Vectura may face takeover auction; oil hit by pandemic fears; US job openings hit record – as it happened

Graeme Wearden

from on 2021-08-09 16:38 (#5N3KG)

Rolling coverage of the latest economic and financial news, as cigarette maker Philip Morris and private equity group Carlyle battle to own UK health company

Latest: US job openings hit record
Oil hit by China's Covid-19 restrictions.
Auction process looms for Vectura... after Philip Morris bids 1bn
Anti-smoking campaigners and politicians have criticised sale to PMI
Deliveroo shares jump 10% after Delivery Hero builds stake
Morrisons takeover battle extended as CD&R given more time to bid

5.38pm BST

That's all for today - here's our main stories:

5.19pm BST

US consumers have lifted their medium-term inflation expectations to the highest in eight years.

A new survey from the New York Federal Reserve found that Americans expect inflation to be 3.7% in three years, up from 3.6% predicted in June. That's the highest reading since August 2013.

U.S. consumers' expectations for inflation over the medium term rose to an eight-year high, according to a New York Fed survey https://t.co/sl2GzEgSbm

4.52pm BST

Back in Europe, shares have hit a fresh record high.

The Stoxx 600 has gained 0.2% today to a new peak, at 470.91 points, before closing slightly lower.

Europe's Stoxx 600 hits fresh record high, up 0.2% pic.twitter.com/3vOTKGgBuJ

3.56pm BST

This chart captures just how sharply US job openings have increased since the initial economic shock of the pandemic:

June JOLTS: 10.07M job openings vs. 9.27M exp. Story of more jobs than workers available continues, as does that of the "great resignation". Quits rate increased to 2.7% in June from 2.5% in May driven by quits in professional & biz svcs and durable goods mfg. pic.twitter.com/1AehlgkNxo

3.51pm BST

Tobacco company Philip Morris International and US private equity group Carlyle could go head-to-head in a rare auction process to resolve the 1bn takeover battle for Vectura, the asthma inhaler maker, my colleague Rob Davies writes.

A five-day auction process will begin on Wednesday if final bids are not forthcoming by 5pm on Tuesday, regulators at the UK takeover panel announced.

3.32pm BST

Daniel Zhao of Glassdoor has tweeted the key points from the JOLTS survey of job openings.

That includes a rise in the proportion of workers quitting their jobs voluntary - a sign that employees are able to move to better jobs in the tight labour market.

Wow! Job openings jumped to 10.1 million in June, another record high for the 4th straight month.

Job openings rocketed upwards in June as the economy reopened & labor demand remained strong. Delta clouds the outlook, but for time being, openings continue to grow.#JOLTS 1/ pic.twitter.com/nZVjtGIIdS

The jump in job openings was primarily driven by professional & business services (+227K), retail (+133K), accommodation & food services (+121K).

Demand for workers continues to remain strong in reopening industries like retail & food services.#JOLTS 2/ pic.twitter.com/8CO8vru6Cc

Notably, finance is one of the few industries where job openings have remained consistently below pre-pandemic levels. #JOLTS 3/

Quits rebounded in June, after dropping in May, and are near their record highs.

Quits are a sign of worker confidence in a tight labor market where workers have the leverage to move on to greener pastures.#JOLTS 4/ pic.twitter.com/u8v20J87LF

Quits tell a similar story of tight labor markets in retail, accommodation & food services, and prof & business services with quits growing in June while already well-above pre-pandemic levels.#JOLTS 5/ pic.twitter.com/GGuRPLehXs

Layoffs & discharges also hit a record low in June as employers worried about labor shortages hang onto the workers they do have.

Again, accommodation & food services, retail and prof. & business services have the largest drops in layoffs vs. pre-pandemic.#JOLTS 6/ pic.twitter.com/U9vXKTc78a

3.19pm BST

Just in: the number of job openings in the US has hit a new record high, at over 10 million.

There were 10.1 million job openings at the end of June, the US Bureau of Labor Statistics reports, the highest on record, and 590,000 more than in May.

#JOLTS pic.twitter.com/rd38HFdXIl

June 2021 #JOLTS Report:

10.1 million job openings

Quits rate up to 2.7%

Layoffs are still at all-time lows https://t.co/WmZITdz6Yl

Job openings and hires both pick up. #JOLTS pic.twitter.com/b7u7ULJoPb

3.06pm BST

Energy giant SSE are the top FTSE 100 riser today, up almost 5%, after the Mail on Sunday reported that activist investor Elliott Management had built up a stake in SSE.

