Agreed offer for Premier Farnell, Ashtead unveils cash payouts

London open

The FTSE 100 is predicted to fall a further 28 points on Tuesday, extending the index's losses of previous sessions.

Stocks to watch

Swiss-based Daetwyler Holding AG has agreed to buy London-listed electronic component distributor Premier Farnell for 165p per share in cash. The price represents a premium of around 51% to Premier’s closing price on Monday and values the company at approximately £615m.

After a strong fourth quarter where profit margins grew to record levels, Ashtead has announced a bumper dividend and a £200m share buyback. The construction equipment rental group proposed hoisting the final dividend to 18.5p, meaning the total payment of 22.5p will be up 48% on the previous year.

Direct Line Insurance said it had received approval from the Prudential Regulation Authority to use its partial internal model (PIM) to calculate the solvency capital requirement under EU solvency rules. “In line with management's previous expectations, this approach will enable the group to operate under the PIM from 1 July 2016,” the insurer said.

Newspaper round-up

Mounting fears that Britain will vote to leave the European Union this month have sent the cost of insurance against a collapse in the pound soaring. As the pound collapsed back towards $1.40, traders have been hedging themselves, with euro/sterling one-month implied volatility, a measure based on the cost of insurance options taken to protect investors against movement in the pound over the next month, surpassing levels seen in the financial crisis. - The Times

Job opportunities in the retail sector are expected to fall to their lowest level for five years as shop owners claw back the costs of the government’s new living wage. About a third of employers in the retail sector intend to restrict the number of new jobs as higher pay packets for the lowest-paid staff eat into profit levels and cut dividend payouts. - The Guardian

Barclays is the British bank most exposed to the referendum on the UK’s membership of the EU, as its international operations will be hit the most by Brexit according to analysts. Joseph Dickerson at Jefferies notes that Barclays share price is highly correlated with moves in sterling, which explain 80% of the stock’s moves over the past 18 months. - Daily Telegraph

US close

US stocks declined on Monday on jitters ahead of Britain’s European Union referendum and the Federal Reserve’s interest rate decision.

At the close the Dow Jones Industrial Average fell 0.74%, the S&P 500 dropped 0.81% and the Nasdaq dipped 0.94%.

Worries about a possible Brexit grew on Monday after polls showed more Britons in favour of leaving the European Union before the 23 June referendum.