity company Carlyle which will bring £125m for the company.
08:51 AMPageGroup revenues rise
Half year revenues at British recruitment firm PageGroup surged to £766.4m, up from £655m in the same period last year.
The company also announced an interim dividend of 4.70p per share.
However chief executive Steve Ingham said:
Looking ahead, there continues to be a high degree of global macro-economic uncertainty as COVID-19 remains a significant issue and restrictions continue in a number of the Group's markets. Additionally, at this stage of the recovery, it is not clear whether the improved performance is still the result of pent-up supply and demand, or a sustainable trend
Shares sank 4pc in its early trading, down to 597.5p per share.
08:32 AMExpert reaction: FTSE 100 edges 0.3pc lower
AJ Bell financial analyst Danni Hewson, comments:
The FTSE 100 dipped modestly on Monday after weak Chinese trade figures and with few other company or economic updates to funnel sentiment in any particular direction.
Much of the action centred on the M&A arena. Tobacco giant Philip Morris launched a hostile takeover bid of more than £1bn for inhaler specialist Vectura, a US private equity firm planted the seeds for a bidding war on supermarket Morrisons with a request for extra time to make an offer and a German rival took a stake in takeaways platform Deliveroo.
The continuing global corporate raid on UK plc suggests overseas parties still see significant untapped value in the London stock market.
08:24 AMMoney round-up
Here are the best stories from The Telegraph's Money team:
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Mortgage war heats up as Halifax offers 0.83pc rate to first-time buyers: It is the second week in a row that Halifax has lowered its mortgage rates
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'I'm 29 and have £23k. How quickly can I buy my first home?' Jordan Gascoyne has been saving during lockdown but does he have enough to buy a house without any help?
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Can I force my neighbours to get rid of their chicken coop? Ask a Lawyer: if neighbours break covenants linked to the land, there are routes to take to ensure they follow the rules
08:03 AMBrent falls 3pc, extending losses
Brent has dropped 3pc this morning to $68.47, as oil prices extend last week's declines on concerns about global demand amid the spread of the highly contagious delta virus variant.
The virus resurgence has led Goldman Sachs Group Inc. to downgrade its economic growth forecast for China, which recently completed a mass testing program on 11.3m people in Wuhan following new confirmed cases.
In the US, new infection numbers have spiked to more than 100,000 a day on average, returning to the levels of the winter surge six months ago. Dollar strength has also weakened the appeal of raw materials such as oil and gold.
The reintroduction of restrictions on movement in some regions has coincided with a production boost from OPEC+ which is exacerbating concern. The alliance will make monthly supply hikes of 400,000 barrels a day from August and continue until all of its output halted during the pandemic is revived.
While the latest Covid-19 flare-up is clouding the outlook, expectations are that the market will be able to absorb the additional barrels as demand accelerates.
“Oil appears to be caught up in broader market moves across the commodity complex,” Daniel Hynes, senior commodities strategist at Australia and New Zealand Banking Group, told Bloomberg.
“Indicators suggest demand is still robust in major markets such as U.S. and Europe, and I can’t see this sell-off continuing for too much longer if that remains the case.”
Futures in New York also fell below $67 a barrel after sliding almost 8pc last week.
07:44 AMDeliveroo shares surge
Shares of food delivery app Deliveroo have surged 5.9pc in early trading, after the company said German rival Delivery Hero had taken a 5pc stake.
07:28 AMFTSE risers and fallers
Energy and mining stocks are also weighing on the FTSE 100 this morning, as concerns about commodity demand returned due to a rise in coronavirus infections.
The blue-chip FTSE 100 has slipped 0.2pc with BP, Anglo American, Glencore and Royal Dutch Shell among the top drags.
The domestically focused FTSE 250 index fell 0.3pc.
Among the mid-caps, Vecture gained 2.8pc after tobacco company Philip Morris raised its bid for the drugmaker to 165p ($2.29) per share.
