Premarket London: Phoenix Buys Swiss Re Arm; ABF's Sugar Rush
- Here is a summary of the most important regulatory news releases from the London Stock Exchange on Friday, 6th December. Please refresh for updates.
Phoenix Group (LON:PHNX) said it has agreed to buy the U.K. life insurance business of Swiss Re AG (SIX:SRENH) for a total consideration of 3.2 billion pounds ($4.2 billion) in an all-share deal, making the biggest consolidator of the life and pensions business in Europe.
Swiss Re will get a stake of between 13% and 17% in the enlarged group, depending on Phoenix’s share price at the time of completion.
Phoenix, which specializes in buying back books of life insurance and annuity policies, said the assets of ReAssure will generate approximately 7 billion pounds in cash flows over time, of which 2.7 billion pounds will come by the end of 2023.
ReAssure has 4.1 million policies with assets under administration of 84 billion pounds. The transaction price represents a discount of 9% to ReAssure’s Own Funds of 3.5 billion.
Phoenix said its expects synergies of 800 million pounds, net of 50 million pounds in integration costs. The deal will support a proposed 3% increase in the final dividend.
Primark is set to be outshone for once by the other half of Associated British Foods (LON:ABF) over the next 12 months.
Chairman Michael McLintock will tell the company’s annual shareholder meeting that the traditional sugar and grocery businesses are both on course for strong years, sugar benefiting from the upturn in commodity prices in the EU over the previous year, and Twinings benefiting from a more efficient tea supply chain.
Primark, meanwhile, is likely to see its profit margins fall slightly, as a weaker pound bumps up purchasing costs, offsetting the benefit of overhead reductions.
McLintock will reiterate the company’s guidance for a modest increase in adjusted earnings per share this year and will also say that the group is now fully prepared for Brexit.
Homebuilder Berkeley Group (LON:BKGH) said profit before tax fell 31% to 276.7 million pounds in the six months to the end of October, in line with estimates, reflecting fewer completions and a slight drop in average selling prices.
Berkeley sold 1,389 homes in 2019 with an average selling price of 644,000 pounds, down from 2,027 homes in 2018 with an average selling price of 740,000 pounds.
Publisher Relx (LON:REL) said it will sharply cut the volume of share buybacks next year to 100 million pounds after completing a 600 million-pound program for 2019.
Relx also said it had cancelled 33.3 million of the 75.6 million shares it was holding in treasury. The share count is thus reduced to 1,938,439,225.
The company said it’s on track to meet its full-year commitment to total shareholder returns of 280 million pounds.
- Publisher Relx (LON:REL) said it will sharply cut the volume of share buybacks next year to 100 million pounds after completing a 600 million-pound program for 2019.
- Relx also said it had cancelled 33.3 million of the 75.6 million shares it was holding in treasury. The share count is thus reduced to 1,938,439,225.