FTSE 100 Live: Stocks off lows; Renewi rebuffs £636 million bid approach

© Reuters. FTSE 100 Live: Stocks off lows; Renewi rebuffs £636 million bid approach

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• FTSE 100 down 26 points at 7,568
• William Hill owner 888 warns of lower revenue
• Mitchells & Butlers PLC (LON:MAB) sees top-end earnings

Renewi rejects £636 million bid from Macquarie

Renewi PLC (LON:RWI) shares soared 35% to 685p after news emerged it had rejected a £636 million bid approach made by Macquarie Asset Management.

Macquarie said it made its 775p per share move on September 25 but the board of Renewi had turned it down.

Macquarie said the bid represents a multiple of 8.4x Ebitda for the year ended March 31 2023 which compares favourably to the trading multiples of Renewi's listed peers in the European waste and resource recovery sector.

The bid offers a "compelling opportunity for Renewi's shareholders to realise their investment for cash at a very significant premium and at an attractive multiple," Macquarie said.

HSBC eyeing Citi's Chinese onshore retail wealth business

HSBC Holdings PLC (LON:HSBA) is in talks to buy Citigroup (NYSE:C)'s China onshore retail wealth business as it continues to build its presence in the mainland, Bloomberg reported, citing people familiar with the matter.

Citi’s China retail wealth business has about $4 billion of assets and deposits and about 400 staff, which would be transferred to HSBC if the deal goes through, the people said.

The deal could be announced as early as next month, one of the people said.

Diageo update should reassure, reckons BofA

Diageo’s trading statement was a case of no news is good news, according to Bank of America (NYSE:BAC).

The bank felt the update should provide some reassurance and evidence of growth acceleration in the second half should support a re-rating.

BofA said while there is no explicit commentary on current trading it believes that trading in the US has not changed much in the last two months and is still growing around mid-single digits, with Diageo (LON:DGE) below that

In Europe, it thinks the first half should benefit from pricing actions taken in the second half of the previous financial year while in China, it should be less impacted by the current environment, while momentum in India should have remained strong.

The broker has buy rating on Diageo but cut its price target to 3,600p from 3,800p.

But positive forex movements drive an increase to EPS estimates of between 3-5%.

“For FY24, we now assume a £230m negative FX impact on EBIT versus c-£400m previously, noting, however, that Diageo will soon move to USD reporting,” the bank said.

It also trimmed its organic forecasts for 2024 marginally, it now expects +4.9%/+6.0% organic sales/EBIT for 2024 (versus +5.2%/+6.5% previously).

Amongst a sea of red, Diageo shares are holding up well, down 0.3% at 3,013.25p.

Car production drops almost 10% in August

Car production dropped by almost 10% in August, following six consecutive months of growth, new figures from the Society of Motor Manufacturers and Traders show.

A total of 45,052 models rolled off factory lines, the industry body said.

UK car manufacturing falls in August as factories gear up for next gen models

???? production down -9.7%, following 6 months of growth

⬇️Production for home market falls -25.2%

⚡️Electrified vehicles represent nearly 2 in 5 of all cars producedhttps://t.co/mSyqyrprKk pic.twitter.com/wQo49nhZED

— SMMT (@SMMT) September 28, 2023

August typically has the fewest number of cars built because of summer shutdowns but last month was also hit by extended production pauses at some plants for planned maintenance and upgrades as car makers gear up to produce the next generation of electric vehicles.

Production for the domestic market fell by a quarter while output for export dropped by 5.5%, driven largely by a decline in shipments to the US, China and Japan.

The EU remained the UK’s biggest global market with almost six in 10 exports heading for the bloc.

In the year to date, overall production has increased by 11.8% to 571,671 units, the SMMT said.

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