MARKET REPORT: Vodafone said to planning possible £140bn merger with US-listed …

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Mobile phone giant Vodafone, 1.25p easier at 217.5p, has been involved in a couple of the biggest deals in corporate history, including its £116billion purchase of Germany’s Mannesmann in 1999 and the £88billion sale of its stake in Verizon to Verizon Wireless in 2014.

According to the powers that be, it is set, early in 2016, to feature in a mouth-watering deal to create a global telecoms powerhouse.

Apparently corporate financiers have been working long hours over the festive period on a possible £140billion merger between Vodafone and US-listed cable company Liberty Global. 

Mega deal: Corporate financiers have reportedly been working long hours over the festive period on a possible £140billion merger between Vodafone and US-listed cable company Liberty Global

Mega deal: Corporate financiers have reportedly been working long hours over the festive period on a possible £140billion merger between Vodafone and US-listed cable company Liberty Global

Remember, talks aimed at combining their mobile and cable networks in the British, German and other European markets, either through asset swaps, a merger or takeover, ended in September.

But dealers now hear that John Malone, Liberty’s chairman, has instigated new merger talks and during the past few weeks Vodafone and Liberty bosses have been meeting major investors to gauge what their appetites may be for a ‘friendly’ merger.

Their response has been favourable and the wheels have now been put in motion to tie up a mega-deal early in the New Year.

Liberty Global, which owns Virgin Media, has extensive firepower and has swallowed Cable Wireless Communications. It holds a 9.9 per cent stake in Downtown Abbey broadcaster ITV, 1.5p easier at 276.5p, and could any day soon decide to bid for the rest.

The pharmaceutical and biotech sectors have been hyperactive in MA activity this year and the trend looks likely to continue in the coming months.

Drugs giant GlaxoSmithKline eased 7.5p to 1384p amid speculation it had been stalking Pacific Bioscience of California, which traded a fraction easier at $13.40 in New York, but is about to lose out to rival Roche which already has a collaboration agreement with PACB. Dealers heard a take-out price could be around $20 a share.

Profit-taking following the recent festive rally from a mid-December low of around 5800 left the Footsie 40.52 easier at 6274.05, while the FTSE 250 lost 49.72 points to 17519.67. A similar trend befell Wall Street which declined 117.11 points to 17603.87 as Brent crude slipped back towards the 11-year lows of last week.

Controversial commodities trader Glencore again came on offer and closed 3.3p off at 89.8p. Although 35 per cent above the year’s low, the stock trades almost £3 below July 2014’s peak following the commodity price rout.

Lloyds Banking Group eased 0.4p to 73.6p but financial services giant Hargreaves Lansdown says it is a stock to watch in 2016. 

Steve Clayton, head of research, says the Treasury has announced it plans a retail offer of Lloyds shares, likely in the spring.

It is lean, simple and committed to a generous distribution policy. It is already generating a return on required equity of over 15 per cent, far above the cost of capital. Market-leading cost-efficiency, strong cash and capital generation derived from leadership in core categories like mortgages and current accounts all bode well for future dividends.

The first of the major retailers to report its Christmas trading trends on Tuesday, Lord Simon Wolfson’s Next advanced by 40p to 7275p.

News that John Lewis’s online revenues rose 25 per cent during the festive period augurs well for Next Retail, its mega-successful online operation.

Renewed selling on growing concern about the threat to its business from Amazon’s newly launched online groceries service, dragged Ocado down further to 299p before it closed 10.9p lower at 315p.

Fitbug crashed 21 per cent to 0.85p after the jam tomorrow provider of online personal health and wellbeing services wheeled out a profits warning. 

It said trading in the second half is expected to show significant increases in pre-tax losses as a result of a challenging retail environment in the US. In September it reported a first-half deficit of £3.2milllion, and obviously rising, which compares with a current market capitalisation of around £2.5million.

Suspended at 3.75p two weeks ago, cash shell Silver Falcon yesterday confirmed rumours that a reverse takeover is on the cards. It has agreed a non-binding memorandum of understanding with the board of Australian unlisted company Lime Holdings on what would constitute a reverse takeover.

Ortac Resources closed steady as a rock at 0.04p after reporting reduced losses for the half-year due to cost rationalisation programmes in both Slovakia and London.

Midatech Pharma jumped 16.5p to 177.5p following the successful completion of its acquisition of Zuplenz, a cancer treatment.

Zuplenz is marketed in the US for the prevention of chemotherapy and radiotherapy-induced nausea and vomiting, and has a target market of £3.1billion by 2018.

Congratulations to Bob Holt, chairman of several PLC companies, including social housing giant Mears, 3.25p better at 448.25p. 

He has been awarded an OBE in the New Year honours list. The jocular northerner set up The Footprints Foundation in 2008 and has since raised thousands of pounds for charities. 

He is particularly passionate about six orphanages he supports in South Africa.

 

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