Live Markets: What's on the radar: M&A bonanza with Sky, Randgold, Casino, Drax

Gerry Weber International AG

24/09/2018 07:46

Sept 24 - Welcome to the home for real-time coverage of European equity markets brought to
you by Reuters stocks reporters and anchored today by Helen Reid. Reach her on Messenger to
share your thoughts on market moves: helen.reid.thomsonreuters.com@reuters.net     
 
 
    What's on the radar: M&A bonanza with Sky, Randgold, Casino, Drax (0643 GMT)
    European stocks were set to fall on Monday after U.S.-China tariffs came into force and
China was reported to have cancelled trade talks with the U.S., driving investors away from
risky assets as fears of a protracted and costly trade war resurged. Futures for the main
European benchmarks were trading down 0.2 to 0.4 percent. 
    Dealmaking was front and centre for European markets. A  months-long bidding battle for
Europe’s biggest pay-TV company, Sky, ended when the company accepted the “superior cash offer”
from Comcast in an auction. 
    Randgold Resources agreed the terms of a  share-for-share merger with Canada’s Barrick Gold
that will create the world’s leading gold miner. 
    Shares in French retailer Casino were indicated down 2 percent after it said it rejected an
approach from Carrefour. Carrefour, however, denied having ever solicited Casino.
    In other deal talks, Britain’s Drax Group said on Friday after the close that it was in
talks to buy power assets from Iberdrola. Its shares were seen falling 1 percent.
    In results, Britain’s Thomas Cook was indicated down 10 to 15 percent after it slashed its
2018 profit outlook by about 13 percent, blaming this summer’s heatwave in northern Europe for
more discounting and tougher competition in the later part of the holiday season.
    German retailer Gerry Weber could also fall 10 percent after it said it instructed an
independent expert to prepare a restructuring opinion. Traders also pointed to the retailer
calling full-year sales targets “ambitious”. The news comes just after similar disappointments
from Tom Tailor and Zalando, painting a bleak picture of German retail.
    And Tullow Oil could also lose 3 percent after it said it would plug and abandon a well
offshore Namibia after its exploration found “non-commercial hydrocarbons”, with net expenditure
on the well $5 million. 
    Randgold Resources agrees merger terms with Canada's Barrick Gold  urn:newsml:reuters.com:*:nL4N1WA2BC
    Thomas Cook cuts profit guidance after hot summer  urn:newsml:reuters.com:*:nFWN1W70WN
    Tullow Says Well Offshore Namibia Encountered Non-Commercial Hydrocarbons  urn:newsml:reuters.com:*:nFWN1WA039
    (Helen Reid) 
    *****
    
    UK PARTY CONFERENCES, FED, ITALIAN BUDGET TO KEEP TRADERS ON THEIR TOES (0539 GMT)
    "This week the UK Labour Party conference (started yesterday) and the Conservative Party
conference (starting next Sunday) along with the FOMC meeting and the Italian 2019 budget will
steal the headlines," write Societe Generale analysts. 
    The widely expected rate hike by the Fed on Wednesday shouldn't rock markets - rather a
formal budget announcement by Italy on Thursday "will steal the show", they reckon, in the
run-up to a BTP auction the same day. 
    "There has been a lot of noise in terms of headlines / positioning for a mild deficit
number, to the point that BTPs have become relatively immune," the SocGen team observes.
"Overall we still like shorts in BTPs, in great part because of the recent rally in BTPs."
    The budget bill in France today will also be watched. Analysts say it will likely set the
2019 budget deficit target at 2.8% of GDP - up from 2018.
    (Helen Reid)
    *****
    
    EARLY MORNING HEADLINE ROUND-UP: DEALS IN FOCUS (0532 GMT)
    There's quite a lot of dealmaking news likely to move stocks this morning, with Drax Group
saying it's in talks to buy power assets from Iberdrola, Casino saying it rejected an approach
from Carrefour, and Gold in late talks to buy Randgold Resources. 
    Here are the morning's headlines so far:
    Britain's Drax Group says in talks to buy power assets from Iberdrola  urn:newsml:reuters.com:*:nL8N1W80VW
    Retailer Casino says it rejected Carrefour approach; Carrefour also denies  urn:newsml:reuters.com:*:nL8N1WA0CP
    Barrick Gold is in late-stage talks to buy Randgold Resources -source  urn:newsml:reuters.com:*:nL2N1W90A9
    Equinor to open offices in Tokyo, India to expand Asian presence  urn:newsml:reuters.com:*:nL4N1WA1SE
    Britain's Labour to vote on keeping second Brexit referendum on table  urn:newsml:reuters.com:*:nL8N1W911B
    AstraZeneca ceo warns of medicine shortages after Brexit - Sunday Times  urn:newsml:reuters.com:*:nL8N1W80WM
    Bank of Italy head says higher deficit spending without growth could put debt on
unsustainable course  urn:newsml:reuters.com:*:nS8N1PA07H
    (Helen Reid)
    *****
    
    FEARS OF A PROTRACTED TRADE WAR TO TAKE EUROPEAN SHARES DOWN A NOTCH (0511 GMT)   
    European shares are set to gap lower this morning after weaker trading in Asia as tariffs
came into force and China was reported to have cancelled upcoming trade talks.
    Asian shares stumbled in holiday-thinned trading as China's decision to cancel talks with
the United States reinforced fears of a protracted trade war with neither side willing to back
down.  urn:newsml:reuters.com:*:nL4N1WA1Z7
    China cancelled upcoming trade talks with the U.S. and will not send vice-premier Liu He to
Washington next week, the Wall Street Journal reported on Saturday, citing sources. 
    And tariffs from both sides on each other's goods came into force at 0401 GMT as the world's
biggest economies showed no signs of backing down from an increasingly bitter trade dispute.
 urn:newsml:reuters.com:*:nL4N1WA1OF
    Spreadbetters expect London's FTSE to open 31 points lower at 7,459, Frankfurt's DAX to open
51 points lower at 12,379 and Paris' CAC to open 18 points lower at 5,476, according to London
Capital Group.
    (Helen Reid)
    *****

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 (Reporting by Helen Reid, Danilo Masoni, Julien Ponthus)
 ((+442075420402; helen.reid@thomsonreuters.com; Twitter: @helenmariareid))