LONDON MARKET OPEN: Entertainment One Surges On Hasbro Deal

(Alliance News) - Stocks in London opened higher on Friday, with the FTSE 100 taking back ...

Alliance News 23 August, 2019 | 8:56AM
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(Alliance News) - Stocks in London opened higher on Friday, with the FTSE 100 taking back Thursday's losses amid weakness in the pound.

On the corporate front, shares in Entertainment One rose after US firm Habro agreed to acquire the movie and television content producer.

The FTSE 100 was up 41.05 points, or 0.6%, at 7,169.23. The FTSE 250 was up 133.072 points, or 0.7%, at 19,339.04 and the AIM All-Share was up 0.2% at 870.90.

The Cboe UK 100 index was up 0.3% at 12,139.55. The Cboe UK 250 was up 0.2% at 17,095.37 and the Cboe UK Small Companies was flat at 10,90.830.

Spreadex analyst Connor Campbell said: "Perhaps concerned that yesterday's surge was a tad overdone – after all, all Macron and Merkel did was make positive noise about a deal; nothing more substantial than that was announced. And while, yes, it still means the currency has had a decent couple of weeks, in the wider context of the last few months it remains deeply troubled.

"Thanks to a combination of a broader market rebound, and the pound's early retreat, the FTSE 100 managed [rise] after the bell, pushing back towards 7,170 but so far missing out on the week's 7,200-plus highs."

The pound was USD1.2215 early Friday, down from USD1.2250 at the London equities close Thursday.

In mainland Europe, the CAC 40 in Paris and the DAX 30 in Frankfurt were 0.4% and 0.5% higher respectively in opening trade.

In the FTSE 100, NMC Health, once again, was the best performer at the open, up 3.0% extending gains from Thursday, after the private healthcare company was reported to have become the target of interest from Chinese bidders. The stock closed up 19% on Thursday.

In the FTSE 250, Entertainment One was the star performer, up 29% after US toy and board games maker Hasbro agreed to acquire the Peppa Pig children's TV show owner for GBP3.3 billion in cash.

Under the terms of the agreement, Entertainment One shareholders will receive GBP5.60 in cash for each share, which represents a 31% premium to the company's 30-day volume weighted average price as of Thursday. Entertainment One shares closed 1.0% higher in London on Thursday at 442.62 pence each.

The board of directors of Entertainment One has recommended shareholders vote in favour of the deal. The transaction is expected to close during the fourth quarter of 2019.

Computacenter was up 2.5% after the IT services provider reiterated its recently-upgraded guidance for 2019 despite a marginal reduction in profit in first half.

The group reported a 2.3% decline in pretax profit for the six months to the end of June to GBP50.8 million from GBP52.0 million a year earlier, despite revenue jumping by 21% to GBP2.43 billion from GBP2.00 billion. On a constant currency basis, revenue increased by 22%.

Computacenter declared an interim dividend of 10.1 pence, up 16% from 8.7p paid the year prior.

At the other end of the midcap index, Woodford Patient Capital Trust was the worst performer, down 10% after the trust said Link Fund Solutions, which values the portfolio of the trust, will reduce the valuation of its holding in IH Holdings International.

The valuation adjustment reflects a reassessment of the current progress of the business, and is expected to hit the trust's net asset value per share by 3.4p per share.

On AIM, Eddie Stobart Logistics said Chief Executive Alex Laffey is stepping down immediately and the company's shares have been temporarily suspended.

The Japanese Nikkei 225 index closed up 0.4%. In China, the Shanghai Composite closed up 0.3%, while the Hang Seng index in Hong Kong is up 0.5%.

The economic events calendar has US new home sales data at 1500 BST.

By Arvind Bhunjun; arvindbhunjun@alliancenews.com

Copyright 2019 Alliance News Limited. All Rights Reserved.

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Securities Mentioned in Article

Security Name Price Change (%) Morningstar
Rating
Woodford Patient Capital Trust 33.64 GBX 1.46
NMC Health PLC 1,498.00 GBX -3.82 -
Entertainment One Ltd
Eddie Stobart Logistics PLC 71.00 GBX -0.70 -

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