City sources said Elliott Management, which has been dubbed a corporate raider' for buying shares and forcing change at large companies, has recently bought a large shareholding in SSE which supplies around five million Britons with energy to their homes.

It's not clear how large Elliott's shareholding in SSE is and why it has taken the position in the London-listed group.

2.58pm BST

Back in London, travel, property and leisure stocks are also suffering from worries about the pandemic.

British Airways owner IAG is among the top FTSE 100 fallers, down 3%, along with conference organiser Informa (-2.1%), housebuilders Persimmon (-2%) and Barratt (-2%), commercial property developer British Land (-2%) and engineering group Rolls-Royce (-1.9%).

2.44pm BST

In New York, the Dow Jones industrial average has opened 145 points lower at 35,062 points, down 0.4%.

Aircraft maker Boeing is the top faller, down 1.6%, with energy company Chevron (-0.85%) and construction machinery maker Caterpillar (-0.8%) also dropping back.

2.19pm BST

The Fleetwood Mac singer-songwriter Christine McVie, whose credits include Little Lies and Don't Stop, has become the latest artist to sell her catalogue of hits to Hipgnosis.

In the last 46 years the band have had three distinct writers and vocalists but Christine's importance is amply demonstrated by the fact that eight of the 16 songs on the band's Greatest Hits albums are from Christine."

2.15pm BST

Oil is also being pulled down by data over the weekend, showing a dip in crude imports into China.

Here's the Financial Times's take:

This flurry of tough epidemic controls has dented the country's fuel demand outlook," said Stephen Brennock, analyst at PVM, an oil brokerage. What is more, as well as being under a Covid cloud, China's oil consumption is also under pressure from signs of a cooling economy."

Data released at the weekend showed China's oil imports remained subdued in July at 9.7m barrels a day, down from 9.8m b/d in June and significantly lower than the same month a year ago when they hit 12.1m b/d, according to ING. Cumulatively, crude oil imports are down 5.6 per cent year on year in 2021.

2.13pm BST

Wall Street is set for a subdued start to trading:

Happy Monday... here's what futures are looking like.

S&P 500 0.16%
Nasdaq 0.08%
Russell 2K 0.45%
Dow Jones 0.28% pic.twitter.com/NqfDqZR6Jh

1.45pm BST

Oil prices are under considerable pressure once again today, with Covid concerns once again being front and centre, says Craig Erlam of OANDA:

Rising Chinese delta cases and restrictions has cast doubt over the economy in the short-term, with the world's largest crude importer keen to get to grips early with any outbreak, just as it has done in the past.

With various countries seeing surging case numbers of the delta variant, it's difficult to gauge the economic impact globally, especially given different successes with the vaccine rollout and different attitudes towards restrictions. The UK, for example, has among the highest vaccine rates and no restrictions, but other countries may not be so bullish, even with high take up. Many don't have the luxury.

1.27pm BST

The oil price is sliding today, hit by worries that the latest curbs to fight the Covid-19 pandemic will hit the recovery.

A stronger US dollar, and a major new warning about the climate emergency, are also weighing on the energy market today.

#Oil drops to the lowest level since late May! pic.twitter.com/IWgLO9DS4p

Fresh travel restrictions in China have added to oil's downside as the Delta variant continues to delay the full lifting of virus-related curbs in most countries.

Among the notable price movers in #markets early this US morning ...
#Oil is down some 4%--part of a general pullback in #commodities on global #growth concerns fueled by a surge in #Covid infections in #China triggering renewed travel restrictions; and
#Bitcoin is up some 4% pic.twitter.com/jvV01Bnbqt

Commodity prices under pressure today across the board. Oil particularly hard hit. Bad combination of delta spreading in China and rising USD to blame? pic.twitter.com/XJpfcsCA8b

WTI inches towards $65/bbl. A drop of 9% in a week is not sustainable

My view, Oil is experiencing the spill over effect of Gold & other precious commodities fall basis prospects of higher rates, etc#Oil market fundamentals have not changed in a week to mark that shift
#OOTT pic.twitter.com/xVaIB7hfh6

Human activity is changing the Earth's climate in ways unprecedented" in thousands or hundreds of thousands of years, with some of the changes now inevitable and irreversible", climate scientists have warned.

