London pre-open: Stocks seen up; Wood Group opens talks with Apollo
Sharecast – The was called to open 20 points higher at 7,892.
CMC Markets analyst Michael Hewson said: “This week’s main focus will be on further earnings reports, notably from the likes of Goldman Sachs (NYSE:) and Morgan Stanley (NYSE:) tomorrow as well as Tesla and Netflix (NASDAQ:) later in the week.
“It’s also an important week for the UK economy after last week’s numbers showed that the economy stagnated with the various industrial disputes dragging the wider economy.
“Tomorrow, we get a snapshot into the labour market as well as wage pressure, against the backdrop of the February surge in headline CPI to 10.4%. The pay gap is expected to widen further with wage growth expected to slow to 6.2% from 6.5%, while unemployment is expected to remain unchanged at 3.7%,
“This will be followed by Wednesday’s numbers which hopefully will see the headline rate fall below 10%, although most people expected this to happen in February and it didn’t with the main reason being surging food prices. This effect is likely to manifest itself in Friday’s March retail sales numbers, which could see a sharp slowdown from the solid start to the year we saw in January and February.”
In corporate news, oil and gas engineering firm Wood Group said it had decided to engage with US private equity group Apollo to see if a firm offer can be made on a potential £1.66bn takeover.
Wood has rejected four proposals from Apollo but has now decided to grant access to documents for due diligence after a fifth approach at 240p a share, the company said.
It added that a deadline for a firm bid had been extended to May 17 from April 19.
“Apollo has stated to the board that it values the skills and capabilities of Wood’s employees and believes the company is well positioned in its markets and at the forefront of the energy transition and industrial decarbonisation,” Wood Group said in a statement.
Elsewhere, payments firm Network International said it has received a non-binding proposal from a consortium of CVC and Francisco Partners about a cash offer of 387p a share.
This follows a series of prior proposals that were rejected.
Network said that having “carefully evaluated” the proposal with its financial advisers, it has concluded that it would be minded to recommend it should a firm intention to make an offer be announced.
“As such, the board has agreed to provide the consortium with access to confirmatory due diligence,” it said.
