Government clears sale of Royal Mail parent, IP Group gets cash offers for two portfolio firms

London open

The FTSE 100 is expected to open five points lower on Friday, having closed down 1.14% on Thursday at 8,105.32.

Stocks to watch

The UK government has cleared the £3.6bn sale of Royal Mail parent company International Distribution Services to Czech billionaire Daniel Kretinsky's EP Group. In a statement issued on Friday, EP Group said it had met requirements under Britain’s National Security and Investment Act to “provide services that are in support of UK national security”.

IP Group announced on Friday that two of its life science portfolio companies, Intelligent Ultrasound Group and Abliva, had received cash offers, resulting in anticipated total cash proceeds of £13.8m. The FTSE 250 company said the transactions represented significant uplifts from their last-reported net asset values, with Intelligent Ultrasound delivering a 100% uplift and Abliva a 284% uplift. It said it planned to allocate about 20% of the proceeds to expand its share buyback programme, with updates pending completion of the transactions.

GSK has announced positive results from a phase III trial of its ovarian cancer treatment, which met its primary endpoint of progression free survival. Headline results from the FIRST-ENGOT-OV44 phase III trial evaluating a combination of Zejula (niraparib) and Jemperli (dostarlimab) showed statistically significant differences compared with standard chemotherapy. However, the secondary endpoint did not meet statistical significance.

Newspaper round-up

The grocery industry watchdog is to make a rare intervention in a Yorkshire sprout grower’s £3.7m legal case against Aldi over the discount chain’s decision to terminate a long-term supply deal. In papers filed at the high court, W Clappison Ltd, which produced sprouts for Aldi’s UK arm for 13 years, said its supply agreement was ended in February last year at planting time without reasonable notice so it was unable to find new clients immediately. It said it was forced to cease sprout production and sell off its machinery. – Guardian

The media tycoon Richard Desmond is set for a courtroom showdown with the Gambling Commission that could cost good causes tens of millions of pounds, the Guardian has learned, after he rejected a settlement offer linked to his failed bid to run the National Lottery. Desmond launched a high court challenge in 2022 after the commission awarded the 10-year National Lottery licence to the Czech operator Allwyn, rejecting bids from his Northern & Shell business, as well as the incumbent Camelot. – Guardian

More than half of people in the UK receive more in benefits than they contribute in taxes, official figures show. A total of 52.6pc lived in households that received more from the state than they paid to the Treasury last year, according to the Office for National Statistics (ONS). The figures underscore the challenge facing Sir Keir Starmer and Rachel Reeves as they try to tackle a ballooning sickness benefit bill and pressures from an ageing population. – Telegraph

The City regulator has invited hundreds of people caught up in an investment scandal to come forward to receive an apology and compensation after admitting it was guilty of “material” failings including allowing false information to be published on its own register for two years. The Financial Conduct Authority said it was sorry for its mishandling of a fraud at Collateral, a failed peer-to-peer lending platform, and is offering modest payments to investors in recognition of the “distress and inconvenience” caused by its errors. – The Times

The number of cars rolling off British production lines fell by almost a third in November to the lowest level for the month since 1980, amid industry upheaval and weak consumer demand. A total of 64,216 units were manufactured in the month, down 27,711 on November 2023, in the ninth consecutive month of decline, according to the Society of Motor Manufacturers and Traders (SMMT). – The Times

US close

US stocks gave up earlier gains to finish flat on Thursday, pausing after a huge sell-off the previous session, as investors continued to digest hawkish comments from the Federal Reserve and a barrage of economic data.

The S&P 500 and Nasdaq both ended the day down 0.1%, following drops of 3.0% and 3.6% on Wednesday, respectively.

The Dow closed just 0.04% higher but managed to close in positive territory for the first time in 11 sessions – its longest losing streak in nearly 50 years – having fallen 6% since 4 December.

The Dow shed more than 1,100 points (-2.6%) the previous session after the Fed scaled back its projections for interest-rate cuts in 2025.

While the central bank cut its benchmark overnight lending rate by 25 basis points to a target range of 4.25%-4.50%, Powell indicated that the Federal Reserve was now only likely to cut interest rates twice in 2025 – for a total of just 50 basis points – compared with current market expectations for four more cuts.