- FTSE 100 closes 28 points above
- US stocks hold modest gains after recent mixed data
- BRC says UK retail sales growth slowed in May
4.45pm: FTSE 100 regains ground
At the close, the UK's blue-chip index settled at 7,628 points for a gain of 0.4% on the day.
The FTSE's rebound came even as BP and Shell weighed on markets due to weakness in oil and natural gas prices.
"It’s been a lacklustre trading session for European markets with higher rates and disappointing economic data weighing on sentiment throughout the day," CMC's Michael Hewson noted.
"On the plus side British American Tobacco shares are higher after today’s H1 trading update saw the company reiterate its full year guidance with new CEO Tadeu Marroco reiterating that there would be no change in the current strategy to reach £5bn of NGP revenues by 2025."
3.45pm: SPAC starts
Special purpose acquisition company (SPAC) Ashington Innovation PLC started trading on London's Main Market on Tuesday after an initial public offering (IPO), with its shares booking a premium on hopes of it buying a company in the technology sector.
In late afternoon trading, Ashington shares were at a mid-price of 4p having been issued at 3p. Last Friday, the company said it had raised gross proceeds of £809,437 via the issuance of 27.0 million shares. Its total share capital consists of 61.4 million shares.
Ashington said the IPO will help it to acquire a target company in the technology sector with a particular focus on fintech and deep tech sectors. It added that it has no specific expected target value for the acquisition, and said its prospective target business will not be limited to a particular industry or geographical area.
Among the criteria for a possible acquisition, Ashington will be looking to target companies that have a sustainable development or technological advantage, and "above average" business potential.
3.20pm: Action on Activision
Microsoft's president Brad Smith has met the UK finance minister Jeremy Hunt for talks and said he would try to work with regulators to seek UK approval for its $69 billion purchase of "Call of Duty" maker Activision Blizzard, Reuters reported, citing a government source.
UK competition authorities blocked the takeover in April in a shock decision which jeopardises gaming's biggest-ever deal, drawing a furious response from the two groups who questioned whether the country remained open to tech firms.
Microsoft has since appealed the decision. Smith was also scheduled to meet officials from the Competition and Markets Authority (CMA) during his visit to London this week, according to reports.
Smith criticised Britain after the CMA veto, saying it would shake confidence in the UK as a destination for tech.
The EU approved the Activision deal in May after it accepted remedies put forward by Microsoft that were broadly comparable to those it proposed in the UK.
Microsoft has also appealed the US Federal Trade Commission's action seeking to block the deal after the agency said it would suppress competition.
The UK appeal is due to be heard next month, with a verdict likely in August or September.
2.50pm: Wall Street consolidates
The FTSE 100 index pushed modestly forwards, hitting new session peaks even as Wall Street made a weaker start on Tuesday.
US investors were still digesting recent data that have increased fears about a recession and muddied the Federal Reserve rate hike picture.
Around 20 minutes after the New York open, the Dow Jones Industrial Average was down 70 points, or 0.2% at 33,491, while the broader S&P 500 index fell 0.1%, and the tech-laden Nasdaq Composite lost 0.2%.
Apple Inc shares were down more than 1% a day after the company unveiled its Apple Vision Pro, a spatial computer that merges digital content with the physical world. A company of that heft can move markets all on its own, said Keith Buchanan, senior portfolio manager at Globalt Investments.
“If you’re a $3-trillion company, the tail kind of wags the dog to an extent,” Buchanan said. “Apple, just given the sheer magnitude of its market cap, is going to have its way with most broader indices.”
2.30pm: A look at some of London's movers
Risers
Oxford Metrics PLC - 106p, up 8.7%: Shares jumped following a strong six-month performance - one that put it on track to exceed full-year expectations. The smart sensing software firm recorded its strongest-ever half-year revenue at £21.3mln, a 70% increase from the previous year. The company also posted a 1,263% rise in adjusted profit before tax, reaching £4.1mln.
Golden Metal Resources PLC - 7.13p, up 7.6%: Shares gained as it said the interpretation of results from a high-resolution induced polarisation (IP) geophysics survey at its Pilot Mountain Project in Nevada has revealed three significant undrilled exploration targets.
Croma Security Solutions Group PLC - 51.50p, up 8.4%: Shares jumped on news of a conditional agreement to sell its Vigilant Security (Scotland) Limited subsidiary to M&W Security Limited for £6.5mln, along with inter-company balances of £1.07mln. The sale aligns with Croma's strategy to focus on its higher-margin businesses, Croma Locksmiths and Croma Security Systems.
