Following a tough day of trading yesterday with worries over the direction of US interest rates, UK stock markets rebounded in early trade on Friday.
The UK’s leading FTSE 100 index is up 0.65%, or 46.55 points, to 7,174.71.
While the FTSE 250, considered more representative of the UK economy, is up 0.9%, or 173.25 points, to 19,378.45 having been fuelled by a takeover bid for one of its constituents.
CONTENT BATTLES HEAT UP
The big news of the day comes from the FTSE 250 where films, TV and toys business Entertainment One (ETO) confirmed it has agreed a £3.3bn deal to be acquired by US toy maker Hasbro.
Under the all-cash transaction, shareholders in Peppa Pig owner Entertainment One will receive 560p for each common share, a significant premium to yesterday’s closing price of 443.4p.
The firm’s shares soared 28.8% to 571p this morning.
On the back of the bid for Entertainment One, ITV (ITV) rose 3.5% to 118.7p.
Perennially discussed as a takeover target, many in the market believe that a foreign takeover of the British TV giant could soon be on the cards, especially given that the American-based owner of Virgin Media, Liberty Global, is a major shareholder.
Also affected by Hasbro's bid for Entertainment is Character Group (CCT: AIM), which is down over 13% to 455p.
Character Group makes Peppa Pig toys for Entertainment One, and it seems the market is concerned it will lose this contract if Entertainment One is taken over by toy maker Hasbro.
In the FTSE 100, pharmaceutical giant GlaxoSmithKline (GSK) added 1.2% to £16.96 as it announced positive results from a pivotal study into its drug to treat multiple myeloma, a type of bone marrow cancer.
The drug, belantamab mafodotin, is on track for regulatory submission by the end of 2019.
RECORD-BREAKING PROFITS
Computer services company Computacenter (CCC) rose 2.4% to £14.33 after its chief executive Mike Norris said the firm expects that full year profit growth in 2019 will be ‘the best in the company’s history’.
In its half year results to 30 June, the company reported a 20.8% rise in revenue to around £2.43bn, while adjusted pre-tax profit rose 2.7% to £53.5m, though on a statutory basis its profit declined 2.3% to £50.8m.
Shares in Woodford Patient Capital (WPCT) opened 10.8% down at 39p before recovering somewhat to 41p, still some 6.6% down on yesterday’s closing price, as it revealed the value of its assets have fallen 3.6%.
The cut in overall net asset value of the trust was driven by the downward revision in the value of its holding in IH Holdings International, also known as Industrial Heat.
Aiming to develop cold fusion, Industrial Heat’s potential attracted both Neil Woodford and celebrities like Brad Pitt to pour over $100m into the company.
But the company has been a terrible performer in Woodford’s portfolio, with no public scientific evidence in existence that the technology can ever be realised.
SHOCK BOSS DEPARTURE
Share trading in Eddie Stobart Logistics (ESL: AIM) has been suspended as it announced chief executive Alex Laffey will stand down with immediate effect following a £2m discrepancy in its half year accounts last month.
In a statement, the firm said while revenue should still be broadly in line with guidance, the impact on its adjusted profit is unclear but is likely to be ‘significantly’ lower than anticipated at the time of its half year trading update. As such, the firm also said it is reviewing its dividend policy.
Eddie Stobart's shares last traded hands for 71p.
Alternative fuel company Quadrise Fuels (QFR) gained 12% to 4.94p after it secured £2m of funding, via the first tranche of an issue of convertible securities, and would also launch an open offer of additional new shares.
Cake decorations and ingredients supplier Real Good Food (RGD) softened 0.7% to 6.33p after it announced it had secured an £8.9m credit facility to repay debts owed to its shareholders.
Property investment and development company Henry Boot (BOOT) rose 0.2% to 234.55p, even as it booked a fall in first-half profit owing to lower development activity.
Target Healthcare (THRL:AIM) fell 0.2% to 117p as it acquired two care homes in Ripon, Yorkshire and Stourport, West Midlands, for around £18.6m combined.
XPS Pensions (XPS:AIM) shed 2.5% to 115p, despite its National Pension Trust unit securing authorisation from UK regulators.
