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What to watch: G4S rejects latest GardaWorld offer, Stagecoach profits crash and sterling rises on Brexit deal hopes

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Kumutha Ramanathan
·Contributor
·4-min read
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The G4S company logo. Photo: Igor Golovniov/SOPA Images/LightRocket via Getty
The G4S company logo. Photo: Igor Golovniov/SOPA Images/LightRocket via Getty

Here are the top business, market, and economic stories you should be watching today in the UK, Europe, and around the world.

G4S rejects latest GardaWorld offer

Shares in British Security firm G4S (GFS.L) are up 0.4% on Wednesday after it announced it rejected GardaWorld’s revised offer to acquire the entire issues and to be issued share capital of the former business from 190 pence to 235 pence in cash per share. The news follows G4S’ board accepting a takeover offer from US rival Allied Universal.

“Whilst the Board recognises the increase in the price of the Revised GardaWorld Offer, the Board has unanimously decided to reject it on the basis that it continues to undervalue G4S,” the company said in a statement on Wednesday.

British firms have increasingly become vulnerable in the face of Brexit and a sunken pound. William Hill (WMH.L) and RSA Insurance (RSA.L) have also been taken over by overseas rivals.

G4S agreed to a £3.8bn ($2.78bn) deal worth 245p per share following a highly publicised bidding war with the Canadian company GardaWorld.

Stagecoach profits crash

Stagecoach (SGC.L) shares are soaring in early trading on Wednesday, up 7% at around 9.40am in London.

Despite the strong performance on the FTSE (^FTSE), profit fell to £5.4m for the half-year ended 31 October 2020, down from £65.9m over the same period last year, according to the company’s earnings report published on Wednesday.

“While the [COVID-19] situation remains fluid, we have made progress in the restoration of our networks to close to pre-COVID levels and in growing passenger volumes safely,” said Martin Griffiths, Stagecoach group chief executive.

He added that the business welcomes “the UK, Scottish and Welsh government’s' recognition of the importance of bus and tram services, as evidenced by the sector-specific actions they have taken to support the continuation of vital services during the COVID-19 pandemic.”

Business leaders said they have restored the company’s regional networks and will now focus on ensuring public transport networks are adapted to new working and travel patterns in a post-COVID world.

READ MORE: 'Double threat' COVID-19 and Brexit fails to force UK workers to upskill

Sterling heads higher amid Brexit crunch talks

The pound has been rallying on Wednesday as UK prime minister Boris Johnson heads to Brussels for a meeting with Ursula von der Leyen, president of the EU Council. The last ditch efforts to broker a trade deal with the bloc were somewhat boosted on Tuesday as the UK agreed to withdraw the most controversial parts of its Internal Market Bill that would allow the nation to break international law. Both sides also reached an "agreement in principle" on Brexit divorce issues on Tuesday, according to Cabinet Office Minister Michael Gove.

The pound has been steadily climbing alongside the FTSE (^FTSE), up 0.7% against the dollar (GBPUSD=X) and gained 0.5% against the euro (GBPEUR=X) at around 10am in London.

WATCH: Pound slides as UK warns Brexit talks could collapse

European markets rally as Boris Johnson heads to Brussels and US stimulus hopes grow

European markets had a positive open on Wednesday ahead of UK prime minister Boris Johnson heading to Brussels. Markets also remain optimistic as US lawmakers continue negotiating a new stimulus deal to shore up the economy badly hit by COVID-19 pandemic.

The FTSE (^FTSE) opened up 0.3%. The DAX (^GDAXI) headed higher 0.4% in Frankfurt and CAC 40 (^FCHI) in Paris was boosted 0.5%.

The US enjoyed a strong trading session on Tuesday with the S&P 500 pushing above 3,700. Futures had modest moves, with the S&P (ES=F) up 0.2%. The Dow Jones (YM=F) also gained 0.2% and the Nasdaq (NQ=F) dropped 0.1%.

Japan’s Nikkei (^N225) gained 1.3%, the Hong Kong Hang Seng (^HSI) was up 0.7%, and China’s Shanghai Composite (000001.SS) fell 1.1%. South Korea’s KOSPI (^KS11) gained by 2%.

WATCH: Why is fishing so important in Brexit talks?