Fallers
Clean Power Hydrogen PLC - 22.5p, down 8.2%: Shares dropped following the termination of a licence agreement with GHFG Limited, due to what the company believes is a breach of contract by its erstwhile partner. The UK-based green hydrogen technology and manufacturing firm had signed an agreement with GHFG, a joint venture between international renewable independent power producer, Alternus Energy Group and Eric Whelan, CEO of Irish developer Soleirtricity
N Brown Group PLC - 24.2p, down 12%: Shares fell as the online retailer hinted “weaker confidence” could continue to weigh on performance, resulting in worse results for the current year. Reporting an 83% fall in pre-tax profit to £7.5mln for the year to 4 March 2023, alongside a 5% decline in revenue to £677.5mln, AIM-listed N Brown hinted problems are set to stay in full-year 2024.
Hellenic Dynamics PLC - 0.10p, down 34.9%: Shares plummeted following the announcement of major changes in the company's strategy. Adapting to the evolving European cannabis markets, Hellenic said it will no longer pursue the expensive process of EU Good Manufacturing Practices (EU-GMP) certification for its facilities as a number of operations of this kind now exist in its key markets.
2.15pm: Flowing away
Pennon Group PLC and Severn Trent PLC have both suffered share price target cuts by analysts at Deutsche Bank in light of a “challenging” backdrop for UK utilities
Pennon’s target was cut to 780p from 840p, while Severn Trent’s was reduced to 2,850p from 3,000p, with both seeing repeated ‘hold’ ratings.
Severn Trent and Pennon recently penned earnings in line with, and lower than expectations, respectively, the Deutsche analysts noted,
The analysts said they "still feel that the near-term backdrop for the sector overall is challenging,” with Ofwat’s 2024 price review likely “to be tough” in pushing water firms to implement climate policies.
An “anticipated 2024 election” could place further pressure on utilities, the analysts added, given “the media storm over storm overflows [and] regulatory investigations”.
1.00pm: Weak start expected across the pond
US stocks are likely to open lower on Tuesday as markets take a breather from a recent rally that pushed the S&P 500 to a nine-month high and digest latest data that have increased fears about a recession.
Futures for the Dow Jones Industrial Average (DJIA) fell 0.1% in pre-market trading, while those for the broader S&P 500 index contracts for the Nasdaq-100 also declined close to 0.1%.
The main US indices ended lower on Monday after ISM services data for May came in lower than expected at 50.3 points and as Apple’s latest augmented reality innovation failed to impress.
After climbing to within a whisker of its all-time high, the iPhone maker’s shares turned around to finish down after the launch of its new virtual reality headset, Vision Pro. That pushed the Nasdaq 0.2% lower to 13,229 points, while the DJIA shed 0.6% to 33,563 and the S&P 500 ended 0.2% down at 4,274 points after hitting its highest level since August 2022.
“US markets initially got off to a reasonably positive start but the disappointment over the May ISM services report tempered gains,” commented Michael Hewson, chief market analyst at CMC Markets.
“The weak nature of the ISM services report was in sharp contrast to other service sector numbers, raising more questions, than answers about the strength of the US economy, ahead of next week’s Fed meeting.”
With US central bank officials now muzzled until after next week’s rate decision, Hewson said markets now must reassess whether the Fed pauses next week, or whether it hikes rates by another 25 basis points.
“The odds still favour a pause even more so after yesterday’s ISM report, however, we still have next week’s CPI numbers to contend with,” he added.
12.58pm: RBC upgrades Anglo American
RBC Capital Markets has upgraded Anglo American to 'outperform' from sector perform making the case that the miner should be a "relative beneficiary" from improved sector sentiment, particularly as its operational momentum returns.
The broker also increased its price target to 2,700p from 2,500p.
RBC said Anglo American has had a tough past 12 months referring to a 25% slide in its share price over the past year.
"The company's previously near best-in-class operating track record posted forgettable results as challenges mounted, and large downgrades came through the December update,” it noted.
"South Africa risks have been rising and the company's lower free cash flow generation has hampered investor confidence,” RBC said.
“Compounding the recent share price fall was the sector surge from the China reopening thematic, which has pushed Anglo well ahead of fair value," RBC explained, adding that this has now "unwound."
RBC reckons while risk remains, that Anglo should be able to restore some of its operational stability. It highlighted to a ramp-up at Quellaveco in particular as aiding its "base case" of 7% growth for earnings before interest, tax, depreciation and amortization by 2025.