Deliveroo jumped 3.5pc after its German rival Delivery Hero took a 5.09pc stake in the British food delivery company.
Recruiter PageGroup dropped 2pc to the bottom of the mid-cap index even after it said it would spend £100m on shareholder returns as trading conditions improved in the first half.
07:23 AMHargreaves shares slide
Despite the lift in profits, Hargreaves shares have already dropped 8.6pc this morning, as investors focused on the lower dividend and chief executive Chris Hill's comments that the company does not expect the "exceptional" volume of trading to remain at such high levels.
The company warned: "The impact of COVID on individuals, businesses and the economy still provides an uncertain backdrop to the current year."
"As we have eased out of lockdown and entered the summer months, we have seen a slowdown in dealing volumes and client activity versus the elevated levels this time last year, which is also normal for this time of year and in line with management expectations."
07:17 AMRetail trading frenzy boosts Hargreaves profits
The lockdown retail trading frenzy has boosted investment platform Hargreaves Lansdown to pre-tax profits of £366m over the 12 months to June, compared to £339.5m the year earlier.
The FTSE 100 company said that equity trading volumes surged 54pc, with 83pc of new clients under 55.
"If the biggest trend has been the change in demand for online service, the second biggest trend has been in the demographic mix," chief executive Chris Hill said.
The company raised its divided per share by 3pc to 38.5p. However total dividend was down 8pc to 50.5p compared to last year.
07:04 AMFTSE 100 slips
The FTSE 100 has slipped 0.2pc on opening to 7,106.50 points.
The FTSE 250 has also dipped 0.3pc to 23,393.86.
07:03 AMProfit surges at Saudi Aramco
Saudi Aramco echoed its Big Oil rivals' surging earnings, reporting net income of 95.5bn riyals (£18.4bn) in the second quarter, the highest level since the end of 2018.
Free cash flow rose to $22.6bn (£16.3bn), above the state-controlled firm’s quarterly dividend of $18.8bn (£13.5bn) for the first time since the start of the pandemic.
Aramco’s annual dividend of $75bn (£54bn), the world’s largest, is a crucial source of funding for Saudi Arabia. The government, which owns 98pc of the company, is trying to narrow a budget deficit that ballooned last year as energy prices tanked with the spread of the virus.
The reopening of major economies has triggered a surge in commodity prices, with crude up around 40pc this year. In the past two weeks, oil companies such as BP, Chevron. and Royal Dutch Shell said they will increase share buybacks and payouts, confident the worst of the pandemic is over.
The results “reflect a strong rebound in worldwide energy demand and we are heading into the second half of 2021 more resilient and more flexible, as the global recovery gains momentum,” chief executive Amin Nasser said in a statement on Sunday. “I remain extremely positive about the second half of 2021 and beyond.”
Still, the pandemic is “clearly far from over,” Nasser said later on a call with reporters. Oil just had its worst week since October as the spread of the delta variant, especially in China, clouds the short-term outlook. Brent crude fell 7pc to $70.70 a barrel.
Global oil demand remains below pre-Covid levels, but should reach a near-record high of 100m barrels a day next year, Nasser said.
06:52 AMChina's imports and exports slow
In July, China's export growth slowed and imports also lost momentum, indicating a slowdown after the country's initial economic rebound from the coronavirus.
Exports rose 19.3pc in July from a year earlier, a sharp slowdown compared to the 32.2pc gain in June. Imports in July rose 28.1pc compared to 36.7pc growth in the previous month.
The spread of the highly infectious delta variant of the coronavirus has prompted local authorities across China to impose new lockdowns and shutter some factories, including in main export hubs in the eastern and southern provinces.
In a report released late yesterday, Goldman Sachs downgraded its economic growth forecast for China, with economists cutting their projection for quarter-on-quarter growth of gross domestic product in the third quarter and also lowered their full-year GDP growth forecast to 8.3pc from 8.6pc.
The prediction assumes the government will bring the outbreak under control in about a month, and follows the downgrade by Nomura Holdings earlier this month.
