By Carla Mozee, MarketWatch
Morrisons pretax profit halved; TSB soars on takeover talks
LONDON (MarketWatch)--Strength in pharma stocks and brewer
SABMiller PLC helped push the U.K.'s benchmark FTSE 100 higher
Thursday.
Making a splash among FTSE 250 midcap stocks , shares of TSB
Banking Group PLC rallied by 23.5% after the lender confirmed it is
in talks to be purchased
(http://www.marketwatch.com/story/tsb-shares-surges-26-after-banco-sabadell-offer-2015-03-12)
by Spain's Banco de Sabadell PLC .
The FTSE 100 closed 0.6% higher at 6,761.07, adding to a 0.3%
gain from Wednesday.
(http://www.marketwatch.com/story/ftse-100-higher-after-string-of-losses-2015-03-11)Among
gainers, SABMiller shares rose 1.7%. Morgan Stanley resumed
coverage of the brewer with an overweight rating. Exane BNP Paribas
said now is "arguably the best time" for Anheuser-Busch InBev SA
(AHBIY) to finance a bid on SABMiller, given current conditions in
the bond and foreign-exchange markets.
Although there are "limited synergies and execution risk, a deal
would boost [per-share earnings] and more important, help solve
ABI's volume issue. Tempting. If a deal doesn't happen soon, it may
never happen," wrote Exane BNP analyst François Mosnier, in a
note.
GlaxoSmithKline PLC (GSK) gained 1.9% after the drug maker said
it plans to sell about half of its 12.4% stake in South Africa's
Aspen Pharmacare Holdings Ltd. . Peer pharma company AstraZeneca
PLC (AZN) climbed 4.1%.
Wm Morrison Supermarkets PLC shares turned higher by 0.5%. They
had sunk to the bottom of the FTSE 100 earlier after the
supermarket chain's fiscal 2015 underlying pretax profit dropped by
more than half, to GBP345 million from GBP719 million
(http://www.marketwatch.com/story/morrisons-yearly-net-loss-widens-2015-03-12).
It also indicated a dividend cut. In fiscal 2016 it expects to pay
a dividend of 5 pence per share or less.
Morrison's results "are a miserable welcome for incoming CEO
David Potts who will have his work cut out to deliver a quick
turnaround for the retailer," as it is "bearing the brunt of its
GBP1bn investment in price reductions, which are spread across
three years," Himanshu Pal, director of retail insights at Kantar
Retail, wrotec in a note. But positive developments come from a
stronger supply chain and improved logistics that will help
Morrisons compete against discounters and larger rivals, said
Pal.
ITV PLC climbed 0.7% as it said it has agreed to purchase Talpa
Media BV for up to 781 million pounds ($1.17 billion). The
entertainment show producer is behind programs including "The
Voice", and company founder John De Mol established "Big Brother."
ITV will make an initial cash payment of GBP355 million for
Talpa.
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