"Expectations on more Chinese real estate support may provide a short-term boost to sentiment and Anglo is well positioned to benefit from its amenable starting point," RBC added.
"We continue to see challenges to commodity demand and remain below consensus Ebitda by 10%, but we see unlevered Anglo American as providing a preferable exposure now that the sector is more reasonably priced."
Shares in Anglo American were little changed early afternoon while the FTSE 100 was down 17 points at 7,583.
12.33pm: Takeovers declined in first quarter - ONS
Takeovers involving UK companies declined over the first three months of the year, amid tough economic conditions and political uncertainty, according to provisional figures from the Office for National Statistics.
Foreign companies spent £12.7bn acquiring UK firms between January and March, £4.1bn less than during the same quarter last year, the ONS said.
However, it was £6.9bn more than during the previous quarter, between October and December, when the value of merger and acquisition activity dipped.
The appetite among businesses to buy other companies may have been affected by global economic uncertainty and Russia's war in Ukraine, the ONS suggested.
Many businesses put investments on ice in 2022 due to the more difficult conditions, including high inflation and rising interest rates, experts suggested.
Nevertheless, the total combined number of monthly mergers and acquisitions – both UK companies acquiring foreign companies and vice versa – was lower at the start of 2023 compared with last year.
There were 141 transactions in January, 100 in February, and 114 in March, whereas there were more than 150 transactions in each month throughout 2022, the ONS said.
11.59am: AB Foods deal welcomed
Shore Capital analyst Clive Black notes clearly, the acquisition by AB Foods of National Milk Records (AQSE:NMRP)
will bolster its presence in the UK dairy scene, where AB Agri states it works with around 2,000 farms.
He pointed out ABF’s agriculture business has also acquired in UK agri-consultancy and the equine market in recent times, so he thinks this is an “interesting albeit modest application of capital to what we deem to be a strategically important industry.”
“We would welcome an increase in such capital allocation given this view, noting Agriculture is more often than not under a bushel in the ABF arena that is dominated by Primark,” Black added.
He reiterated a buy stance on ABF, welcoming this deal, although he sees little impact to EPS forecasts.
11.31am: BAT new strategy faces challenges, doctors call for vape ban
Shares in British American Tobacco PLC (LSE:BATS) held firm against a falling market after its new CEO Tadeu Marroco confirmed he had no plans to rip up the current strategy.
Marroco said: “Put simply, smokers must have access to better choices. This is already a reality for smokers who have made the switch to our reduced-risk product."
“Our strategic aim is to progressively transform our portfolio by actively encouraging adult smokers to switch to less risky products, compared to smoking; a transformation delivering long-term multi-stakeholder value.”
Derren Nathan at Hargreaves Lansdown noted Morocco has taken over the helm at a difficult time.
"He tells us that 2023 is going to be complex. Challenging would perhaps be a better word,“ Nathan said.
“Meanwhile performance in the faster growing New Categories is a little mixed. Compounded with a shrinking tobacco market the company has its work cut out to keep profits moving in positive territory.”
Russ Mould at AJ Bell explained: “Tobacco companies are pinning their hopes on mass take-up of next generation products such as vaping, yet they face considerable pushback from regulators, health campaigners and more”
“Each week there seems to be someone else calling for tougher rules on vaping, in particular, with children’s doctors the latest to say the rules have to change. They imply youth vaping is a serious problem and needs to be stamped out immediately,” he noted.
“British American Tobacco will be no stranger to dealing with these headwinds, but in this modern world it has a responsibility as a good corporate citizen to ensure its products are not harming society.”
Reflecting the concerns highlighted by Mould, children’s doctors are leading calls for an outright ban on disposable vapes to reduce their popularity among young people as the long-term impact on lungs, hearts and brains remains unknown.
The Royal College of Paediatrics and Child Health said the government should ban single-use disposable vapes, which can be bought for just £1.99 and are most popular with young people.
Dr Mike McKean, the RCPH vice-president and a paediatric respiratory consultant, said the college had made a “very carefully considered call.”
“It took decades to understand relationship of cigarette smoking to cancer and respiratory illnesses – my worry is we could be sleepwalking into a similar situation here,” McKean said.
Nathan added: “The company is sticking by its 2023 guidance of 3-5% underlying revenue growth and mid-single figure growth in underlying Earnings Per Share.”
“Today’s release suggests it’s going to need to see quite an uptick in the second half to meet these targets."
