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Market Update

EU Approves Monte dei Paschi Bailout, JP Morgan Exited Vantiv Deal

Author: Sarla Buch
Last Update: 11:55 AM ET July 05 2017

4:00 PM Frankfurt Italian bank Monte dei Paschi received 5.4 billion bailout from the EU. Booker Group sales jumped 4%. Ocado sales surged 22%. SIG revenues soared 8.1%. Worldpay agreed to be acquired by Vantiv for 9.1 billion and JPMorgan exited from the announced deal.

In London trading, FTSE 100 index rose 11.21 or 0.2% to 7,368.77 and in Frankfurt the DAX index rose 9.73 to 12,447.15.

In Paris, CAC 40 index edged up 2.16 to 5,177.60.

Banca Monte dei Paschi di Siena S.p.A., the Italy-based privately held commercial and retail bank forecasted in 2021 net profit likely to more than 1.2 billion or $1.4 billion after restructuring plan approved by the European Commission.

Yesterday, the Italian government took over the troubled lender and the European Union approved 5.4 billion or $6.1 billion bailout and meet its capital shortfall of 8.1 billion.

However, the bank estimated return on equity of more than 10% in 2021 and the bank is looking to sell gross bad loans of 28.6 billion, of which 26.1 billion is securitized.

""It''s a conservative plan. We''re not shooting at unrealistic targets,"" and there is no Plan B. The bank managed to stay alive, and we negotiated the plan with the EU Commission line-by-line."" said chief executive officer Marco Morelli.

Booker Group Plc jumped 3.9% to 191.50 pence after the U.K.-based food wholesaler said sales in the first-quarter ending on June 11 increased 4% from a year ago and comparable sales advanced 4.2% while non tobacco sales surged 9.6%.

Ocado Group Plc increased 1.8% to 294.90 pence after the U.K.-based online grocery retailer reported group revenue in the first-half ending on May 28 surged 22.2% from a year ago to 713.8 million.

Net income in the period declined 10.6% from a year ago to 7.7 million from 8.6 million and diluted earnings per share dropped to 1.23 pence from 1.40 pence.

The grocery retailer said order volumes per week jumped 15.6% to an average of 260,000 orders but the average Ocado.com basket size value fell 1.4% to 108.45 while active customers soared 12.7% to more than 600,000 from a year ago period.

SIG Plc advanced 4% to 151.80 pence after the U.K.-based building products provider said group revenues in the first-half ending in June soared 8.1% from a year ago to 1.4 billion and comparable sales in the period increased 2.4%.

Mainland Europe comparable sales jumped 4.2% and benefitted from the recovery in construction markets, particularly in France.

Worldpay Group Plc tumbled 11.6% to 360.70 pence after the U.K.-based online and mobile payment services provider agreed to be acquired by the U.S.-based rival and credit cards processor Vantiv Inc for about 9.1 billion.

JPMorgan Chase decided not to participate in the deal.

Under the terms, the shareholders of Worldpay will receive 55 pence per share plus 0.0672 new Vantiv shares and are also entitled of cash dividend of 5 pence per share.

The deal would create a company with the combined market value of more than $20 billion.

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