British electrical engineering company Aveva (LON:AVV) has called off its proposed merger with Schneider Electrics (EPA:SU) due to unsurmountable costs and risks.
Aveva’s board announced this morning that “following a period of extensive due diligence, the Boards of AVEVA and Schneider Electric have been unable to reach agreement and discussions have been terminated by mutual consent.” Aveva’s chief executive Richard Longdon said the negotiations had taken too long, and had effectively “killed the deal.”
The £1.3 billion reverse takeover would have involved Aveva acquiring Schneider’s software arm, in exchange for a majority stake in Aveva. However, after six months of negotiations, the complex deal was found to be too costly. Schneider said in a statement that “The two parties have decided to stop their discussions by mutual consent as no agreement could be reached on the terms of transaction.”
Shares in Aveva have taken a big hit on the news, trading down 33.8 percent at 1434 pence per share. Schneider have remained firm, however, up 0.69 percent. (1005GMT)
UK property prices have consistently increased over the last six months, driven by chronic under supply and improving demand.
However, the government has shaken up the Buy-to-let market by increasing stamp duty, leaving investors questioning whether a Buy-to-let is the best way to benefit from the UK’s booming house prices.
This report explores how equity investments are an attractive alternative to buying a property and outlines specific stocks which are set to benefit from the favourable UK property market.
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Chinese internet giant Alibaba Group have agreed to acquire Hong Kong’s English-language paper the South China Morning Post, in a deal worth $266 million.
Like most written publications, the newspaper has been suffering from falling circulation as it tries to adapt to the growing online market, and SCMG Group have said that they hope the sale to Alibaba will “unlock greater value” from the paper.
However, there have been concerns over the future of the paper’s editorial independence; The South China Morning Post has a reputation for reporting on issues censored by mainland China, and Alibaba group’s close connections with Beijing have been brought into question. Alibaba’s Executive Vice Chairman Joe Tsai dismissed suggestions Alibaba would compromise the newspaper’s editorial independence, but said the world needed “a plurality of views when it comes to China coverage”, and adding that Alibaba purely aimed to utilise technology expertise to develop the paper.
Education software company Tribal Group (LON:TRB) saw shares fall by over 50 percent this morning, after issuing a disappointing trading update.
The company said that sales momentum had been slow this year, with several contracts taking longer than expected and therefore being moved into 2016, causing a hit to year-end profit.
As shares continue to fall, Tribal announced that the group will remove their listing from the Official List and apply to trade on the AIM market instead.
Richard Last, the Group’s Chairman, said in a statement:
“Despite considerable effort, a number of larger customer programmes have moved forward more slowly than previously anticipated, resulting in increased delivery costs, and recognition of related revenues will be deferred beyond the current financial year.
“We have therefore announced today that the Company proposes to launch a rights issue to raise up to £35 million, the proceeds of which will be primarily used to reduce debt, and for working capital.
“Additionally, the Company is proposing to apply for admission to AIM. AIM is a market appropriate for a company of Tribal’s size, and it offers greater flexibility with regard to future transactions.”
Tribal provide software and services to the education management market, including student management software and performance improvement solutions to universities, colleges and schools, both in the UK and internationally. The Group are currently trading down 54.94 percent at 24.50 pence per share. (0829GMT)
The merger between oil giants Royal Dutch Shell (LON:RDSA) and BG Group (LON:BG) has been given unconditional clearance by China, completing the pre-conditional approval process.
The merger is said to be worth $70 billion, and the merged company would supply around 30 percent of China’s natural gas imports by 2017.
Shell CEO Ben van Beurden said in a statement: “We will now seek approval from both sets of shareholders as we move towards deal completion in early 2016.”
However, shareholder approval has been called into question of late, after one of the company’s biggest stakeholders Qatar Investment Authority sold off shares in both companies worth nearly £1 billion. The QIA, led by the Qatari royal family, is one of Shell’s biggest investors with a 4.88 percent stake.
Shell have seen their share price fall by by 25 percent since announcing its bid for BG in April, with shares in BG Group falling 17 percent. Initially CEO Van Beurden said oil price needed to be around $67 a barrel in 2016, $75 in 2017 and $90 by 2018 for the deal to be sustainable; however, the price of Brent crude is currently around $43 a barrel and the company are pushing on with the deal.
Royal Dutch Shell are currently trading up 0.83 percent at 1465.61 pence per share, with BG group up 2.47 percent.
Attraction services firm Paragon Entertainment (LON:PEL) is one of the biggest movers on the AIM market this morning, with shares falling over 20 percent following a board update.
The company have withdrawn Resolutions designed to ensure that the company could meet legal guidance on issuing shares, after they were found to be insufficient.
Guidance for 2015 left the company’s EBITDA unchanged at £0.2 million, with 2015 turnover likely to be in the region of £8.5 million. Mark Taylor, Executive Chairman of Paragon Entertainment, said of the forecasts:
“The Paragon team has worked very hard to resolve a number of historical issues since Q4 2014 and I am pleased that these are behind us. We now have good visibility on our revenue which we expect to grow steadily and profitably over the forthcoming years.”