Within the next two decades, temperatures are likely to rise by more than 1.5C above pre-industrial levels, breaching the ambition of the 2015 Paris climate agreement, and bringing widespread devastation and extreme weather.

12.35pm BST

Discount voucher business Groupon could be taken to court if it fails to change its ways, according to the competition watchdog, the Press Association reports.

More people than ever are shopping online, especially over the last year.

It is therefore essential that online businesses treat customers fairly and refund them money where due under consumer law.

CMA requires Groupon to improve its treatment of customers - https://t.co/viqN9Bar9s
ChronLaw Consumer Law Newshttps://t.co/zJbS2X3dWM #ConsumerLaw #news #law #attorney #lawyer

Officials require Groupon to improve treatment of customers - Concern failing to provide some customers with cash refunds and to deliver all products within advertised timeframes @CMAgovUK

We're calling on Groupon to improve how it treats customers. Our investigation found evidence they don't always give people the refunds or other forms of redress, such as replacement items, that we consider they're legally entitled to.

Read more: https://t.co/sgBhlcYTlD pic.twitter.com/5Ck30hSakQ

12.08pm BST

Most of the City action this morning has centred on the M&A arena, points out AJ Bell financial analyst Danni Hewson, as bidders seek undervalued UK assets.

Tobacco giant Philip Morris launched a hostile takeover bid of more than 1 billion for inhaler specialist Vectura, a US private equity firm planted the seeds for a bidding war on supermarket Morrisons with a request for extra time to make an offer and a German rival took a stake in takeaways platform Deliveroo.

The continuing global corporate raid on UK plc suggests overseas parties still see significant untapped value in the London stock market.

11.45am BST

The takeover battle for drugmaker #Vectura will enter a rare head-to-head auction process if #privateequity group #Carlyle and #tobacco giant #PhilipMorris do not make final bids by Tuesday, according to a British regulator. // For @Reuters $VEC $PM $CG https://t.co/WDTIPxayEq

11.41am BST

Economic optimism in the eurozone has dropped to a three-month low, as investors fret about economist prospects and the risk of new lockdowns.

Research group Sentix has reported that its index of eurozone investor morale fell to 22.2 this month, sharply down on July's 29.8 and the lowest since May.

The global economy is running at full speed, but momentum is weakening. The slowdown in the Asia ex Japan region is also contributing to this. In the Eurozone, the recovery of the current economic situation continues.

Fears are growing that new lockdowns could loom from autumn onwards with rising infection figures and could once again weigh on the economy.

"Expectations are falling, sharply. " @ClausVistesen on Sentix, Eurozone, July #PantheonMacro

Eurozone August Sentix Investor Confidence Report - Sentix
Sentix Investor Confidencehttps://t.co/VJqllFkwi9 pic.twitter.com/Fks1xGg4HT

11.03am BST

UK inhaler maker Vectura has now withdrawn its backing for Carlyle's takeover offer, following Philip Morris's higher, 1bn bid.

Last Friday, Vectura backed Carlyle's 155p-per-share offer (958m), saying the private equity bid was well aligned with Vectura's wider stakeholder objectives" as well as being worth more than Philip Morris's initial offer.

The Panel has today released Panel Statement 2021/16. Please visit our website https://t.co/29S6mIycHG to view it.

As there remain two competing bidders for Vectura, in accordance with the City Code on Takeovers and Mergers, the Takeover Panel has today announced rules to govern the basis on which any further offers for Vectura are made after 5.00 pm on 10 August 2021 (the Auction Rules").

As a result, the Board feels that it is appropriate to withdraw its intention to recommend the Carlyle Offer and at this stage not to state an intention to recommend the PMI Offer. The Board will make a further announcement after the end of the auction, as set out in the Auction Rules, based on its fiduciary duties, consistent with its approach to date.

*U.K. TAKEOVER PANEL ANNOUNCES AUCTION PROCEDURE FOR VECTURA

10.22am BST

The FTSE 100 has started the new week on the back foot, down 25 points points or 0.35% to 7097 points.

Financial services platform Hargreaves Lansdown is leading the fallers, down 10%, after attracting a record number of new customers in the last year, which pushed up its costs.

The pandemic has accelerated two trends that were already evident to us: a permanent shift to digital; and a change in the demographic mix. Demand for our digital services has soared with 393 million digital visits and 98% of trades being done online.

In FY21, 83% of our new clients were under 55, as we saw younger clients showing an interest investing and saving, prioritising financial resilience as they benefit from the transition of wealth from older generations.

