SoftBank look to merge Line Corp and Yahoo Japan

Ishen Patel
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SoftBank look to merge Line Corp and Yahoo Japan

Japanese finance firm SoftBank Corp (TYO: 9984) have updated shareholders on the potential of a merger deal with internet unit Yahoo Japan (TYO: 4689) and messing app operator Line Corp (TYO: 3938).

Shares of SoftBank are 1.64% to the good, trading at JPY 4,330. 18/11/19 11:07BST.

The move by SoftBank looks to develop a $30 billion tech titan, to compete with firms such as Rakuten (TYO: 4755) and Amazon (NASDAQ: AMZN).

The deal would merge two of Japan’s biggest QR code payment services, and give a chance for SoftBank to access a huge consumer base.

SoftBank could exploit up to 164 million line users, and their data consumption habits in Japan and the wider Southeast Asian market.

The deal comes as SoftBank Group founder Masayoshi Son battles to restore his reputation after a disastrous investment in office-sharing firm WeWork.

“In the case of WeWork, I made a mistake,” he told investors at a news conference in Tokyo. “I won’t make any excuses. It was a very harsh lesson.”

The merger is driven by the two companies’ “sense of crisis” over the rise of tech giants from the U.S. and China, Line CEO Takeshi Idezawa told a news conference, wearing a tie in Yahoo Japan’s red corporate colour.

The companies are looking to agree a concrete plan in the next month, with will see SoftBank and Naver (who own Line) start an equally owned business in a 50:50 deal

SoftBank’s shareholders will be relatively pleased with the plans to merge the two firms, as this should expand their foothold in the market where competitors have seen slumps. Of note, HSBC (LON: HSBA) and Lloyd’s (LON: LLOY) have experienced slumps in their respective third quarter updates, at a time where the global finance industry has been brutal to all businesses irrespective of market cap. Certainly the move from SoftBank is one of bold statement and will give competitors something to think about considering the potential size of the newly formed company.

Diploma lift final 2019 payout causing shares to rally

Ishen Patel
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1
Diploma lift final 2019 payout causing shares to rally

Diploma PLC (LON: DPLM) have seen their shares rally after they lifted the final payout for financial 2019.

Shares of Diploma rallied 3.41% on Monday to trade at 1,759p. 18/11/19 10:49BST.

Diploma reported strong double digit growth in revenue and earnings, which sparked shareholder optimism.

The company, which supplies seals, filters, specialised wiring and fastners, also said its remains confident of making further progress in the current financial 2020 as moderately lower underlying growth will be offset by a strong contribution from acquisitions.

The FTSE250 (INDEXFTSE: MCX) listed firm reported a strong 15% rise in pretax profit for the year ending 30 September.

Profit rose from £72.7 million to £83.5 million, which gave the chance for Diploma to lift their final 2019 payout.

Diploma added that revenue increased 12% year-on-year to £544.7 million from £485.1 million, comprising 5% underlying revenue growth, a 5% contribution from acquisitions and a 2% currency benefit.

Of note, the firms Life Sciences and Control unit delivered revenue growth of 7% and 9% respectively, two sectors which Diploma pledged to grow.

“Diploma has delivered another strong set of results with double-digit revenue and earnings growth in the year. We were also delighted to welcome four new businesses into the group, all of which are strategically important and have exciting prospects. The political and economic outlook remains uncertain, but I am confident our resilient business model will support a consistently strong performance again in the year ahead,” Diploma Chief Executive Johnny Thomson said.

Thompson concluded “Our plans are about continuity, building on the strong foundations of our value-add distribution model, focusing on the development of the organisation’s capability to deliver that model at scale and focusing on the significant growth opportunities in our core markets and products.”

Diploma recommended a 15% increase in its final dividend to 20.5 pence per share, with the total annual payout up 14% to 29.0p from 25.5p last year, which will certainly please shareholders.

In a time where competitors such as Integra Lifesciences Holdings Corp (NASDAQ: IART) and Liminal BioSciences Inc (TSE: LMNL) have seen positive trading periods, the results will be even sweeter for the FTSE250 listed firm.

