City sources predict FTSE 100 will open up 50 points from yesterday’s close of 5,140.
Stock to watch
After years of rumour and speculation, one of the market's most widely tipped takeovers is about to come to fruition after condom and footcare group SSL agreed an all-cash bid from Reckitt Benckiser. Reckitt is to pay SSL shareholders 1,163p per share with a final dividend taking the total up to 1,171p per share. The bid values SSL in total at Ł2.54bn. The offer price is a premium of a third to the closing price yesterday of SSL, which is best known for its Durex and Scholl brands.
Ocado has slashed the price at which shares grocery delivery group will be floated following widespread criticism of its initial flotation plans. Shares in the company, which delivers groceries from the supermarket Waitrose, will be floated at 180p, which is at the bottom end of the 180p to 200p range Ocado outlined yesterday. It had previously indicated a price range of 200p to 275p. Analysts had lined up to criticise Ocado’s plans to value itself at between Ł800m and Ł1.2bn.
Embattled oil giant BP has done a deal to sell $7bn of upstream assets in the United States, Canada and Egypt to Apache Corporation. Assets include its Permian Basin assets in Texas and south-east New Mexico, its Western Canadian upstream gas assets, and the Western Desert business concessions and East Badr El-din exploration concession in Egypt. BP said the sales are part of its plan, announced last month, to raise $10bn by offloading non-core assets to cover claims made following the Deepwater Horizon disaster in the Gulf of Mexico.
In the Press
Tony Hayward is to step down as BP’s chief executive within the next ten weeks as the company seeks to draw a line under its disastrous oil spill in the Gulf of Mexico. Sources close to BP, which is battling to restore its reputation and stave off a takeover, told The Times that there was a growing expectation that Mr Hayward, 53, would announce his departure in late August or September. Assuming the ruptured Macondo well has been permanently sealed by then, his exit is expected before October 1. It could be linked to an announcement on a new strategy being crafted for the group, dubbed Future BP, the Times reports.
EasyJet founder Sir Stelios HajiIoannou has raised hostilities with the budget airline to a new level by threatening to withdraw its right to use the brand. Lawyers for easyGroup, Sir Stelios’s private holding company, which owns the “easy” brand and licences it, have written to easyJet threatening to withdraw its permission to use the name unless the company improves its performance by October 17, the Times reports.
BAE Systems, Britain's biggest defence company, is expected to announce an order from India for Hawk trainer aircraft worth around Ł500m in the coming weeks. Negotiations for the contract for between 50 and 60 aircraft are well advanced, and an announcement could come in the next fortnight. BAE declined to comment on the expected deal, other than to say it was "confident that the company will get a contract soon," the Telegraph reports.
Newspaper tips
Severn Trent’s forecast multiple of 15.5 times forecast 2011 earnings, before exceptional items, is actually looking rather expensive, but the 5% prospective yield is rock solid. Maybe no longer a buy, these shares should be seen as a core part of anyone's portfolio. Hold says the Independent.
Ten years after the technology bubble burst, there aren’t many internet start-ups from that era around. One of the few that have survived and prospered is domain name management company Group NBT. Founded in 1995, the group provides domain names and internet-related services to major corporations. The shares are trading on a June 2011 earnings multiple of 10.9 times, falling to 9.8 in 2012. However, stripping out the cash the group is thought to have in the bank right now, this brings the earnings multiple down to nearer nine times earnings, which looks good value. Buy says the Telegraph.
William Hill’s second half will initially benefit from a bounce from last year’s dismal start to the English Premiership football season. But the pressures on trading remain and with the shares, down 4.3p yesterday at 174.6p, trading on almost ten times full-year earnings, the immediate upside looks limited says the Times. US close
Wall Street rallied near the close with after-hours trading also lifted by much better than forecast numbers from Apple as iPad sales boomed.
The Dow closed 75 points higher at 10,229. Nasdaq added 24 at 2,222 while the S&P 500 gained 12 at 1,083.
Shares in Apple rose by more than 3% after-hours as third quarter sales rose 61% to $15.7bn, while net income rose 78% to $3.25bn. It was its best quarter ever.
Earlier, earnings from Goldman Sachs missed expectations and dragged down other financial stocks. Profit slumped 82% at the Wall Street giant in the second quarter as the bank took a hit from Britain’s bank bonus tax and a fraud settlement with the Securities and Exchange Commission.
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