G4S rejects takeover approach, Ocado shares jump, and stocks higher

Here are the top business, market, and economic stories you should be watching today in the UK, Europe, and abroad:

G4S rejects takeover approach

Security firm G4S (GFS.L) has rejected a hostile takeover bid from Canada’s GardaWorld.

GardaWorld on Monday went public with a 190p per share bid for the company, saying G4S executives had ignored attempts to engage with the company. GardaWorld urged shareholders to press G4S into considering the bid and shares leapt higher.

G4S said in a brief statement on Monday afternoon that it had “unanimously” rejected the bid, which it viewed as “opportunistic”.

In a fuller statement on Tuesday morning, G4S said its chairman had engaged with GardaWorld and its private equity bid backers BC Partners to explain why the takeover approach “significantly undervalues” G4S.

The company added it was “well placed to deliver growth, profitability and substantial free cash flow” without a deal.

Shares in G4S slipped 1.8{09c3c849cf64d23af04bfef51e68a1f749678453f0f72e4bb3c75fcb14e04d49} in early trade.

Ocado (OCDO.L) shares jumped on Tuesday as it revealed its retail sales had leapt by 52{09c3c849cf64d23af04bfef51e68a1f749678453f0f72e4bb3c75fcb14e04d49} over the summer, and said customers had reacted “positively” to its new Marks & Spencer (MKS.L) partnership.

Stocks in the fast-growing online grocery firm were up 3.9{09c3c849cf64d23af04bfef51e68a1f749678453f0f72e4bb3c75fcb14e04d49} in early morning trading in London, and are now up 67.8{09c3c849cf64d23af04bfef51e68a1f749678453f0f72e4bb3c75fcb14e04d49} on a year ago. M&S shares were also up 4.7{09c3c849cf64d23af04bfef51e68a1f749678453f0f72e4bb3c75fcb14e04d49}.

The company said in a trading statement its revenues had come in at £587.3m ($755.8m) in the 13 weeks to the end of August, up by more than half on the same period a year earlier.

Average orders per week stood at 345,000, a 9.6{09c3c849cf64d23af04bfef51e68a1f749678453f0f72e4bb3c75fcb14e04d49} increase year-on-year. It said strong demand, a phased reopening of its website to new customers, and a normalising of shopping patterns were behind the rise.

UK employers have slashed 695,000 jobs since March when the coronavirus first sent Britain into national lockdown.

Britain’s official unemployment rate also increased as expected by analysts to 4.1{09c3c849cf64d23af04bfef51e68a1f749678453f0f72e4bb3c75fcb14e04d49} between May and July, from 3.9{09c3c849cf64d23af04bfef51e68a1f749678453f0f72e4bb3c75fcb14e04d49} a month earlier, according to new data from the Office for National Statistics (ONS) published on Tuesday.

The claimant count, which includes unemployed and low-paid workers receiving work-related benefits, stood at 2.7 million last month, up 120.8{09c3c849cf64d23af04bfef51e68a1f749678453f0f72e4bb3c75fcb14e04d49} since March.

New estimates also show the total number of jobs in Britain has fallen by 354,000 to 35.4 million between March and June, the steepest fall in almost three decades.

Stocks rose around the world on Tuesday after Chinese industrial production and retail sales data beat forecasts.

Chinese industrial production rose by 5.6{09c3c849cf64d23af04bfef51e68a1f749678453f0f72e4bb3c75fcb14e04d49} in August, data from Beijing showed, while retail sales grew by 0.5{09c3c849cf64d23af04bfef51e68a1f749678453f0f72e4bb3c75fcb14e04d49}. Both numbers were ahead of forecasts.

The data pushed Chinese stock markets higher and supported investor sentiment around the world.

The Hong Kong Hang Seng (^HSI) rose 0.3{09c3c849cf64d23af04bfef51e68a1f749678453f0f72e4bb3c75fcb14e04d49}, the Shanghai Composite (000001.SS) gained 0.5{09c3c849cf64d23af04bfef51e68a1f749678453f0f72e4bb3c75fcb14e04d49}, and the Shenzen Component rose (399001.SZ) 0.9{09c3c849cf64d23af04bfef51e68a1f749678453f0f72e4bb3c75fcb14e04d49}.

Japan’s Nikkei (^N225) slipped 0.4{09c3c849cf64d23af04bfef51e68a1f749678453f0f72e4bb3c75fcb14e04d49} and Australia’s ASX 200 (^AXJO) was flat.

In Europe, the FTSE 100 (^FTSE) was up 0.1{09c3c849cf64d23af04bfef51e68a1f749678453f0f72e4bb3c75fcb14e04d49} in London by just after 9.30am, Germany’s DAX (^GDAXI) was down 0.3{09c3c849cf64d23af04bfef51e68a1f749678453f0f72e4bb3c75fcb14e04d49}, and France’s CAC 40 (^FCHI) was down 0.2{09c3c849cf64d23af04bfef51e68a1f749678453f0f72e4bb3c75fcb14e04d49}. The IBEX 35 (^IBEX) rose 0.4{09c3c849cf64d23af04bfef51e68a1f749678453f0f72e4bb3c75fcb14e04d49} in Madrid and the FTSE MIB (FTSEMIB.MI) was down 0.3{09c3c849cf64d23af04bfef51e68a1f749678453f0f72e4bb3c75fcb14e04d49} in Milan.

Wall Street looked set for a higher open. S&P 500 futures (ES=F) were up 0.3{09c3c849cf64d23af04bfef51e68a1f749678453f0f72e4bb3c75fcb14e04d49}, Dow Jones futures (YM=F) were up 0.3{09c3c849cf64d23af04bfef51e68a1f749678453f0f72e4bb3c75fcb14e04d49}, while Nasdaq futures (NQ=F) were trading 0.5{09c3c849cf64d23af04bfef51e68a1f749678453f0f72e4bb3c75fcb14e04d49} higher.

Grocery shopping declined by £155m ($199m) in August as the government’s Eat Out to Help Out scheme encouraged people to dine in restaurants instead of cooking at home.

Market research firms Kantar and Nielsen both released data on Tuesday showing growth in supermarket sales slowed markedly in August. Kantar said spending in supermarkets was £155m lower in August than in July.

Fraser McKevitt, head of retail and consumer insight at Kantar, said the government’s Eat Out to Help Out scheme was behind the decline. The scheme gave diners 50{09c3c849cf64d23af04bfef51e68a1f749678453f0f72e4bb3c75fcb14e04d49} off their food bill at participating restaurants every Monday to Wednesday throughout August. Over 100 million meals were eaten using the scheme.

Domino’s Pizza has announced plans to hire 5,000 workers and 1,000 apprentices, with the pandemic strongly boosting orders.

The pizza delivery chain (DOM.L) said it would hire new chefs, customer service staff and delivery drivers. The company said the roles were on top of the 6,000 new roles it had already created since the coronavirus hit.

It is also planning to create around 1,000 apprenticeship roles for six months each, as part of the UK government’s funded “Kickstart” work placement scheme.

Swedish payment and shopping service Klarna has become Europe’s most valuable private fintech after raising $650m (£505m) in its latest funding round for a valuation of $10.65bn.

The round was led by Silver Lake, Singapore’s sovereign wealth fund GIC, and funds managed by BlackRock and HMI Capital. They join current investors including Sequoia Capital, Bestseller, Dragoneer, and Commonwealth Bank of Australia.

Klarna said it will use the new funding to invest in its shopping service and grow its global presence, particularly targeting expansion in the US, where it said it now has more than 9 million customers.  

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