Average staff numbers increased by 11% from 1,599 in 2020 to 1,776 in 2021 with the key increases being within the service functions of the Helpdesk and in Operations, driven by the need to support our increased levels of client activity and contact whilst working in a COVID-19 configuration.

9.45am BST

On the economic front, German exports have picked up despite the supply chain problems weighing on manufacturers.

German exports jumped 1.3% in June, data this morning shows, the 14th monthly rise in a row, even though factories are facing shortages of components such as computer chips.

Compared with the same month last year, exports to the United Kingdom were up by 11.0% to 5.5bn in June 2021. German imports from the United Kingdom increased by 11.5% to 2.7bn over the same period.

#Exports in June 2021: +1.3 % on May 2021. https://t.co/L0VW09MoiN #trade pic.twitter.com/QbbFIS2JkU

Today's strong data illustrates that supply chain frictions have not yet affected German exports. However, looking ahead, this could still change.

While order books are still richly filled, supply chain frictions, particularly the lack of microchips, could lead to more delivery problems in key sectors like the automotive industry and therefore to some distortions of export data in the coming months.

9.30am BST

The Serious Fraud Office (SFO) has launched an investigation into entrepreneur Gavin Woodhouse, whose business dealings were revealed by an undercover investigation by the Guardian and ITV News.

The UK's anti-corruption agency said it was investigating suspected fraud and money laundering in relation to ... Woodhouse and individuals and companies associated with him".

The conduct currently under investigation by the SFO relates to investments offered in care homes and hotels between 2013 and 2019."

9.30am BST

The bidding war for Morrisons took another twist this morning when one of its suitors, the US private equity group Clayton, Dubilier & Rice, was given more time to consider a rival offer.

The UK's Takeover Panel, which regulates takeover activity, said it had given CD&R until 5pm on 20 August to announce a firm intention to make an offer for Morrisons or walk away, known as a put up or shut up" deadline, an extension of the previous deadline of 5pm today....

9.15am BST

Shares in online delivery firm Deliveroo have surged by 10% in early trading, after it reported that Germany's Delivery Hero has taken a 5.09% stake.

The news of Delivery Hero's stake-building has pushed Deliveroo as high as 360p, their highest level since floating on the London stock market this spring.

It is hard to say with conviction at this point what Delivery Hero's intention is with respect to its 5% holding in Deliveroo. Each company hosts a trading update in the coming days that will shed more light.

Founded in 2011, Delivery Hero operates in about 50 countries worldwide, with particular strength in Asia, where it owns the foodpanda brand.

It does not operate in Britain - Deliveroo's largest market - after selling its Hungryhouse business to Just Eat in 2016.

Germany's Delivery Hero takes 5.09% stake in rival Deliveroo https://t.co/Uohe8QXG9t

8.50am BST

8.23am BST

Shares in Vectura have risen 2.5% in early trading to 168p, slightly above Philip Morris's 165p-per-share offer.

They'd closed at 164p on Friday night, above that day's improved 155p offer from rival bidder Carlyle, which suggested the City had expected the bidding war to continue.

8.03am BST

Good morning, and welcome to our rolling coverage of the world economy, the financial markets, the eurozone and business.

PMI intends to increase the total level of expenditure on research and development that it believes will further benefit Vectura's differentiated technologies and development expertise for the delivery of complex inhaled therapeutics....

PMI believes that its significant expertise in scientific research, regulatory science, manufacturing, supply chain and commercialization globally (with operations in over 180 markets), will safeguard and enhance the development of Vectura and its capabilities in complex inhaled therapeutics.

Carlyle ups bid for inhaler firm Vectura, trumping tobacco giant Philip Morris https://t.co/c76STXQaQe

Anti-smoking campaigners and politicians had criticised Vectura for proposing to sell up to a tobacco company. The chief executives of Cancer Research UK, Asthma UK, the British Lung Foundation and Action on Smoking and Health wrote to the business secretary, Kwasi Kwarteng, and the health secretary, Sajid Javid, calling on the government to block the deal.

The charities said there was a real prospect" that PMI would use Vectura to legitimise tobacco industry participation in health debates within the UK"

Takeover panel has extended deadline for #MRW / $MRW bid:-

the Executive has ruled that...CD&R must now by 5.00 pm on 20 August 2021 either announce a firm intention to make an offer for Morrisons under Rule 2.7 of the Code or announce that it does not intend to make an offer...

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