Separately, industry rival Philip Morris International Inc (NYSE:PM) re-affirmed its 2023 earnings forecast, expecting results to tick up from the previous year thanks to its smoke-free portfolio.
Presenting at the 2023 Deutsche Bank Global Consumer Conference, Chief Financial Officer Emmanuel Babeau told investors PMI's 2023 diluted earnings per share guidance of between $5.88 and $6.00 remained unchanged from April at then-prevailing exchange rates.
Shares in BAT rose 0.8% to 2,590p.
11.15am: Eurozone retail sales flat in April
Eurozone retail sales volumes were flat in April, weaker than the 0.2% forecast by economists and marking a year-on-year decline of 2.6%.
The figures released by the EU statistics agency Eurostat were the latest sign of a cooling of the eurozone economy as high inflation and rising borrowing costs take their toll.
Euro area #RetailTrade unchanged in April 2023 over March, -2.6% compared with April 2022 https://t.co/TUHhGxgLjX pic.twitter.com/75as2SraXW
— EU_Eurostat (@EU_Eurostat) June 6, 2023
The European Central Bank said separately that its monthly survey of consumers showed their inflation expectations had “decreased significantly”.
10.50am: Shore Capital upgrades Auto Trader
Bucking the weaker trend is Auto Trader with shares up 0.6% while the FTSE 100 continues to languish, down 0.3%.
Shore Capital has upgraded the stock to buy from hold with a fair value estimate of 714p offering around 17% upside from current levels.
The broker said the group’s financial year 2023 results detailed a strong performance and, notwithstanding macro headwinds, included an encouraging assessment of the outlook for the current year.
After updating financial models and, despite the drag on profitability being exerted by Autorama, ShoreCap forecasts attractive EPS growth, a useful DPS progression and strong cash generation which it reckons will fuel further share buy-backs.
“We believe the group’s stock valuation looks undemanding relative to this potential and its fundamental attractions following a period of muted share price performance (our fair value estimate of 714p suggests 17% upside potential) so are upgrading our recommendation from hold to buy,” the broker said.
10.17am: Half of multinationals plan to cut office space
About half of large multinationals are planning to cut office space in the next three years as they adapt to the rise of homeworking since the pandemic, according to estate agent, Knight Frank.
The survey of executives in charge of real estate at 350 companies round the world that together employ 10mln people found that, among major groups cutting their footprint, the largest number was aiming to reduce space by 10 to 20%.
“Better but less space is probably the strap line for the larger organisations,” said Lee Elliott, a commercial real estate expert at Knight Frank.
“It is not the death knell of property markets because what you are seeing is a shortfall of supply, and therefore an increase in rents, for the prime buildings,” he added.
The prospect of big companies making further cuts to office space has prompted worries about the future of older buildings and unpopular locations, as the commercial property market negotiates a painful downturn prompted by higher interest rates.
Nearly half of the companies surveyed are also planning to change their headquarters in the next three years. However, a majority of smaller companies are planning to expand their office space.
Shares in British Land fell 0.6% and Land Securities by 0.4%, while the FTSE 100 is now down 32 points at 7,568.
9.50am: Construction sector picks up but house building remains depressed
May’s construction PMI figures signalled a modest upturn in overall UK output, driven by faster rises in commercial building and civil engineering activity but house building remained depressed.
The headline seasonally adjusted S&P Global/CIPS UK Construction PMI which measures month-on-month changes in total industry activity registered 51.6 in May, up from 51.1 in April and above the neutral 50.0 mark for the fourth successive month.
The report showed that house building was by far the weakest-performing category of activity, with output declining at the steepest pace for three years.
Worries about the impact of higher interest rates and subdued market conditions continued to dampen housing activity.
Commercial building (index at 54.2) was the best-performing segment, with output rising at a robust and accelerated pace, while civil engineering also gained momentum (index at 53.9), with growth hitting an 11-month high in May.
Supply conditions continued to normalise in May, as highlighted by the greatest improvement in vendor lead times since August 2009.
This helped to alleviate cost pressures across the construction sector, with the overall rate of input price inflation easing to its weakest for 32 months.
Although indicative of only modest growth, the latest reading pointed to the strongest upturn in total construction activity since February.
9.15am: Unilever on hunt for new chair
Unilever PLC (LSE:ULVR) has appointed executive search firm Spencer Stuart to find a replacement for Chair Nils Andersen, Bloomberg reported, citing "people familiar with the situation".
Bloomberg said the move would continue an overhaul of its leadership after a series of missteps in recent years frustrated shareholders.
