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Bayer share price surges amid report it could settle Roundup weedkiller lawsuits for $8bn

Bayer’s share price rocketed by as much as 11 per cent today as a report emerged that the German giant had proposed to pay $8bn (£6.59bn) to settle 18,000 lawsuits relating to its Roundup weedkiller.

 

Bayer later trimmed gains back to 5.8 per cent on Germany’s Dax stock exchange to leave shares at €66.6 after Bloomberg’s article.

The pharma giant has seen shares fall by more than a third since a court decided last August that subsidiary Monsanto should have warned people about Roundup’s alleged cancer risks.


Bayer’s legal team has held talks in New York with lawyers representing claimants, with Bayer having offered to pay between $6bn and $8bn to settle claims, Bloomberg reported.

Claimants are hoping to over $10bn.

The parties are set to ask for a postponement of the next Roundup trial, due to start this month, the report added.

A US court ruling earlier this month saw a judge reduce the sum Bayer should pay out to one Roundup claimant from $80.3m to $25.3m.

 

Judge Vince Chhabria ruled the original sum was “constitutionally impermissible” as it was almost 15 times the compensatory damages award.

Read more – www.cityam.com

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Asos shares crash 20% on third profit warning since December

Shares in Asos crashed over 20% on Thursday after the online fashion retailer warned profits would be lower than forecast.

Asos said that “operational issues” related to upgrading its warehouses had hit sales in the US and Europe.

As a result of the teething problems, Asos said on Thursday that profits were likely to be between £30 million and £35 million this year. It had previously said they would be £55 million. Asos also cut its full-year sales growth forecast from 15% to 12%.

It represents the third profit warning in less than a year. The company also warned on profits in December and March.

CEO Nick Beighton said: “Whilst we are making good progress in improving customer engagement, our recent performance in the EU and US was held back by operational issues associated with our transformational warehouse programmes.

“Embedding the change from the major overhaul of infrastructure and technology in our US and European warehouses has taken longer than we had anticipated, impacting our stock availability, sales and cost base in these regions.”

 

Read More – www.msn.com

 

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RBS shares jump after Saudi bank merger boosts capital

Royal Bank of Scotland shares have jumped this morning after the bank said a merger between two Saudi banks would boost its capital and reduce its risk weighted assets by £4.7bn.

Saudi Arabia’s Alawwal Bank and rival Saudi British Bank (SABB) completed a merger yesterday, creating the third-biggest lender in the kingdom.

RBS, through its Dutch subsidiary Natwest Markets NV, said it was part of consortium owning a 40 per cent stake in Alawwal bank – with RBS itself holding an equivalent 15.3 per cent stake in the bank.

Share in RBS jumped two per cent this morning following the completion of the merger and the bank was among the FTSE 100’s biggest risers. The UK bank said the merger had left the consortium with a 10.8 per cent stake in the new SABB,  and RBS with a 4.1 per cent shareholder. It said it would receive £400m from the disposal of those shares and a reduction in risk weighted assets of £4.7bn. The bank’s CET1 core capital ratio would also rise by 60 basis points. Chief executive Ross McEwan said: “We are pleased that this merger has now concluded; it will help facilitate the future exit of our shareholding as we continue to focus on our key target markets. “The release of capital will also have a positive and material financial impact for RBS.”

 

Read More – www.cityam.com

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Why Domino’s Pizza sell-off was overcooked

Hungry bargain hunters gobbled up shares in Domino’s, correctly betting than an early slump was unfair.

After selling 12 pizzas every second on New Year’s Day, the rest of 2019 certainly hasn’t panned out in the same emphatic fashion for Domino’s Pizzaor its investors.

Shares slumped as much as 12 per cent in early deals, undoing all the rally of the past six weeks, as the company warned that its international operation would no longer break even this year. Its UK business of more than 1,100 stores also underwhelmed the City with like-for-like sales growth of 3.1 per cent in the quarter to March 31.

The fall-out from the first quarter update continues the poor run of form for the FTSE 250 stock, which had been testing the 400p barrier as recently as last summer.

Last week’s UK figures were distorted by tough comparatives from a year earlier after a £1.99 promotion helped to boost like-for-like sales by 7 per cent in Q1 2018. Volumes were down 2.7 per cent in the most recent period, despite that bumper New Year’s Day when 516,500 pizzas were sold.

Analysts at Numis are relaxed about the first quarter performance in the UK, particularly as like-for-like sales on a two-year basis continue the 10 per cent growth rate seen in Q4.

