What to Watch: Eddie Stobart takeover talk, LSE hunts finance chief, and stocks slide on China data
Here are the top business, market, and economic stories you should be watching today in the UK, Europe, and abroad:
Eddie Stobart takeover talk
Haulage firm Wincanton (WIN.L) has said it is considering a takeover bid for rival Eddie Stobart.
Wincanton said in a statement that it is “undertaking a diligence exercise on Eddie Stobart and its assets, in order to enable it to assess the potential merits of a combination.” It has until 15 November to decide whether to make a firm offer.
Both sides stressed there was no certainty that any deal would be done.
Wincanton’s approach comes days after Andrew Tinkler, the former boss of separate haulage business Stobart Group, pulled out a possible takeover of Eddie Stobart. Isle of Man-based DBAY Advisors, which already has a 10% stake in Eddie Stobart, is also interested in the firm.
London Stock Exchange hunts finance chief
The London Stock Exchange (LSE.L) has kicked off a hunt for a new chief finance officer after current finance chief David Warren announced plans to retire by the end of next year.
Warren, who was previously interim CEO, is set to continue in his role until the London Stock Exchange finalises its planned £22bn takeover of data group Refinitiv.
“David has been an outstanding contributor to the group's success,” CEO David Schwimmer said in a statement. “I'd like to thank him for his partnership during my first year at LSEG [London Stock Exchange Group].”
News of Warren’s planned retirement came as the London Stock Exchange reported strong quarterly growth despite having to fend off an unwanted takeover approach from its Hong Kong rival. Revenue rose 10% at constant currency levels to £521m.
Stocks slide on China, Brexit
European stock markets slipped on Friday after disappointing data from China and ahead of a crunch Brexit vote in parliament on Saturday.
Stocks were under pressure after Chinese economic growth came in at its lowest level in almost three decades. Chinese GDP grew by 6% in the third quarter, official data overnight showed.
“The country is clearly continuing to feel the trade war squeeze, putting all the more pressure on the so-far insubstantial – and uncertain, given the dispute over Hong Kong – ‘partial trade deal’ announced last weekend,” Connor Campbell, a financial analyst at SpreadEx, wrote.
The weak growth figures fuelled fears about a looming economic slowdown and possible global recession. Britain’s FTSE 100 (^FTSE) was down 0.2%, France’s CAC 40 (^FCHI) was down by 0.2%, Germany’s DAX (^GDAXI) was flat, and the Euronext 100 (^N100) was down by 0.1%.
Traders were also watching Brexit negotiations, ahead of a crucial vote in parliament on Saturday on whether to approve Boris Johnson’s new Brexit deal. The deal is expected to be rejected but the pound was holding near 5-month highs against the dollar and the euro on Friday morning as analysts said a no deal Brexit was now less likely in any case.
Overnight in Asia, Japan’s Nikkei (^N225) closed up by 0.1%, the Hong Kong Hang Seng Index (^HSI) was down by 0.4%, and China’s Shanghai Composite (000001.SS) was down by 1.3% after the poor GDP data.
Busy day for hotels
InterContinental Hotel Group (IHG.L) has been bruised by a tough third quarter in Asia, while easyHotel said the UK market was weak, and Marriott announced a £101m deal.
InterContinental Hotel Group suffered a 36% drop in revenue per available room in Hong Kong due to ongoing protests in the region, while revenue per available room in Greater China declined by 6.1%. The company blamed the poor performance in the region for a 0.8% decline in revenue per available room globally.
“Weaker economic conditions are bad news for big hotels catering for business travellers,” Russ Mould, investment director at stockbroker AJ Bell, said. “Corporates often look closely at their cost base when times get harder and travel is an easy place to make cuts.”
Elsewhere, budget hotel group easyHotel (EZH.L) warned of ongoing “challenging trading conditions” in both the UK and continental Europe. The group said “ongoing political and economic uncertainty” was hitting revenue per available room in the UK and performance was “mixed” across Europe.
Despite this, easyHotel’s annual revenue rose by 56% to £17.6m and total sales rose by 28% to £47.8m. easyHotel shares jumped 11.1% in response.
Finally, hotel group Marriott (MAR) has announced a £101m deal for Barbados hotel business Elegant (EHG.L).
The hotel chain said the 110p-a-share bid, which is a 57% premium on the shares prior to the deal, would allow it to expand its new all-inclusive holiday packages. The deal has been accepted by the Elegant board.
What to expect in the US
US stocks future are pointing to a slightly lower open later today. S&P500 futures (ES=F) were down by 0.1%, Dow Jones futures (YM=F) were down by 0.1%, and Nasdaq futures (NQ=F) were down by 0.1%.
Companies reporting in the US later today include:
