Monday, April 16: Miners and oil majors conspired to drag the FTSE 100(-0.91%) lower as a result of rising geo-political tensions, whilst WPP also weighed as a raft of M&A rumours failed to lift the primary index into the green.
WPP fell 6.48% intraday as chief executive Martin Sorrell announced his decision to resign from the company he founded three decades ago. The highest-paid CEO in the FTSE 100 made the announcement after an allegation of personal misconduct came to the fore, and a subsequent internal investigation was ordered. WPP said a probe into the allegation had been concluded, though its findings would remain confidential.
Whitbread(+7.14%) was the biggest winner on the FTSE 100 today, as the market responded to calls from activist investor Elliot that the business should split out Costa Coffee and Premier Inn into two separate companies. The US hedge fund now holds the largest stake in the business, and it is the most recent investor to draw attention to a possible spin out. A consensus is starting to build that this is the right avenue to take with other large stakeholders supposedly in favour of the change. The onus will be on the board of directors to offer an alternative to the proposed demerger plans.
Smurfit Kappa Group(+3.35%) also helped the FTSE 100 higher amidst more takeover talk as reported in the weekend’s press. Rumours surfaced that the packaging manufacturer may be the takeover target of competitor Mondi, after management dismissed an approach from US business International Packaging as materially undervaluing the company.
The M&A theme continued to dominate price action intraday, as London-listed pharmaceutical business Shire(+1.00%) announced it would sell its oncology business to French drug maker Servier for $2.4bn, whilst Dutch pension fund APG Asset Management announced it would vote against Hammerson(+2.51%) PLC’s acquisition of shopping centre operator Intu Properties(-4.91%) if the company is to table the deal for approval at its shareholder meeting.
Across Europe, indices were mixed at the close with the FTSE 100 -0.91%, the DAX 30 -0.41% and the CAC 40 -0.04%.