Paragon are an attraction services firm who work with the design, fit out and installation of themed attractions, heritage exhibits, museums, aquariums and water parks. Paragon have a 52 week range of between 1.25 and 3 pence per share, and is currently trading down 19.21 percent at 2.04. (1109GMT)
Clean water company MyCelx Technologies Corporation (AIM:MYX) is one of the biggest fallers on the AIM market this morning, losing over half of its market value after announcing its 2015 trading update.
The company confirmed in a statement that MyCelx had continued with its cost reduction measures and will be at least cash neutral from operations in the second half of 2015.
However, the reduction in revenue is expected to result in a post-tax loss in the region of $3.4 – 3.8 million.
MyCelx is a clean water technology company providing patented solutions for commercial industrial markets worldwide. It has a 52 week range of between 180 and 27.50 pence per share, and is currently trading down 46.15 percent at 17.50 pence per share.
Crude oil prices look set to continue throughout 2015 and into early 2016, according to analysts, as prices drop down to seven year lows.
Brent crude is down 0.96 percent at $39.73 a barrel, with Crude down 1.09 percent at $36.76 a barrel – just above Thursday’s low point, the worst since February 2009.
Oil has already lost a third of its value in 2015, as the relentless drop continues. The crisis, caused by increased output in the Middle East and a lack of demand, is expected to continue on into early 2016.
OPEC decided last week to continue to allow the current output level of around 31.5 million barrels a day to continue, causing prices to fall further this week. More oil was pumped in November than in any month since 2008, despite demand showing no sign of increasing.
The MPC have voted 8-1 to keep interest rates at their six-year low of 0.5 percent for another month, as speculation increases as to when they will be raised.
Rate-setters cited a fall in global oil prices and disappointing economic growth forecasts as the reason for keeping the central rate low. Governor Mark Carney again reiterated that it would not necessarily follow the Federal Reserve, who are expected to raise rates next week, saying that there was “no mechanical link” between the Bank’s thinking and that of the US.
Analysts have drawn on Carney’s hints and now expect rates to be raised in the third quarter of next year.
When you hear the word ‘Brazil’, the first things that come to mind are usually blue skies, white sand and exotic food. But investment opportunity? Not so much. However, according to the latest data compiled by the Post Office, the British Pound has risen by more than 42 percent against the Brazilian Real over the last 12 months – which could make it something worth considering.
The Real has been having a hard time of late, tumbling 31 percent this year alone. Carlos A. Primo Braga, a professor of international political economy at Switzerland’s IMD Business School, explained to CNBC that the Real “has experienced one of the most dramatic depreciations among currencies from emerging economies over the last 12 months”. However, for anyone looking to buy internationally, this could provide the perfect opportunity to buy property at a great price.
According to leading developer Ritz-G5, who operate in the North East region of Brazil, there has definitely been an increase in interest from overseas investors looking to make the most of the current exchange rate advantage.
Ritz-G5’s CEO, Luiz Fernandes, says now is the right time to make a move: “we strongly believe that now is a great time to invest in Brazilian property due to both lower property prices and considerably undervalued Brazilian real.’
“There is significant interest in Brazil coming from overseas investors. In particular, over the last 11 years, foreign direct investment (FDI) figures showed a dramatic surge amounting to a 516% increase in the period from 2003 to 2014, with FDI amounting to 62.4 billion USD in 2014.
“With Brazil’s large housing deficit still very much present, there remains plenty of scope for further growth in the property sector over the coming years.”
For the price, Ritz-G5’s developments certainly look more attractive than anything in the UK. One development is inspired by the Atlantic Ocean, Costa Azul or ‘Blue Coast’, and is a new luxurious 168-apartment development in Petrópolis, one of the most exciting districts in Natal, and close to some of Brazil’s best beaches for soaking up the South American sunshine.
Costa Azul apartment – lounge area
Complete with a bar, pool, gymnasium and spa, the development provides Costa Azul residents with an exclusive private retreat. Prices start from £43,028 for a 53m² unit, with apartments offering breathtaking views towards the Potengi River, the Atlantic Ocean and the Fort of the Three Wise Men, all fitted with contemporary décor and stylish appliances.
Costa Azul apartment
Another example of what money can buy in Brazil at the moment is its sister development, Majestic Village, which has recently won the highest 5-star award in the Best Mixed-use Development Americas category at the highly acclaimed Grand Final of the International Property Awards 2015. It has been built as a condo neighbourhood, surrounded by beautiful landscaped gardens, and include extensive facilities such as swimming pools, tennis courts and club, a children’s play area and a gym.
Looking to the future, analysts don’t see the Real staying low for long – the rate is likely to stay at a similar level for a just a year or two before rebounding. From an investment point of view, this could be the perfect time to make a move.
