Rival brewers blow froth of merger deal
PERONI and Grolsch firm SABMiller saw its shares jump, after it agreed "in principle" to sell itself to rival Anheuser-Busch InBev in a £68 billion deal to create the world's biggest brewing business.
London-based SABMiller said its board was prepared to unanimously back AB InBev's proposed £44 a share bid – its fifth offer after already making approaches worth £38, £40, £42.15 and £43.50 a share.
SABMiller's shares raced 9 per cent higher, although the wider FTSE 100 Index was 29 points lower at 6342.3 as miners and commodity stocks once more fell into the red on fears over China's slowing economy.
Germany's DAX and France's Cac 40 were both almost one per cent down. In New York the Dow Jones Industrial Average was just ahead in early trading.
In London, there was also some economic news as official figures showed inflation in the UK dipped back into negative territory last month after falls in the prices of food and petrol and offset rises for new fashions.
The Consumer Prices Index (CPI) rate of inflation fell from zero in August to minus 0.1 per cent in September.
The pound fell a cent against the US dollar to just over 1.52, and a cent against the euro at 1.34 as experts said the inflation data pushed back the prospect of an interest rate hike into the middle of next year.
In London, SABMiller was the biggest gainer in the top flight – up 326.5p to 3948p – as it edged closer to a mega-merger with Belgium-based Budweiser brewer AB InBev.
But its share price remains below Belgium-based AB InBev, with traders concerned that the global antitrust regulators may derail the deal.
The two groups still have to agree the terms of a formal offer, but have extended the deadline by two weeks to October 28 for AB InBev to make a firm bid under City takeover rules.
Banking giant Barclays was also in the spotlight following reports it is poised to appoint former JPMorgan investment banker Jes Staley as its new chief executive.
The move comes after Barclays sacked former boss Antony Jenkins in July for lacklustre revenue growth and a flat share performance.
But investors gave an initial cool response to the plans, with Barclays shares 2 per cent or 5.2p lower at 251.4p amid wider falls in the banking sector.
Royal Mail was also sharply lower – off almost 4 per cent or 19.7p to 452.5p – after the government offloaded its final 13 per cent stake in the group at 455p per share for just over £591 million.
And payments processor Worldpay became the biggest flotation in the City this year when it listed on the London Stock Exchange at a value of £4.8bn.
Stock in the firm was initially offered at 240p a share, after its private equity owners Advent International and Bain Capital sold about a 51 per cent stake in the business. Shares jumped more than 10 per cent, or 17p to 265p.
The biggest risers in the FTSE 100 Index were SABMiller up 326.5p at 3948p, Inmarsat up 15.5p at 931.5p, Carnival up 56p at 3390p and Persimmon up 32p at 1968p.
The biggest fallers in the FTSE 100 Index were Royal Mail down 19.7p at 452.5p, Tesco down 7.8p at 194.1p, G4S 8.7p at 247.9p and Standard Chartered down 23.9p at 738.8p.