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Market Update

DS Smith to Buy Interstate Resources, J. Wood Issues Cautious Outlook


Author: Sarla Buch
ticker.com
Last Update: 10:59 AM ET June 29 2017

4:00 PM Frankfurt – Co-op Bank secured £700 million rescue deal. DS Smith agreed to buy 80% stake in the U.S.-based packaging unit. John Wood issued cautious fiscal outlook. Rio Tinto shareholders approve Yancoal Australia coal deal.

In London trading, FTSE 100 index edged up 4.69 to 7,392.49 and in Frankfurt the DAX index declined 156.25 or 1.2% to 12,491.57.

In Paris, CAC 40 index dropped 51.07 or 1% to 5,201.83.

The Co-operative Bank Plc, the U.K.-based financial services provider secured a £700 million or $898 million rescue deal with hedge fund investors positioning the bank to meet regulatory capital requirements.

Under the terms, the bank can raise at least £443 million in a debt-for-equity swap, including separate cash offer to certain retail holders and £250 million in new equity from hedge funds holding its bonds and shares.

“The proposals will mean that the Bank can continue as a viable stand-alone entity,” said the chairman of the bank Dennis Holt.

DS Smith Plc jumped 4.4% to 463.60 pence after the U.K.-based corrugated cardboard packaging maker reported revenues in the year ending in April soared 18% from a year ago to £4.8 billion.

Net profit in the year surged 24.5% from a year ago to £208 million from £167 million and diluted earnings per share advanced to 22 pence from 17.5 pence.

The packaging maker today agreed to buy 80% stake of the U.S.-based rival and privately held Interstate Resources, Inc from Merpas Co S.à.r.l. for about £722 million or $920 million.

EXIN, the Netherland-based insurance services provider agreed to acquired 75% stake in Greece-based lender The National Bank of Greece’s insurance subsidiary for about €718 million or $820.17 million.

Gesco AG traded unchanged at €57.49 after Germany-based financial services provider said revenues in the year ending in March dropped 2.3% from a year ago to €482.5 million.

Net income in the year declined 50.9% from a year ago to €7.9 million from €16.1 million.

John Wood Group Plc dropped 2.6% to 643.50 pence after the U.K.-based engineering services provider said in a statement that first-half performance is weaker than anticipated.

John Wood said projects and modifications work specifically in the North Sea region was materially down from same period a year ago and the project outlook is not expected to improve in the second-half.

However, automation contracts with Chevron and ExxonMobil are on track and the engineering firm reaffirmed that maintenance work is expected to improve in the remaining fiscal 2017.

Separately, the engineering services provider today was awarded multi-million dollar contract from Canada-based Husky Energy Inc to complete detailed engineering for topsides of White Rose, offshore of eastern Canada.

Rio Tinto Plc advanced 2.7% to 3,241 pence after the U.K.-based miner’s 97% shareholders today approved the sale of Australia-based coal assets to China-focused Yancoal Australia Ltd for about $2.69 billion.

Rolls-Royce Holding Plc slipped 1.2% to 899 pence after the U.K.-based military aero engines maker plans to invest £150 million over the next few years in new and existing civil aerospace facilities in Derby or across the East Midlands to ramp-up in engine production.

Tesco Plc rose 0.4% to 172.40 pence after the U.K.-based retailer and food wholesaler Booker Group Plc requested the competition watchdog to “fast-track” its investigation into their £3.7 billion or $4.8 billion merger.

At present the Competition and Markets Authority is in the mid-phase of merger approval process.

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Sources: Data collected by 123jump.com and Ticker.com from company press releases, filings and corporate websites. Market data: BATS Exchange. Inc