Battle of the Christmas adverts

Dina Caruso
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3
Battle of the Christmas adverts
Last week, John Lewis & Partners, together with Waitrose & Partners, released their Christmas advert featuring the character #ExcitableEdgar. However, the John Lewis Partnership is not alone in releasing a yearly heart-warming advert ahead of the festive season. We’ve taken a look at what other retailers have produced this year to get consumers excited for Christmas, even if it is still only mid-November. At the start of November, Marks & Spencer (LON:MKS) released its advert which features a cast dancing about to House of Pain’s Jump Around, all in Christmas jumpers. [youtube https://www.youtube.com/watch?v=IH7Htz_oY3Q] Meanwhile, Argos renamed its catalogue to ‘The Book of Dreams’ as a father relives his childhood dreams and plays on a drum kit alongside his daughter. [youtube https://www.youtube.com/watch?v=7GjeHzrn8jg] Sainsbury’s (LON:SBRY) goes back in time with its advert, back to when the British supermarket chain opened its first store: [youtube https://www.youtube.com/watch?v=ak5HEPpubhk] Like Sainsbury’s, Tesco (LON:TSCO) also takes a trip back in time and looks at 100 years of Christmas deliveries through history: [youtube https://www.youtube.com/watch?v=ocIEskQuKOA] The health and beauty retailer Boots tries to help viewers find the perfect gift for their friends and family: [youtube https://www.youtube.com/watch?v=jVmxzBTKd3M] The fast food chain McDonald’s (NYSE:MCD) asks viewers if they’re #ReindeerReady and embarks on an adventure with a little girl and her reindeer, beginning as an animation and then transforming into real world events. [youtube https://www.youtube.com/watch?v=v1wXIVYb49E] Each of the adverts help to excite consumers ahead of the busy festive trading period, where sales are more important than ever for the retailers. Which is your favourite?

Xerox continue to pursue HP merger

Ishen Patel
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0
Xerox continue to pursue HP merger

HP Inc (NYSE: HPQ) have said that they are considering a potential move with rival Xerox Corp (NYSE: HPQ) after an initial bid was rejected a few weeks prior.

After it was reported that a $33.5 billion cash and stock acquisition offer from Xerox was rejected, HP have seen to be more open to the move.The original offer put in seemed to significantly undervalue HP, but Xerox have looked to revive their interest.

This comes at no surprise after it was reported that Xerox had sold its 25% stake in Fuji Xerox, its partner firm with Fujifilm Holdings Corp (TYO: 4901).

“With substantive engagement from Xerox management and access to diligence information on Xerox, we believe that we can quickly evaluate the merits of a potential transaction,” HP said in its statement.

Xerox are yet to comment on the situation, but it does add pressure onto Xerox to submit a higher bid for HP to finalize a deal which would give Xerox a wider market presence.

HP on Sunday published Xerox CEO John Visentin’s Nov. 5 offer letter to HP, in which he stated that his company was “prepared to devote all necessary resources to finalise our due diligence on an accelerated basis.

Xerox offered HP shareholders $22 per share, including 0.137 Xerox shares for each HP share according to Visentin’s letter.This would have resulted in HP shareholders owning 48% of the combined company.

Shares in HP have rallied modestly by 0.25% to trade at $20. 18/11/19 10:36BST.

Xerox scrapped its $6.1 billion deal to merge with Fujifilm last year under pressure from Icahn and Deason.

HP was once a pinnacle of American technology, but the rise of smart technology and the power of firms such as Apple (NASDAQ: AAPL) and Samsung (KRX: 005930) have taken business from HP. It seems that the proposed move from Xerox will allow HP to reinvent their brand in an increasingly competitive market, where HP have seen falling sales in their laptops and computer hardware. Whether the move is finalized is yet to be seen but where HP seemed initially reluctant, the benefits are apparent and HP should take the chance when they can.

Aviva determined to turn Singapore operations around

Ishen Patel
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2
Aviva determined to turn Singapore operations around

Aviva (LON: AV) have given shareholders a deterministic update regarding their overseas operations.

Shares in Aviva crashed 3.98% on Monday to 417p. 18/11/19 10:12BST.

