Proactive Investors -
- FTSE 100 falls 20 points to 8234
- Royal Mail (LON:IDSI) owner IDS says 'yes' to formal offer from Kretinsky
- Ocado (LON:OCDO) and St James's Place likely to be relegated from FTSE 100
Anglo denies BHP more time
The Anglo American (JO:AGLJ) board thinks BHP has not assaged its concerns about the "disproportionate execution risk" associated with the proposed takeover structure and the value for shareholders and so has unanimously decided to reject a further extension to the takeover deadline.
This means BHP has to 'put up or shut up' by 5pm today.
Anglo reckons BHP's proposal "includes the same highly complex and unattractive structure as the proposals previously rejected" over a month ago, including carrying out two demergers of Anglo's publicly listed subsidiaries side by side, while also completing the takeover.
The "inter-conditional nature of the three transactions is unprecedented", it said, with regulatory approvals in various juridisactions "likely to result in material conditions being imposed that would disproportionately impact the value of Anglo American Platinum and Kumba and, therefore, the value delivered to Anglo American's shareholders".
Anglo says its own restructuring plan is "simpler", though it is very similar to the BHP double-demerger proposal.
Why are markets down?
The FTSE 100 is trading at a three-week low, with the dsix-day losing streak on track to be the longest losing streak since August last year.
Analyst chatter points to the index "teetering on the edge of a correction phase," reports Reuters. If the Footsie retreat to the 8,000 mark it would confirm this trend.
"It's just investor concerns. It's been pessimistic over the last few days. It's also a very data-light week," Christopher Peters, trading floor manager at Accendo Markets tells the newswire.
He says the "chunky, solid information coming next week" is enough to prompt investors into taking "a bit of a pause".
'ChatGPT analyse these accounts for me'
Accounting giant PwC is rolling out ChatGPT to its 100,000 US and UK staff, the Wall Street Journal is reporting.
In doing so, the big four auditor is set to become OpenAI’s largest ChatGPT Enterprise customer and the first reseller of the business-facing AI model.
ChatGPT Enterprise is a version of the chatbot aimed at large companies.
Industry media say that many accounting professionals are already combining their existing spreadsheet skills with new generation AI tools to to improve efficiency, or asking chatbots like ChatGPT to Smith to interrogate profit and loss statements, etc.
Working and non-working households
The Office for National Statistics has published data on the economic status of households in the UK and the people living in them.
Almost 59% of relevant households had all members aged 16 years and over in employment during the period from January to March 2024.
There were an estimated 26.7% of households with a mix of at least one working and one workless adult.
An estimated 14.4% of households where no member of the household was in employment.
Meanwhile the FTSE 100 is holding its position, down 0.24%.
Other European indices are further in the red, with Spain's IBEX down 0.25%, Germany's Dax down 0.4%. Italy's FTSE MIB down 0.5% and France's CAC down 0.6%.
*POUND RISES TO STRONGEST SINCE AUGUST 2022 AGAINST THE EURO— Michael Brown (@MrMBrown) May 29, 2024
National Grid goes ex-rights, UBS does the maths
National Grid (LON:NG) PLC shares are down another 1.5% today and have now fallen over 16% in the two and a bit days since the rights issue announcement last week, if adjusting for the bonus element.
NG went 'ex rights' on Friday. So, of the original 3,722 million shares before the rights issue, every 24 shares owned has the right to buy seven new shares at a discounted price of 645p.
The rights have been consolidated up at 3.43 shares per right.and the rights trade separately, so there are now two routes to buying a single equity share in NG, as UBS explains.
NG.L share, which carried rights to the final dividend of 39.12p (which goes ex on 6 June); or a single NG right, which requires an additional 645p by 10 June to take up the rights, but is not entitled to the dividend.
"Apart from the dividend, there should only be a small difference between the two shares, owing to the option value to limit losses on the rights and the time value of money," UBS analyst Mark Freshney says, noting there is a 5p difference.
The key is the dividend cut and dividend preference theory, says the analyst.
"A number of high-yielding stocks have cut in the past four years and recovered (SSE (LON:SSE), Orsted (CSE:ORSTED), Fortum (LON:0HAH), Centrica (LON:CNA), REN), or else are grid-focused businesses with lower payout ratios (EON, SSE) as the shareholder base has refocused on SOTP/growth rather than yield."