FTSE starts the week on a lower note as China tariffs kick in
Fiona Cincotta September 24, 2018 9:36 AM
The FTSE and other major European indices are heading lower at the start of the week despite a flurry of activity in the M&A market.
Trade war tensions are still overshadowing company news particularly given that the latest batch of US tariffs on Chinese goods goes into effect Monday. China has already cancelled further trade talks in response.
Most big Asian markets are closed for holiday today but Hong Kong remained open and traded lower.
M&A activity burst into life
The weekend finally brought a resolution to the drawn out bidding saga for Sky Plc and after months of bids and counter-bids US cable giant Comcast beat Rupert Murdoch’s Fox to buy Sky at £17.28 per share.
The winning offer was made in a rare open auction in London on Saturday and valued Sky at $38.8 billion. Sky has already advised shareholders to accept the offer and the television firm’s shares jumped 8.74% in early trade Monday to trade at 1723.75.
The mining sector also had a major merger Monday, an unusual move given that low metal prices over the last few years have triggered more sales of assets and closures than acquisitions.
London listed gold miner Randgold Resources and Canadian miner Barrick Gold have shaken things up by agreeing an all-share merger to create the world’s biggest gold mining company. The deal worth $18.3 billion pushed Rangold shares up 3.72%.
Lastly UK firm Drax is looking to buy parts of Spain’s Iberdrola business, particularly UK pumped storage and renewable hydro and gas-fired generation assets. Talks are still at an early stage but if it goes ahead it will be fully debt-funded. Shareholders didn’t seem to like the idea, however, and the FTSE 250-listed Drax started sliding, down 0.22% in early trade.
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