FTSE 100 opens slightly higher, Devro PLC soars after agreeing £540mln bid from Saria

  • FTSE 100 opens slightly higher
  • SSE sells 25% stake in Transmission arm for £1.465bn
  • Devro soars after Saria swoops in £540mln deal

8.10am: Devro soars after agreeing to takeover

FTSE 100 opened slightly higher on Friday as a large disposal by SSE PLC (LSE:SSE) and news that Devro PLC (LSE:DVO) had agreed to be taken over sparked some interest.

At 8.10am London’s blue-chip index was up 5 points at 7,471 while the FTSE 250 was down 27 points at 19,513.

Devro PLC soared 59% after food manufacturer Saria announced it had agreed terms to buy the sausage casing maker for £540mln on a fully diluted basis, or 316.1p per share.

The price implied an enterprise value of £667mln equivalent to a multiple of 10.9 times enterprise value to EBITDA for the 52 weeks ended 30 June 2022.

“Saria believes that Devro represents an attractive opportunity to acquire a highly regarded global business of scale which will accelerate the growth of the Bidco group and deliver a number of benefits to the enlarged Saria business, its employees, customers and suppliers,” the Selm, Germany-based firm said.

SSE PLC rose 1.3% after announcing the sale of a 25% stake in its transmission business for £1.465bn to the Ontario Teachers’ Pension Plan Board.

The FTSE 100 listed generator said the deal would help unlock significant growth in both the Transmission business and across the wider SSE Group.

Banking stocks are in focus following some rating changes at RBC Capital Markets.

The broker has upgraded Lloyds Banking Group PLC (LSE:LLOY), up 0.4%, to outperform from underperform but downgraded NatWest Group PLC (LSE:NWG) to sector perform from market perform.

The price target for Lloyds has been increased to 57p from 44p but trimmed for NatWest to 290p from 300p.

Elsewhere, retailers will be in focus on Black Friday.

7.45am: UK car production returned to growth in October

UK car production returned to growth last month but is still well below pre-pandemic levels, new figures show.

A total of 69,524 cars were built in October, an increase of 7.4% on the same month a year ago, said the Society of Motor Manufacturers & Traders.

The rise followed a fall in September, which came after four consecutive months of growth, which the SMMT said illustrated how supply chain turbulence, in particular global chip shortages, continues to affect UK car manufacturers.

Mike Hawes, SMMT, chief executive said: “A return to growth for UK car production in October is welcome – although output is still down significantly on pre-Covid levels amid turbulent component supply. Getting the sector back on track in 2023 is a priority “

7.32am: SSE nets £1.465bn from sale of stake in Transmission arm

News of a big deal to kick off Friday as SSE PLC announces the sale of a 25% stake in its electricity transmission network business, SSEN Transmission, for £1.465bn to the Ontario Teachers’ Pension Plan Board.

The FTSE 100 listed generator said the deal would help unlock significant growth in both the Transmission business and across the wider SSE Group.

The disposal is expected to be completed shortly with proceeds to be used to support further growth in the transmission business and further growth opportunities across other core businesses.

The group said last week it was planning to sell minority stakes in distribution and transmission assets following a similar move in renewables. A deal on the distribution side is expected early next year.

7.00am: FTSE 100 seen little changed

FTSE 100 expected to open flat on Friday with US markets closed yesterday for Thanksgiving, and closing early today, and with little economic or corporate news in the diary.

Spread betting companies are calling the lead index up by 1 point.

Asian stocks were mixed on Friday, the Nikkei 225 in Tokyo was 0.4% lower. In China, the Shanghai Composite was 0.4% higher, but the Hang Seng in Hong Kong was down 0.5%. The S&P/ASX 200 in Sydney closed up 0.2%.

Retailers will be in focus as they try to tempt shoppers to spend with a flurry of Black Friday offers

Back in London, there are trading statements from sausage casings maker Devro and construction materials firm Breedon.

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