06:40 AMTakeover Panel extends Morrisons bid battle
Takeover regulators have extended the battle for supermarket Morrisons by a further two weeks, giving a US suitor more time to make a bid.
Clayton, Dubilier & Rice will have until 5pm on August 20 to either say what it wants to offer for Morrisons, or to walk away.
CD&R had originally been turned down by the Morrisons board over a potential £5.5bn bid.
In June the board said the offer "significantly undervalued Morrisons and its future prospects".
Since then CD&R has been pondering whether it should increase its bid for the supermarket chain.
In this time it has been overtaken by a rival consortium led by private equity company Fortress.
Last month Morrisons' board recommended Fortress's £6.3bn bid for the company.
On Friday that offer was increased to £6.7bn as Fortress tried to put CD&R off from making another offer.
CD&R originally had until 5pm on Monday to make a firm offer for Morrisons, or to walk away from the supermarket.
However, the Takeover Panel, which regulates acquisitions of listed companies, has now said it will give the US firm until 5pm on August 20 to make its bid.
06:24 AMFTSE 100 to slip after China trade slows
Good morning. The FTSE 100 is set to open lower today, losing around 0.37pc after posting its best weekly gain since June last week. Asian stocks climbed higher overnight but suffered a wobble over sharp drops in gold and oil prices and weak China trade data. Meanwhile Europe is due to slip when trading begins this morning as traders brace for slowing German trade numbers.
Investors appear to be concerned that China's trade slowdown, possibly followed by one in Germany, could show the delta variant outbreak is interrupting the global recovery.
"While we’ve seen a degree of optimism return to the US labour market and the US economy, concerns are rising over the Chinese economy which has been showing some worrying signs of weakness in recent weeks, amidst reports of increasing outbreaks of delta variant cases which are reportedly prompting lockdowns across various parts of the country," Michael Hewson, of CMC Markets, said.
5 things to start your day
1) Marlboro maker goes hostile in battle for Vectura: Philip Morris International raises its offer to 165p a share for Vectura after private equity firm Carlyle increased its bid to 155p on Friday.
2) Timeline for EDF decision on £20bn Sizewell C slips: Energy giant now due to make a final decision at the end of 2022 at the earliest amid questions over funding.
3) Blow to Oxford Nanopore after ministers end Covid contract: Vaccine rollout ends need for biotech firm's tests, deemed a 'life-saving innovation' by former health secretary Matt Hancock.
4) Workers ignore Chancellor's 'back to the office' call: Fresh data reveals no rush to return to workplaces despite lifting of work from home advice when restrictions ended on July 19.
5) Amigo drafts in advisers to wind lender down: Specialists from PJT Partners have been appointed if the sub-prime lender is unable to resume operations.
What happened overnight
Asian shares wobbled on Monday amid sharp losses in gold and oil prices, while the dollar reached four-month highs on the euro after an upbeat US jobs report lifted bond yields.
Sentiment was shaken by a sudden dive in gold as a break of $1,750 triggered stop loss sales to take it as low as $1,684 an ounce. It was last down 1.4pc at $1,738.
Brent also sank 2pc on concerns the spread of the delta variant would temper travel demand.
Holidays in Tokyo and Singapore made for thin trading conditions, leaving MSCI's broadest index of Asia-Pacific shares outside Japan down 0.5pc.
Japan's Nikkei was shut but futures were trading 100 points below Friday's close. Nasdaq futures slipped 0.4pc and S&P 500 futures 0.3pc.
Chinese trade data out over the weekend undershot forecasts, while figures out Monday showed inflation slowed to one per cent in July offering no barrier to more policy stimulus.
China's blue chips index were a fraction firmer.
Coming up today
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Corporate: Hargreaves Lansdown (Full-year); Clarkson, TI Fluid Systems, PageGroup, H&T Group (Interims)
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Economics: BRC retail sales (UK), trade balance (Germany), consumer price index (China)