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UK WINNERS & LOSERS: Pharmaceutical Companies Jump On M&A News(Alliance News Via Acquire Media NewsEdge) LONDON (Alliance News) - The following stocks are the leading risers and fallers within the main London indices midday Tuesday.-------FTSE 100 - WINNERS-------AstraZeneca, up 7.1%. The pharmaceutical company has jumped after The Sunday Times reported that US giant Pfizer Inc offered to acquire it for USD101 billion. While the report said that no talks are currently underway after AstraZeneca resisted the approach, Pfizer could return with a better offer as it sits on a huge cash hoard in overseas subsidiaries that it could utilize for a major acquisition. Further lifting sentiment, Citigroup has raised its recommendation on the stock to Buy from Neutral.GlaxoSmithKline, up 5.6%. The healthcare giant's shares have jumped sharply after it announced a series of strategic deals with Switzerland's Novartis AG to create an expanded consumer healthcare and vaccines franchise and to exit its oncology portfolio. It said it will acquire Novartis' global vaccines business, excluding influenza vaccines, for an initial cash consideration of USD5.25 billion, with subsequent potential milestone payments of up to USD1.8 billion and ongoing royalties. It will divest its marketed oncology portfolio to Novartis for an aggregate cash consideration of USD16 billion, of which up to USD1.5 billion will be dependent on the results of its COMBI-d trial. As part of the three-part deal, the two companies also will create a new consumer healthcare business with 2013 pro-forma revenues of GBP6.5 billion, with Glaxo having the majority control, with equity interest of 63.5%. At the same time, Glaxo said it will return GBP4 billion to shareholders which will be delivered by means of a B share scheme.Shire, up 4.3%. The pharmaceutical company has been lifted by speculation about mergers and acquisitions within the FTSE 350 pharmaceuticals and biotechnology sector index, prompted by the AstraZeneca and Glaxo news.-------FTSE 100 - LOSERS-------Anglo American, down 0.8%. The mining company is one of just a handful of fallers in the blue-chip index, after the Financial Times reported on Monday that it is preparing the way to exit part of its South African platinum business, after three months of labour strikes in the region. The report said Anglo is in talks with the South African government to try to eventually withdraw from its deep platinum mines at Rustenburg. However, the FT said no decision had yet been taken on how to exit Rustenburg, and Anglo is not in specific talks over the sale, which could turn out to be a lengthy process.Barclays, down 0.4%. Barclays is set to become the next big bank to wind down its commodities trading activities, according to a weekend report from the Financial Times. The newspaper said the move is driven by tighter regulation, fresh capital constrains, and lower profitability. Barclays is one of the top names in commodities trading, but such a move would echo similar decisions taken by the likes of US banks JPMorgan Chase and Morgan Stanley.-------FTSE 250 - WINNERS-------Worldwide Healthcare Trust, up 5.7%. The company, which invests worldwide in pharmaceutical and biotechnology companies and related securities in the healthcare sector, is the biggest gainer in the mid-cap index following big rises in the FTSE 350 pharmaceuticals and biotechnology sector.Hikma Pharmaceuticals, up 4.6%. The firm is another example of a company being buoyed by merger and acquisition speculation involving pharmaceutical companies.Vedanta Resources, up 2.1%. The mining company said the Supreme Court in India has partially lifted the ban on mining in the state of Goa, where its subsidiary Sesa Sterlite Ltd has operations. It said the court has imposed an interim restriction on the maximum annual excavation from the mining leases in Goa of 20 million tonnes, subject to determination of final capacity by an expert committee. The company said the order stated that all mining leases in the state, including those of Sesa Sterlite, expired in 2007, and no mining operations can be carried out until renewal or execution of mining lease deeds by the Goa state government takes place. As such, Vedanta said it is working towards securing the necessary permissions for commencement of operations at the earliest date possible. -------FTSE 250 - LOSERS-------Colt Group, down 12%. The telecommunications company has lowered its forecasts for 2014 earnings before interest, tax, depreciation and amortisation due to compression of its profit margins. It said it now expects its 2014 EBITDA, before restructuring costs, to be between 5% to 10% below current consensus estimates of EUR325 million. It also expects to post restructuring costs of EUR30 million in the second half as it continues to reorganise its operations into four units and announced plans to reduce its Carrier voice business. Its Carrier voice business involves the carrying of voice calls for other telecommunications providers. In the first quarter to end-March, Colt posted revenue of EUR399.8 million, up from EUR392.1 million in the previous year, but EBITDA dropped to EUR74.1 million from EUR80.5 million. Polymetal International, down 1.4%. The gold, silver and copper-mining exploration and production company said revenue fell in its first quarter despite an increase in gold and silver production, as seasonal factors and lower copper production hit the company. It said its revenues fell 2% during the three