Today’s market overview
European equities were up on early trading, as sentiment remained positive on news of the $8.6bn purchase of Ireland’s Elan Corp by US drugmaker Perrigo and the proposed merger of Omnicom and Publicis, which could herald a surge in M&A activity.
IC TIP UPDATES:
Rio Tinto (RIO) has reached a binding agreement for the sale of its 80 per cent interest in the Northparkes copper and gold mine in Australia to China Molybdenum Company for $820m (£532m). Meanwhile, Rio has had put on hold all work on an underground expansion of the Oyu Tolgoi copper mine in Mongolia after the government said parliament will need to approve financing for the project, which is expected to cost more than $5bn. On the operational front, Rio has increased its full-year copper production guidance by 25,000 tonnes after making swifter-than-expected progress with the recovery programme at its Bingham Canyon mine in the US state of Utah.
Chemicals business Croda International (CRDA) is set to acquire a 65 per cent stake in a China’s Sichuan Sipo Chemical Co., a natural speciality chemicals manufacturer, for a total consideration of £38.2m, including £8m of debt.
Range Resources (RRL) and Australian associate Citation Resources are finalising operational plans to re-enter two wells and drill up to six new wells on the Tortugas Salt Dome structure in Guatemala. The operator Latin American Resources expects the re-entry wells to each produce between 200 barrels and 300 barrels of oil per day.
US healthcare product provider Perrigo Company and Irish bio-tech specialist Elan Corporation (0M2W) have entered into a definitive agreement under which Elan will be acquired by a new holding company incorporated in Ireland (“New Perrigo”). The cash and scrip deal is valued at approximately $8.6bn (based on the closing price of Perrigo shares on 26 July 2013, ex Elan’s cash on hand).
Fuel cell developer AFC Energy (AFC) revealed that its low-cost electrode has hit 12 months of continued operation, marking a new endurance record as the electrode being tested at the firm’s labs in Surrey, UK, remained operational longer than 8,760 hours. The electrode is a key component of AFC’s alkaline fuel cells.
Salamander Energy (SMDR) announced the spud of the next well in its on-going exploration programme in Block G4/50, Gulf of Thailand. G4/50-5 is targeting oil in Miocene sandstones estimated to contain mean prospective recoverable resources of 16m barrels equivalent.
OTHER COMPANY NEWS:
A merger between France’s Publicis and America’s Omnicom has usurped WPP’s position as the world’s biggest marketing and advertising entity. The merger will create a multinational with nearly $23bn in revenues and a stockmarket value of $35bn.
The UK Treasury is expected to pledge special £2m in “blockbuster” funding to the Serious Fraud Office to back its investigation intoBarclays’ (BARC) emergency fundraising five years ago.
- Elan Is Said to Near Sale of Company With Perrigo in Lead (bloomberg.com)
- Futures Edge Down; Perrigo, Omnicom, Saks Announce M&A News (blogs.barrons.com)
- Perrigo to buy Elan for $8.6B, seeks tax savings (bostonherald.com)
- Perrigo to buy Irish drug firm Elan for $8.6 billion (hollandsentinel.com)
- Drugmaker Perrigo to buy Elan for $8.6 billion (bizjournals.com)
- Perrigo in $8.6 billion cash, stock deal for Elan (marketwatch.com)
- Perrigo to buy Elan for $8.6B, seeks tax savings (fresnobee.com)
- Perrigo to buy Elan for $8.6B, seeks tax savings (thenewstribune.com)
- Perrigo to buy Elan for $8.6B, seeks tax savings (charlotteobserver.com)
- Perrigo to pay $8.6 billion for Elan Corp. PLC of Ireland; establishing new platform for international expansion (mlive.com)