Aviva Plc informed shareholders on Monday that they would continue to sustain operations in Singapore.

The FTSE100 (INDEXFTSE: UKX) listed firm made the announcement after a thorough review was made for its Singapore business sector.

The big insurance firm reported that it had looked at selling off the business, after the board confirmed that offers had been received.

Bloomberg reported that rival companies MS&AD Insurance Group (TYO: 8725) and Manulife Financial Corp (TSE: MFC) were two parties who were flirting with a possible deal, with the sale process entering latter stages.

Another party reported to be in the race for the Singapore division of Aviva was FWD Group, however this deal seems to have hit a stalemate.

Also on Monday, Aviva confirmed that its joint venture in China will be retained, given the scale of the market, “excellent” relationship with its partner China Oil & Food Corp and the high growth prospects.

“Aviva’s Singapore and China business units delivered double digit operating profit growth in 2018 and are earning attractive returns. Both countries are expected to pay dividends to group centre in 2019,” the company said in its statement Monday.

This followed a mixed interim update which saw profits from its core life insurance arm decline 8% to £1.3 billion while those from general insurance were up 29% to £391 million.

The firm concluded by saying it is continuing to explore strategic options for its operations in Hong Kong, Vietnam and Indonesia, with its respective partners in each country.

The plan to retain this sector follows an Asian business review which was led by new CEO Maurice Tulloch, and despite the potential takeover offers Aviva seem optimistic about their confidence to turn operations around.

In tough market conditions, competitors such as Lloyd’s (LON: LLOY) have seen a slump in their third quarter profits which will concern shareholders.

UK property market hit by election uncertainty

Dina Caruso
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UK property market hit by election uncertainty
The price of property coming to market fell by 1.3% this month, new data revealed on Monday. Meanwhile, there were 14.9% fewer new sellers than in the same period a year prior, Rightmove’s House Price Index revealed, the largest year-on-year drop since August 2009. The report said that sellers were deterred by bleak price growth and the prevailing uncertain political climate. Indeed, the nation has been granted yet another extension to its deadline to leave the European Union, only prolonging the period of political uncertainty. Parties now prepare for the general election to be held later this year on the 12th December. “A seasonal slump in asking prices is always to be expected at this time of year, but the drastic reduction in the number of homes on the market indicates that many sellers have already gone into home selling hibernation,” Director of Benham and Reeves, Marc von Grundherr, commented on the figures. “With next month’s election, many sellers will no doubt choose to remain there until the dust of political uncertainty has settled in the New Year, despite buyers continuing to tough it out,” the Director of Benham and Reeves continued. “As always, regional differences are apparent with the East Midlands the only area to buck the month on month trend of a fall in asking prices, while on an annual level we continue to see notable swings in growth across the nation.” “This is largely down to affordability in tough market conditions and the price sellers are willing to accept with the less affordable areas seeing the largest adjustments in order to secure a buyer.” Marc von Grundherr said: “London continues to see some of the largest annual declines in price but the granular nature of the capital’s property market means that not everyone is feeling the chill. While the market has frozen over in some boroughs, others are performing well and the varied nature of the London landscape is evident in a seven percent monthly swing between Tower Hamlets and Haringey. A one percent difference for every mile between them.” As the nation braces itself for the upcoming general election, uncertainty prevails for the UK property market.

CentralNic’s new Team

Andrew Hore
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0
CentralNic’s new Team

Domain name services provider CentralNic (LON: CNIC) has improved its quality of revenues through recent acquisitions and the latest purchase will widen the range of products and services that can be offered to customers. The deal is also earnings enhancing.
Team Internet is being acquired from Matomy Media, which is short of cash and that might explain the attractive purchase price of $48m, predominantly in cash but including some shares.
Munich-based Team Internet (www.teaminternet.com) provides services that enable the owners of domains to generate revenues and a platform that enables them ...

