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Glaxo, Kier, Intu, Thomas Cook and other news
Pharmaceuticals giant GlaxoSmithKline (GSK) suffered a big fall in its share price on 3 December after announcing the $5.1bn acquisition of US cancer drug maker Tesaro.
Glaxo offered a premium of 62% to Tesaro’s previous closing price; shares in the latter have been weak amid doubts over the prospects for its flagship ovarian cancer drug Zejula.
The FTSE 100 constituent does not expect any contribution to profit until 2022 from Tesaro and warned the purchase would instead weigh on earnings in the coming two years.
The company also announced the sale of malted milk drink brand Horlicks to Unilever (ULVR) for $3.75bn.
In the property and construction space shopping centre investor Intu Properties (INTU) fell sharply after a consortium led by near-30% shareholder Peel, chaired by Intu’s deputy chairman John Whittaker, together with Canadian real estate investor Brookfield and Saudi Arabia’s Olayan, scrapped plans for a £2.8bn takeover (29 Nov).
Construction and infrastructure firm Kier (KIE) surprised the market late on the afternoon of 30 November by announcing a heavily discounted £264m rights issue to shore up its balance sheet. Some analysts are concerned it isn’t raising enough money.
Travel operator Thomas Cook (TCG) remained in freefall as speculation mounted it would need its own cash call in the wake of the profit warning issued on 27 November. The shares are now down around 60% since the warning at 20.2p, a six-year low.
Better-than-expected full year results from soft drinks firm Britvic (BVIC) helped boost its share price on 29 November. Investors reacted to guidance that already impressive levels of cash flow will increase ‘materially’ in 2019 as investment in the business reduces to more normal levels.
The company, which owns brands such as Fruit Shoot and J20 as well as producing and distributing PepsiCo brands in the UK, chalked up healthy organic revenue growth of nearly 3% in the 12 months to 30 September.
Refractory products firm RHI Magnesita (RHIM) advanced after exciting investors and analysts at a site visit on 28 November with its plans for a big efficiency drive driven by a cut in its number of global manufacturing plants and increased use of automation.
Elsewhere flooring seller Victoria (VCP:AIM), historically an AIM star but tarnished of late by margin pressure, saw executive chairman Geoff Wilding buy £4.9m worth of stock. (TS)