QinetiQ acquires Meggitt Target Systems, John Laing buys into high-speed train project
London open
The FTSE 100 is expected to open 11 points lower on Wednesday, after closing up 0.38% at 7,043.96 on Tuesday.
Stocks to watch
Meggitt and QinetiQ confirmed on Wednesday morning that QinetiQ has acquired Meggitt Defence Systems and Meggitt Holdings Canada, together Meggitt Target Systems, from Meggitt for £57.5m on a cash-free, debt-free basis. During the year to 31 December, Meggitt Target Systems generated £26.1m revenue and £4.9m EBITDA. Meggitt said it has agreed with the trustee to pay £10.2m of the sale proceeds into the Meggitt Pension Plan to reduce the deficit.
FTSE 250-listed John Laing Infrastructure Fund is to buy a 6% minority stake in a rail project from John Laing Investments for £42.4m. The acquisition of the Intercity Express programme phase one project will be financed from the fund’s revolving credit facility and is expected to complete in the new year.
Dairy Crest has agreed to set up a research partnership with Danisco Animal Nutrition, part of DuPont's Industrial Biosciences business. Product development and trials carried out by this venture will look to test the efficacy of Dairy Crest's galacto-oligosaccharide 'GOS', prebiotic used in infant formula, for use in poultry and swine.
Riverstone Energy has offloaded a C$28m loan Canada's CIOC and swapped the proceeds for an investment in CIOC warrants instead.
Newspaper round-up
Sir Philip Green may have to pay £1bn to resolve the problems facing the BHS pension scheme under proposals tabled by MPs. The work and pensions committee, which is chaired by Labour MP Frank Field, has called for the government to introduce a “nuclear deterrent” to stop companies or individuals trying to avoid their responsibilities to pension schemes. – Guardian
Britain’s Brexit deal must meet the needs of all sectors of the economy if the UK is to be successful outside the European Union, the CBI has warned. The business lobby group urged the government to take a “whole economy” approach to negotiations with the EU, so that no sector is left behind. – Guardian
House prices will rise by 3 per cent next year — more than previously forecast — according to the the Royal Institution of Chartered Surveyors. The RICS, whose monthly reports are closely monitored by the Bank of England and the government, said that the shortage of homes available meant prices would continue to rise. – The Times
Hundreds of mergers and acquisitions could be derailed by a proposal to force regulators to scrutinise deals that may threaten pension promises. MPs on the work and pensions select committee lamented the sharp decline in the number of deals being vetted by the pensions regulator, saying the hands-off approach could be exploited by unscrupulous scheme sponsors. – The Times
Volvo has gone further down the road to a stock market listing after a major fundraising with Swedish institutional investors. The car company - which is owned by China’s Zhejiang Geely Holding Group - raised SEK 5bn (£483m) by issuing preference shares to pension funds AMF and AP1 and insurance group Folksam. - Telegraph
US close
US equity markets were in the green on Tuesday as the dollar rebounded and the Dow flirted with the 20,000 mark.
The blue-chip index has recently been within touching distance of hitting the target but has pulled back.
The Dow Jones Industrial Average added 0.46% to 19,974.62, the S&P 500 rose 0.36% to 2,270.76, and the Nasdaq 100 gained 0.38% to 4,953.80 by the time markets closed.
Earlier, the euro fell to its lowest level since 2003 against the greenback, falling 0.5% to $1.0355, while the differential between German and US 10-year yields widened to 1989 levels.
Michael Hewson, chief market analyst at CMC Markets, said: “The dollar has once again swept all before it, rising the most against the yen after the Bank of Japan left interest rates unchanged, while updating its economic outlook for the Japanese economy.”
In oil markets, Brent crude rose 1.12% to $55.54 a barrel and West Texas Intermediate was up 0.88% to $53.53.