months ended March 31 to USD336 million, down from USD341 million in the same period the previous year. The company noted a 48% fall in copper production to 709 tonnes from 1,355 tonnes and that there was no copper sold during the period. Despite this, it said its gold production increased 57% to 191,000 ounces from 121,000 ounces, and its silver production increased 14% to 7.3 million ounces from 6.4 million ounces, leading to a 34% increase in gold equivalent production to 316,000 ounces from 235,000 ounces the previous year.QinetiQ Group, down 0.7%. The company's subsidiary, QinetiQ US Holdings Inc, has entered into a conditional agreement to sell QinetiQ Group's US Services division for an initial USD165 million deal. The agreement, which is set to complete in the second quarter of 2014, will see the US Services division sold to The SI Organisation Inc for an initial cash consideration of USD165 million plus a potential earnout of up to USD50 million in cash, following a market testing exercise that attracted a number of interested parties, said the firm. Following completion of the deal, QinetiQ said it intends to return GBP150 million to shareholders by way of an on-market share buyback.-------AIM ALL-SHARE - WINNERS-------Porta Commnications, up 9.4%. The company said its public relations company in Australia, Newgate Communications PTY, has been appointed by the Australian government to handle the second phase of the Medibank privatisation, in a deal worth AUD2.4 million in fees to Newgate. Medibank is an Australian government-owned private health insurer. In a separate note, Porta said it is launching Newgate Communications in Doha, Qatar, and has secured an initial retainer contract.Bullabulling Gold, up 9.3%. The company has called for shareholders to reject an unsolicited takeover offer from Norton Gold Fields, stating that the offer price undervalues the company. Bullabulling said Norton's offer to acquire all of the shares in the firm at seven cents per Bullabulling share does not adequately reflect "the value of Bullabulling or the Bullabulling Gold Project and does not justify a change in control of the company." It called for shareholders to take no action and has appointed Gresham Advisory Partners as corporate advisors and Herbert Smith Freehills as legal advisors to assist the company to prepare its formal response to the offer.Eden Research, up 8.5%. The firm said its licensee TerpeneTech has launched two pet odour neutralising products using its encapsulation technology. The two products are the first to launch commercially that use the technology. The products, YP Odor Control Formula and YP Odor Control Seborrhea, will be distributed initially in France by Laboratoires Agecom under its E Lotion brand. It will then be rolled out in other territories. Under Eden's licence agreement with TerpeneTech, it will receive royalty income on the net sales of the product. Eden did not disclose any financial details of the agreement.Eurasia Mining, up 8.3%. The platinum group metals and gold exploration and development company has announced that previously announced new reserves at its West Kytlim site have been approved and formally registered by the Russian Ministry of Natural Resources. It said that drilling during 2013 increased its C1 and C2 reserves of contained raw platinum by 35% to 2,283 kilograms due to the conversion of previously established resources at its TK Area 9 West. Eurasia Mining also said that an economic assessment for the site has shown that production costs for the multiple site operation should fall well within the lowest cost quartile of operating costs for platinum producers worldwide. -------AIM ALL-SHARE - LOSERS-------Hume Capital Securities, off 18%. The group's shares are big fallers after The Telegraph reported that Haydale Graphene Industries, one of the newest listings on London's AIM market, is considering taking legal action following its broker's decision to pull out of market-making activity on the day of Haydale's flotation.Touchstone Gold, down 15%. Shares in the gold mining company have tumbled after it set out plans to sell all its assets and become an investment company, while revealing board changes and a share placing that raised USD1.7 million, all aimed at solving its current financing woes. Iofina, down 9.6%. The iodine production company said the preliminary decision of the Montana Department of Natural Resources and Conservation is to deny the company's application for water rights in the western US state. It said it was notified of the decision on Friday, and it is entitled to a hearing with the state to register its disagreement with the preliminary decision of the DNRC. Oilex, down 8.1%. The group said the the 4.5 inch production casing has been set and cemented at its Cambay-77H well, part of the Cambay Production Sharing Contract in Cambay Basin, Gujarat, India. Cambay-77H is located adjacent to the Cambay-76H horizontal well that underwent a successful multiple-staged fracture stimulation programme along its 633m lateral section in 2012 but was suspended prior to testing due to downhole mechanical problems. blur Group, down 7.9%. Liberum Capital has lowered its price target for the company to 600.00 pence, from 700.00p, to reflect the overall de-rating of internet and e-commerce related stocks in recent weeks. Concerns over the high valuation of so-called tech stocks have been weighing heavily on companies around the world over the last couple of weeks.------- Copyright 2014 Alliance News Limited. All Rights Reserved. |