Yahoo Finance Market report: Imperial dips as deal talk stubbed out
Imperial Brands slipped back towards multi-year lows after Japan Tobacco’s new boss poured cold water on hopes of a mega deal being struck by the two tobacco giants.
City analysts had speculated that a deal merging two of the “big five” tobacco heavyweights was in the offing after JT’s acquisition-hungry chief executive Masamichi Terabatake admitted that he was on the hunt for deals.
Imperial had been mooted as the perfect antidote to JT’s lack of exposure in the US, Middle East and Africa, and the vaping market.
But the new boss scuppered hopes of a tie-up with the Golden Virginia maker after revealing that JT is targeting several deals in South East Asia and undeveloped markets, adding that a mega deal in Europe would be made “almost impossible” by competition laws.
Mr Terabatake added that undeveloped markets were more enticing than a “complicated” acquisition elsewhere, signalling that Imperial is not one of the deals JT has in the works.
Cooling merger talk pushed Imperial down 61p to £30.73 with the tobacco giant’s heavy weighting on the FTSE 100 helping to drag the index to a 30.50-point drop at 7,725.43. The index was put under further pressure by a trio of sharp fallers in Burberry, Informa and Pearson, pushing it lower for a third consecutive day.
Elsewhere, Provident Financial tumbled for a second straight day after analysts warned that the stricken doorstep lender is facing a funding shortfall. After admitting that it expects a £120m loss in its troubled consumer credit business, analysts at Liberum crunching the numbers found that Provident could face a £235m shortfall by the end of 2019.
Provident’s value nosedived 68pc last year after a botched revamp of the division saw customers desert the firm and Shore Capital believes that selling shares to raise more cash is now becoming “increasingly likely” to help replenish the firm’s resources, sending its shares sliding 105p to 699p.
The NHS crisis could provide a much-needed boost to private healthcare provider Spire, analysts at Jefferies told clients, to lift the Mediclinic takeover target 8.4p to 250p. Problems within the NHS will drive patients to Spire and double-digit growth in its self-pay division is achievable in the next few years, Jefferies argued.
IWG pared an 8.3pc surge late on, finishing just 1.6p higher at 266p, after reports surfaced that it had rejected a second takeover bid at £2.5bn for the office space provider from Brookfield Asset Management.
Lloyd’s of London insurer Beazley gained 19.5p to 527p after telling shareholders that profit will be ahead of expectations despite hurricane season ramping up insurance payouts.
Pharma giant GlaxoSmithKline gave up early gains to finish just 4.2p higher at £13.59 after it unveiled its plan to pull back its operations in Africa as part of chief executive Emma Walmsley’s shake-up. Energy producer Drax climbed 12p to 289.8p after revealing that it will have a fourth converted biomass power plant up and running by the end of the year. Finally, engineering consultancy Ricardo was boosted 49p to 994p, a one-year high, after reporting a 30pc rise in orders.
