The THG board have cut off discussions with Apollo, sorry shareholders you are now having to be in it for the long slog, but don’t worry other bidders could still be around.

As if by magic, within hours of yesterday afternoon’s article being published, we have a statement today from THG (LON:THG).

The beauty and nutrition internet retailer has announced that it was not seeking an extension to the discussions with Apollo Global Management and it has now terminated all discussions with the potential bidder.

Does that mean that Apollo Global Management, the US-based fund manager, has walked away?

I would think not, as yet, because it obviously did have some concrete plans for the future progress of THG, so it would not, in my opinion, have just upped its THG sticks and just walked away.

Apollo made an indicative proposal, which was THG considered to be on an ‘inadequate valuation’.

So, what will it do now?

We now know, from THG’s own lips, that the company has had several publicly and other private offers for the company.

It has rejected those upon similar grounds to its rejection of the Apollo approach.

I do not think that Apollo will walk away, nor will any of the other potential suitors.

They all have irons in what could prove to be a very hot fire.

The question is who will move first?

I bet the weekend press will commit column inches by the score to discussing the whole situation.

So THG could still be considered to be in play.

The shares fell to a 55p low this morning before quickly bouncing back to 67p.

Are they going to gain further ground?

Without any doubt my answer is that they will be recovering very soon.

The FTSE 100 slipped on Thursday after the Bank of England hiked rates and set out their revised forecast for the UK economy.

As expected, the Bank of England raised rates by 0.25% to 4.5%. However, the market-moving elements of the bank’s instalment were their UK economic forecasts and press conference. The prospect of additional rate hikes this year curtailed demand for UK risk assets.

The FTSE 100 was down 0.34% at the time of writing during the Bank of England’s press conference.

The BoE now expects the UK economy will avoid a recession but still sees persistently high inflation levels through the rest of 2023. The bank sees sharp drops in inflation this year, but with inflation currently in double digits, inflation will still be significantly higher than their 2% target.

“Sticky inflation means the Bank of England has once again turned to its weapon of choice in hope of stamping out the inflationary pressures the economy is facing,” said Rachel Winter, Partner at Killik & Co.

Winter continued to explain markets are predicting further interest rate hikes later this year – a contrast to the current trajectory for rates in the US.

“While the Federal Reserve recently indicated that it was ready to hit the pause button on rate hikes in the US, markets in the UK are currently pricing in a peak of 4.85% in September.”

GBP/USD fell despite the bank predicting 0.25% growth in 2023 – and will avoid a recession. In February, the bank had predicted a 0.5% contraction in 2023.

FTSE 100 movers

Airtel Africa was the FTSE 100 top faller after reporting 2022 full-year results. Investors were disappointed with falling earnings due to currency fluctuations. Airtel Africa shares were down 7% at the time of writing.

Rolls Royce slipped as the defence and aviation firm kept guidance for the year unchanged. Roll Royce shares were down 5% on Thursday but are still up 58% on the year.

Miners were under pressure as concerns about Chinese demand for natural resources sapped interest in the sector. Rio Tinto, Anglo American and Glencore were down between 2%-3%.

ITV

Former FTSE 100 constituent ITV’s hopes of being promoted back to London’s leading index were dealt a blow after poor trading in Q1.

ITV was down 4.5% after its Q1 2023 trading update was released. The media group said sales faltered in the period, primarily due to lower advertising revenue.

“TV advertising faces both a structural challenge, as the audience for linear television declines, and a cyclical challenge as companies trim their advertising spend thanks to an uncertain economic outlook,” said Russ Mould, investment director at AJ Bell.

“This was reflected in free-to-air broadcaster ITV’s first quarter trading update which, not unexpectedly, showed a big decline in advertising revenue and signalled a weak showing on this front in the current quarter too.

“Advertising spend on its digital platforms is proving more resilient but not sufficiently so that it can make up for the drop off elsewhere.”

ITV’s shares need to rally by around a third to be in contention for promotion to the FTSE 100.

On Thursday, Rolls Royce issued their Q1 2023 trading update and provided insight into recent sales activity and outlook for the rest of the year.

Rolls Royce said they were keeping operating profit guidance of £0.8-£1.0bn and free cash flow guidance of £0.6-£0.8bn unchanged.

The company noted its civil aerospace business unit was approaching pre-pandemic levels and several awards in their defence unit. Rolls Royce alluded to progress in their transformation strategy and robust customer demand.

Despite reasonable operational progress, Rolls Royce shares were down 3.5% at the time of writing on Thursday following the release.

Analysts suggested the new CEO’s honeymoon period was coming to an end, and investors took the opportunity to book profits after a strong run in the stock.

“Tough talk which suggested he got the seriousness of the challenge facing the company and a decent first set of numbers took new Rolls-Royce CEO Tufan Erginbilgic a long way with the market,” said Russ Mould, investment director at AJ Bell.

“However, today’s trading update saw the first sign of investors taking a tougher line.

“There was nothing to really frighten the horses, trading is in line and the company’s key aerospace business is mirroring the recovery in the wider aviation sector to edge back towards pre-pandemic levels.

“A fall in the share price may just have represented some profit taking after an exceptionally strong run for the stock, but there were some less than positive hints in the statement.”

Mould continued to explain the lack of news on their new business segment, which includes small modular reactors, as another possible reason for investor disappointment.

“Perhaps most significantly there was nothing on the company’s New Markets business – which encompasses its investments in areas like small modular reactors (seen as a cheaper and quicker way of developing nuclear power) and electrical aviation.

“On this front, recent news the development of small modular reactors in the UK will be put out to public tender was a blow for Rolls. Its participation in this process was seen as a potential slam dunk but now international rivals could swoop in and take a piece of the action.”

ITV shares were weaker on Thursday as the UK media giant revealed advertisers reduced spending in the first quarter and their studio’s business flatlined.

ITV’s total external revenue for the first quarter fell 7% to £776m with media and entertainment revenue sinking 9%. Their studio’s business revenue was flat at £457m.

Total advertising revenue for the period fell 10% to £419m.

“ITV’s first quarter held few surprises. Double digit declines in advertising revenue were expected, but these are due to get worse in the new quarter. That reflects the very real challenges that come with relying on above-the-line spending during times of economic stagnation,” said Sophie Lund-Yates, lead equity analyst at Hargreaves Lansdown.

Although the wider media and entertainment unit’s revenue fell, the new streaming service ITVX continued to build momentum and total digital revenue rose 29% while total streaming hours through the service were up 49% in Q1.

“ITV is throwing a lot at its digital transformation, and digital advertising revenue is proving more resilient. However, this isn’t enough to stem losses elsewhere, showing how deeply rooted ITV still is in traditional broadcasting,” Lund-Yates said.

“Studios revenue is on track to deliver mid-single digit revenue growth. This area of the business is sitting on a well of future demand thanks to the huge swell in appetite for content from other providers. There are tricky elements to deal with in content creation though. It’s a very tough business in which to inflate margins, and is a large reason ITV’s operating profit expectations have been dialled back.”

ITV shares were 4.5% weaker at the time of writing.