British American Tobacco PLC (LON:BATS) shares have gone up in smoke on the news that rival cigarette makers Philip Morris and Altria are exploring a merger, more than ten years after they split.
The pair parted ways in 2008 as part of a plan to set free the faster-growing overseas business (Altria) whilst the US operation (PMI) was held back by legal battles.
Should the tie-up go ahead, it would create a tobacco giant worth more than US$200bn, reuniting the US and international makers of Marlboro.
The discussions come as those in the industry look to build out their presence in the ecigarette space, and Altria took a 35% stake in popular ecig maker Juul Labs for US$13bn late last year.
Cannabis is also seen as a new frontier, and Altria has made investments in this space too, giving it more growth potential even as the number of smokers falls.
Shares in BAT, which bought Reynolds American for US$50bn two years ago, dropped 3% to 2,873p, although fellow London-listed tobacco giant Imperial Brands PLC (LON:IMB) reversed its losses and was up 1% to 2,074p shortly before the close of play.
Kazera Global raises £400,000 to fund next stage of drilling at Namibian tantalum deposits
Kazera Global PLC (LON:KZG) has raised £400,000 to complete further drilling at its Purple Haze, White City and Signaalberg tantalum deposits in Namibia.
It has raised the cash by issuing 66.67mln new shares at 0.6p apiece – some 17% below Friday’s closing price.
Bosses said they expected the new round of drilling to “identify further mineral resources”.
Henry Boot steps higher
Henry Boot PLC’s (LON:BOOT) shares stepped up on Tuesday after its house broker Peel Hunt upped the property group to ‘buy’ from ‘add’ and retained their 300p target price following what analysts said were a “resilient” set of interims.
In a note, the broker said that despite an 8% fall in pre-tax profits in its first six months to £24.1mln, a “strong” property development pipeline and levels of contracted activity in its construction and land promotion arms meant analysts were “confident” that the firm would hit their full-year numbers.
Peel Hunt added that while they were conscious of “ongoing Brexit-related uncertainty”, the solid pipeline provided “comfort” for the second half.
In early afternoon trading, the shares were 3.8% higher at 245p.
Surface Transforms heats up as it finalises brake disc supply deal with German car maker
Brake disc maker Surface Transforms PLC (LON:SCE) motored higher after it finalised a multi-year supply agreement with a German car manufacturer.
Surface Transforms will supply the customer, known only as German OEM 5, with its carbon ceramic brake discs up until the end of 2029.
“The conclusion of this contract is another important milestone in the progress of Surface Transforms,” said chief executive Kevin Johnson.
“We are now focussed on bringing our carbon ceramic disc into volume production with OEM 5 in October 2021, a significant customer reference. And of course, in the meantime, working with OEM 5 to extend our supply onto other cars in their portfolio.”
Shares rose 1.5% to 20.3p on Tuesday morning.
Carpetright investors encouraged by funding plans
Carpetright PLC (LON:CPR) was the top riser in London on Tuesday after its biggest shareholder struck a deal to take on its debt pile and open talks over longer-term funding.
Hedge fund Meditor, which owns almost a third of Carpetright’s shares, has bought a £40.7mln revolving credit facility from current lenders Natwest and Allied Irish Banks.
A £6.5mln overdraft will effectively be taken on by Meditor as well.
Meditor said it would now work with bosses to provide a “more stable and longer-term funding platform” as the company looks to turn its fortunes around after a difficult few years.
Analysts said the transaction should provide a degree of certainty around Carpetight’s future, and investors reacted accordingly, with the stock up 11% to 14.9p in early deals.
Cambridge Cognition sounds earnings alarm
Cambridge Cognition Holdings PLC (LON:COG) investors were left scratching their heads after the brain health group warned losses will double this year.
It has won big contract wins for its digital solutions and voice testing platform so far this year, but trading in other parts of the business have been “challenging”.
As a result, it is now forecasting a 10% fall in full-year revenue to £5.5mln, while losses are expected to be in the region of £2.8mln (2018: loss of £1.4mln).
“Whilst trading has been difficult this year for the core product range, the company is taking steps to improve commercialisation and to improve sales in the second half of 2019 and beyond into 2020,” said new chief executive Matthew Stork.