The report said the maker of Marmite has shaken up its top ranks after appointing activist investor Nelson Peltz to the board last year.
Victoria Scholar at interactive investor noted Anderson has been chairman since November 2019 “with shares down under his tenure, underperforming the FTSE 100.”
“A new leadership team could help offset recent criticism of profiteering and put its failed acquisition of GSK’s consumer healthcare division to the past,” she thought.
In May, Unilever said Chief Financial Officer Graeme Pitkethly intended to leave the company at the end of May next year, while Hein Schumacher will take over as chief executive from Alan Jope on July 1.
8.53am: Oil price falls back, BP and Shell slip
The FTSE 100 moved lower in opening exchanges, now down 7 points at 7,593, as a falling oil price dragged down index heavyweights, BP PLC (LSE:BP.) and Shell PLC (LSE:SHEL, NYSE:SHEL).
Susannah Streeter at Hargreaves Lansdown said: “’The week’s early optimism has been clouded by renewed concerns about a looming recession in America, while the repercussions of the banking crisis appear to be coming back to bite big US lenders.”
“As the world’s largest economy shows more signs of heading for a contraction, with growth in the mighty services sector slowing more quickly than expected last month, worries are rising about the knock-on effect around the world.”
The oil price retreated around 2% as the initial bounce following the Saudi production cut at the Opec+ meeting faded away.
Brent crude was trading down 2.1% at $75.17 while West Texas Intermediate fell 2.0% to $70.73.
Anglo American PLC (LSE:AAL) rose 0.8% supported by an upgrade by RBC Capital Markets to outperform from sector perform with an increased price target of 2,700p (up from 2,500p), while a move to buy from hold by Shore Capital boosted Auto Trader PLC, up 0.1%.
The slowing retail sales reported by the British Retail Consortium pushed Next and B&M European Retail into the red by 0.7%.
In the FTSE 250, Chemring PLC jumped 6.2% after reporting a record order book alongside half-year results which it said were “in-line” with its expectations.
The firm said its half-year order intake hit record levels and its order book was at the highest level in over a decade at £750mln.
Michael Ord Chemring Chief Executive said: “The outlook for the global defence market is increasingly positive, with strong growth predicted over the next decade.”
8.15am: FTSE 100 edges lower, retail sales growth slow
The FTSE 100 edged lower in early exchanges Tuesday after falls in the US overnight and news of slowing growth in UK retail sales.
At 8.15am, London’s lead index was down 8.00 points, or 0.1%, at 7,591.99 while the FTSE 250 was up 11.35 points at 19,124.90.
Growth in retail sales slowed to 3.9% in May, from 5.1% in April on an annual basis with like-for-like sales growth dropping to 3.7%, from 5.2%, and below the consensus, 5.2%, according to figures from the British Retail Consortium.
BRC chief executive Helen Dickinson said: “With consumer confidence still recovering from record depths, and continued tightening of household incomes, we are unlikely to see substantial sales growth in the coming months.”
Samuel Tombs at Pantheon Macroeconomics said: “Retail sales volumes still appear to be oscillating around a flat trend, despite the emerging recovery in consumers’ confidence and the support in May from the extra bank holiday for the King’s coronation.”
After seasonally adjusting and deflating the BRC’s figures, “we think that they are consistent with around a 1.0% month-to-month drop in the official measure of retail sales volumes in May, which would more than reverse April’s 0.5% increase.”
Retailers were mixed in early exchanges. Next PLC (LSE:NXT) fell 0.5%, Boohoo Group PLC (AIM:BOO) slipped 2.0% but M&S edged higher. The survey showed food sales remained strong.
British American Tobacco PLC (LSE:BATS) climbed 1.1% after its new boss committed himself to the existing ‘A Better Tomorrow’ strategy, saying “smokers must have access to better choices.”
In his first trading update, Chief Executive Tadeu Marroco said he was committed to the existing strategy and confident it could be executed successfully.
He said the aim was to reduce the health impact of its business through a multi-category portfolio of reduced-risk products.
“Put simply, smokers must have access to better choices. This is already a reality for smokers who have made the switch to our reduced-risk product,” he said.
Richard Hunter at interactive investor said: “British American Tobacco is in a difficult place at the moment, with some previous ghosts coming back to haunt the group’s prospects.”
“The general backdrop has accelerated the need to change horses midstream and the new Chief Executive has confirmed that the current strategy will continue to be pursued, which should at least provide some momentum,” he felt.
