- FTSE 100 struggles to hold record-breaking momentum, nudging up 0.1pc in early trading; oil prices slip back from three-year highs, dragging down energy stocks
- Brent crude touched over $70 per barrel yesterday on signs of tightening supply but has since dropped back
- Engineering giant GKN soars 22pc after receiving "opportunistic" takeover offer; rejected bid values the company at £7bn
- GKN confirms that it will break-up its automotive and aerospace divisions
- Bovis Homes shares climb 3pc after confirming that its turnaround plan remains on track; the housebuilder completed less homes last year but there had been a "step change" in quality as part of the strategy shift, its new boss Greg Fitzgerald said
Bovis raises dividend after a tough year as it predicts stronger 2018
Bovis has raised its dividend and said there had been a “step change” in the quality of its homes as it predicted stronger trading in 2018.
The housebuilder finished 3,645 homes in 2017, 9pc fewer than in the previous year, but emphasised this was done in a “controlled and disciplined manner”. It had faced past criticism for poor quality homeswith electrical and plumbing problems. Former boss David Richie stepped down a year ago after a surprise profit warning.
Greg Fitzgerald, who took over as chief executive in May, said: "The group had a very disciplined year end and delivered against all of its financial and operational targets for 2017.
Shares in sitting duck GKN near all-time high
The Melrose guys are very good at spotting an engineering bargain. GKN management would probably be wise to hold out for more than the current offer, but if anyone can get it out of a rut, Melrose can— Garry White (@GarryWhite) January 12, 2018
GKN, long seen as a natural target for Melrose, has rejected a 405p a share paper-and-cash offer from the turnaround specialist - shares up 25% to 416p. Will Melrose come back?— Ben Martin (@Benjaminwmartin) January 12, 2018
The GKN takeover bid has sent its shares skyrocketing and it is now just pennies below its all-time high of 414.9p.
It's fair to say that GKN was a bit of sitting duck for takeover action. It slipped to a 16-month low in December and the consensus of City analysts have the company's shares on their "buy" lists.
Analysts have speculated for quite some time that a break-up was on the cards and there was even mutterings that an activist investor could snap up a stake to force management to enact sweeping changes.
Engineering giant GKN soars on takeover bid
GKN offer approach was 405P/Shr from Melrose Ind. 21.7% prem is just shy of avg control prem of 25% https://t.co/gkOYkjUcdD— Mike van Dulken (@Accendo_Mike) January 12, 2018
GKn rejects bid, appoints new CEO, announces break up and flags bigger hit from US screw up. Did I miss anything? Busy morning for the company. https://t.co/SLr4nENi9V— Neil Hume (@humenm) January 12, 2018
Crikey! That's a hell of an trading update from engineering giant GKN this morning.
Takeover offer: tick
Break-up confirmed: tick
New chief executive: tick
GKN has soared 22pc in early trading after revealing that it has rejected an "opportunistic" takeover bid from investment firm Melrose Industries.
The offer values the firm at £7bn but the board were unanimous in rebuffing the approach. Rumours have swirled around for months that the firm was on the verge of breaking up its aerospace and automotive divisions to help it realise its value
B&M sales soar thanks to new stores and cheap groceries
Sales at discount retailer B&M soared in the run-up to Christmas as shoppers snapped up its cheap food and revenues were bolstered by its acquisition of grocery chain Heron Foods.
Group sales climbed 23pc to £970m in the three months to Dec 23, up from 20.5pc growth in the same period last year, with Heron adding £80m to the top line.
Sales at UK stores open more than one year were up 3.9pc, which B&M said underlined “continued robust performance of our grocery and FMCG ranges”. However it marked a slowdown from the 7.2pc like-for-like growth it recorded in the same period last year.
Agenda: FTSE 100 struggles to hold record-breaking momentum as oil prices slip back from three-year high
The FTSE 100 is struggling to hold its record-breaking momentum in early trading after oil prices slipped back from three-year highs.
Brent crude touched over $70 per barrel yesterday on signs that declining oil stockpiles are helping to rebalance the market but prices have since pulled back, leaving Brent sitting at just above $69 per barrel.
On currency markets, the pound has inched down against the euro on reports that the CDU and SPD have reached a breakthrough deal in coalition talks. This afternoon, the markets' gaze will fixed on crucial inflation figures in the US, which will provide investors clues over the pace of monetary policy tightening at the Federal Reserve.
Asia stocks - w/ exception of Japan - resumed their ascent, supported by US earnings optimism and upbeat macro fundamentals. #Euro extends rise after ECB minutes signal hawkish policy tone. Bond mkts calm while #Bitcoin rises. pic.twitter.com/Y6jHX7NIkt— Holger Zschaepitz (@Schuldensuehner) January 12, 2018
After yesterday's slew of retail festive trading updates, the corporate calendar has a lighter look to it this morning with Bovis Homes shares climbing after confirming that its turnaround plan remains on track.
While the number of homes the company completed pulled back as part of a strategy shift, new boss Greg Fitzgerald said that there had been a "step change" in regards to the quality of the homes built, a year on from a scandal where Bovis offered to pay customers £3,000 to move into unfinished homes.
Trading statement: Bovis Homes, TP ICAP, Countrywide
Economics: CPI (US), Retail sales (US)