Urban Exposure restructuring proposals

Andrew Hore
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0
Urban Exposure restructuring proposals

Property development finance provider Urban Exposure (LON: UEX) says that it has had a number of additional approaches since the Robert Tchenguiz-backed R20 restructuring proposals were announced.
Tchenguiz built up a 12.6% stake before and after the interims in September. R20 criticises the structure of the group and management costs.
At 61.5p, the share price has bounced back in the past two months, but it remains well below the flotation level and at a 28% discount to NAV of 85p a share, including 29p a share in cash.
The AIM flotation in May 2018 raised £144m after expenses and a similar a...

Spirent Communications shares spike after positive update

Ishen Patel
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1
Spirent Communications shares spike after positive update

Spirent Communications Plc (LON: SPT) have seen their shares spike after a positive trading update released on Friday.

Shares of Spirent spiked 4.33% to 217p after the pleasing report. 15/11/19 14:19BST.

The FTSE250 (INDEXFTSE: MCX) listed firm did not change their annual expectations after a solid third quarter performance.

The telecoms firm also reported positive 5G and high speed internet testing, where all firms in the market look to upgrade their services.

Eric Upydyke took over as Chief Executive in May and is currently restructuring operations and management at the firm.The changes outlined included a focus on recurring revenue, senior board changes and the development of sales and marketing campaigns.

The Networks & Security sector saw robust growth year on year, which was driven by US Government spending on Spirent’s positioning products.

Updyke said: “I see an ever-increasing number of market opportunities for our technologies but we need to move faster to capture the full opportunity. To ensure that we can best take advantage of these, we are focusing on building more recurring revenue streams over time and to do this we have augmented our experience and capabilities with some new senior leaders. We are also evolving the organisation to further improve the effectiveness of our sales and marketing investment whilst investment in future technologies is undiminished to underpin planned growth.

“We are on track to show full year progress on 2018 with, as in previous years, revenue and earnings performance weighted to the second half of the year and in particular to the final quarter. Our expectations for the full year remain unchanged.”

In a time where competitors have seen mixed headlines, shareholders of Spirent will be pleased.

Vodafone (LON: VOD) reported an interim loss earlier this week, and BT (LON: BT.A) hit headlines as Labour proposed to nationalize the firm as part of its election manifesto.

Roche acquire US based pharmaceutical company Promedior

Ishen Patel
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3
Roche acquire US based pharmaceutical company Promedior

Swiss based Roche Holding Ltd Genussscheine (SWX: ROG) have announced that they have acquired US drugmaker Promedior in an update on Friday.

With this acquisition, this will allow Roche to increase their expansion into the US market, and access to a huge pharmaceutical market.

Promedior are a biotechnology company based in Lexington, Massachusetts and have specialisms in medication for lung conditions.

The deal comes at a good time for Roche, where competitors have reported strong trading updates in the previous quarter.

US titan Pfizer (NYSE: PFE) smashed market and analyst expectations in their most recent update, whilst GSK (LON: GSK) lifted their annual profit forecast back in October.

The formalities of the deal are yet to be announced, however it is reported that the deal could cost up to $1.4 billion. Completion can be expected within the early months of financial 20.

The deal includes a payment of $390 million, plus the potential for $1 billion further terms are fulfilled.

Jason Lettmann, Chief Executive Officer of Promedior and General Partner of Lightstone Ventures, said: “With over a decade of research, development and investment, Promedior has demonstrated the unique ability of its pentraxin-2 platform to deliver disease-modifying potential in fibrotic disorders. Due to Roche’s strong expertise in IPF, hematological cancer and other fibrotic disorders, we believe Roche is ideally positioned to bring the potential of our platform to patients and provide new treatment options within these areas of urgent unmet medical need.”

“We are excited to combine Promedior’s portfolio with our drug development capabilities to further advance PRM-151 in fibrotic diseases, including IPF and MF,” said James Sabry, M.D., Ph.D., global head of Roche Pharma Partnering. “With our proven track record in IPF with Esbriet™ as well as in hematological cancers, we are well-positioned to leverage our clinical and commercial expertise to bring PRM-151 to patients as fast as possible.”

In a time where the pharmaceuticals industry is becoming increasingly competitive, firms are merging to combat domination of the big players as seen with Roche. One other notable deal is the merger of UCB (EBR: UCB) and RA Pharma (NASDAQ: RARX) which was agreed a few weeks back.
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