7.51am: Bank holidays fail to boost sales as much as hoped
UK retail sales increased in May, though the trio of bank holidays failed to boost figures as much as expected, according to new data.
According to the British Retail Consortium KPMG retail sales monitor, sales rose 3.9% on-year in May compared to a 1.1% fall the year before and below the three-month average growth of 4.7%.
BRC chief executive Helen Dickinson said: “With consumer confidence still recovering from record depths, and continued tightening of household incomes, we are unlikely to see substantial sales growth in the coming months.”
Total growth (in value terms) came in at 3.9% over the previous year, down from 5.1% in the previous month. If we consider still-high inflation rates, this represents a much steeper fall in volumes. pic.twitter.com/bitsdg6TAO
— Harvir Dhillon (@HarvirDhillon) June 6, 2023
On a like-for-like basis, sales increased 3.7% year-on-year last month, falling below the three-month average rise of 4.7%. In May 2022, sales had fallen 1.5% year-on-year on a like-for-like basis.
The figure was down from 5.1% growth in April and City expectations for a 5.2% rise.
Food sales were up 9.6% on a year ago, boosted by the Coronation but still not sustained across the month.
Paul Martin, UK head of retail at KPMG, said the grocery sector was the “fastest growing part of the consumer wallet”, which meant that consumers were “having to spend more . . . in the one area that is getting disproportionately more expensive”.
UK inflation declined less than expected between March and April, from 10.1% to 8.7%, according to official data published last month. In April, food prices rose at an annual rate of 19.1%, only marginally down from a 45-year high of 19.2% in March.
7.42am: BAT's new boss commits to exisiting strategy
British American Tobacco PLC (LSE:BATS)’s new boss committed himself to the existing ‘A Better Tomorrow’ strategy, saying “smokers must have access to better choices.”
In his first trading update, Chief Executive Tadeu Marroco said he was committed to the existing strategy and confident it could be executed successfully.
He said the aim was to reduce the health impact of its business through a multi-category portfolio of reduced-risk products.
“Put simply, smokers must have access to better choices. This is already a reality for smokers who have made the switch to our reduced-risk product,” he said.
“Our strategic aim is to progressively transform our portfolio by actively encouraging adult smokers to switch to less risky products, compared to smoking; a transformation delivering long-term multi-stakeholder value.”
In the first quarter, BAT increased the number of consumers of non-combustible products1 by a further 900,000 driving good revenue growth and further reducing losses of New Categories which means the firm is on track to deliver its £5bn revenue ambition in 2025, with profitability in 2024.
Outside the US, combustible brands have been performing well as we address portfolio gaps and optimise pricing.
The performance in US combustibles has been disappointing and Marroco said returning combustibles to consistent value creation is critical to its strategy in the US.
Glo has had an underwhelming start to 2023, albeit recent momentum is more encouraging, Bat said.
BAT maintained its guidance for the financial year.
7.26am: AB Foods bolsters agri-food business
Associated British Foods PLC (LSE:ABF) has picked up National Milk Records (AQSE:NMRP) PLC in a £48mln deal.
The agreed cash deal, worth 215p per NMR share, will be made by the group’s AB Agri business, and
represents a 87% premium to the NMR closing price on June 5.
AB Agri is ABF's international agri-food business with a presence in more than 80 countries, employing over 3,000 people internationally.
The FTSE 100-listed firm said NMR's business is well aligned with AB Agri's objective of supporting customers across the dairy industry, helping to drive efficiency and increase productivity.
NMR said it felt the terms were “fair and reasonable,” and urged shareholders to back the deal.
7.00am: FTSE 100 called lower
The FTSE 100 is set to open a lower on Tuesday after US markets gave back some of Friday’s strong gains.
Spread betting companies see London’s blue chip index down by around 13 points.
In New York, the Dow Jones Industrial Average fell 199.90 points, or 0.6%, to 33,562.86. The S&P 500 slipped 8.58 points, or 0.2%, at 4,273.79 and the Nasdaq Composite dipped 11.34 points, or 0.1%, at 13,229.43.
In Australia, the Reserve Bank of Australia enacted another unexpected interest rate hike of 25 basis points, bringing the cash rate target to 4.10%. The interest rate paid on exchange settlement balances was also increased by 25bp to 4.00%.
This follows a surprise 25bp hike in May.
RBA Governor Philip Lowe explained that upside risks to the outlook for inflation have increased, noting "very high" services price inflation.
Back in London and the early focus will be a trading update from BAT.