Numis left its forecast unchanged for UK trading this year, although it is cutting group pre-tax profits by 5 per cent to £95 million due to the weaker guidance for the international division following its £4.1 million loss last year.

Domino’s reported “persistently weak” system sales in all its international markets, with trading visibility also limited. New management teams in Norway, Sweden and Switzerland are attempting to improve the performance, but in the meantime the company is tightening its focus on costs and capital deployment.

Numis said the continued poor performance of a business accounting for 10% of trade will leave some investors to ask if Domino’s should be deploying capital into loss-making markets.

However, the broker still remains supportive of Domino’s and its highly cash generative business model. Trading on 15 times 2019 earnings, Numis said the shares were attractively valued and expected them to re-rate back towards 340p over time.

Canaccord Genuity has a price target of 310p, while UBS thinks the shares are worth 245p. UBS analyst Heidi Richardson said the lack of an update on discussions with UK franchisees was also disappointing given the limited visibility on future store openings.

Seven new UK stores were added in the year to date, compared with the 58 added in the previous financial year. Domino’s admitted in full-year results that there were likely to be fewer new stores this year given the ongoing discussions with franchisees on commercial terms.

 

The shares have ebbed away since then, even though Domino’s deserves credit for continuing to show resilience in the face of competition from the likes of Just Eat (LSE:JE.) and Deliveroo. It’s also had the distraction of an ongoing dispute with franchisees, some of whom are fighting for a bigger slice of profits.

 

Read More – www.cityam.com

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Sainsbury’s shares dive after Asda merger put in doubt

Sainsbury’s shares have dived 15% after the UK’s competition watchdog cast doubt on its plan to buy Asda.

Customers could see higher prices and less choice if the two grocers combined, the Competition and Markets Authority (CMA) said.

It said it could block the deal or force the sale of a large number of stores or even one of the brand names.

However, it also said it was “likely to be difficult” for the chains to “address the concerns”.

Sainsbury’s boss said the findings were “outrageous”.

In its provisional report on the proposed merger, the CMA also said the merger could lead to a “poorer shopping experience”.

Stuart McIntosh, chair of the CMA’s independent inquiry group, said it had found “very significant competition concerns in a number of areas – they are to do with grocery shopping in supermarkets, grocery shopping online and the companies’ petrol stations”.

“However, if one recognises that the competition concerns are quite broadly based… putting together a package of measures which addresses those concerns is likely to be complex and quite challenging,” he said.

But Sainsbury’s chief executive Mike Coupe described the CMA’s analysis as “fundamentally flawed” and said the firm would be making “very strong representations” to it about its “inaccuracy and lack of objectivity”.

“They have fundamentally moved the goalposts, changed the shape of the ball and chosen a different playing field,” he told the BBC.

“This is totally outrageous.”

 

Read More – www.bbc.co.uk

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Marsh & McLennan Buys UK Insurance Firm JLT In $5.6bn Deal

FTSE 250 insurance firm JLT has accepted a $5.6bn (£4.3bn) takeover offer from US financial services giant Marsh & McLennan.

Shares in JLT, which employs more than 4,000 people in the UK, soared 32 per cent in early trading on Tuesday after the deal was announced.

The bid values JLT at $6.4bn and will see the company’s shareholders receive £19.14 per share, a premium of almost 34 per cent to the closing price on Monday.

Marsh employs more than 65,000 people around the world, with operations in 130 countries.

The company said it expects the deal will help it reduce expenses by around $250m, partly through job cuts.

Based on preliminary evaluations, Marsh said, it expects a potential headcount reduction of between 2 and 5 per cent of the combined group’s workforce. JLT employs more than 10,000 people, meaning the potential number of jobs lost could be more than 3,500.

Marsh chief executive Dan Glaser said the acquisition “creates a compelling value proposition for our clients, our colleagues and our shareholders”.

“The complementary fit between our companies creates a platform to deliver exceptional service to clients, and opportunities for our colleagues,” he said.

“On a personal level, I have come to know and respect Dominic Burke and his management team from my time both at MMC and as an underwriter. I am confident that with the addition of the talented colleagues of JLT, Marsh & McLennan will be an even stronger and more dynamic company.”

Mr Burke, JLT’s chief executive, said: “I am enormously proud of what JLT has achieved, founded on our people, our culture and our unwavering commitment to our clients. MMC is, and always has been, one of our most respected competitors and I believe that, combined, we will create a group that will truly stand as a beacon for our industry.”

Read More – www.independant.co.uk