Wednesday, December 4, 2024

Business Roundup for Spain and the UK

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Patchy debut Shares in clean energy and water treatment company Cox, which debuted on the Spanish stock exchange on November 15, have recovered from initial setbacks

Opening at €10.24, slightly above the Cox shares’ €10.23 reference price that gave the company a market value of €805 million, they fell within minutes to €9.86 with more than one million transactions that day.

According to insiders, the disappointing performance was due to market concerns regarding renewable energy following Donald Trump’s victory in the US presidential election.

By close of day on November 18 the Cox shares closed at €10.22, a 7.58 per cent improvement according to Bolsas y Mercados Españoles (BME), which organises activities on Spain’s stock exchanges.

Clear as water  Severn Trent Water’s half-year profits tripled to £192 million (€230.4 million) despite not meeting water quality standards.

The company, which provides water for 4.7 million customers in an area between Bristol, mid-Wales and the Humber,  said it expected to be penalised for failings at its Strensham (Worcestershire).

A Severn Trent spokesperson predicted a “significant improvement” in water quality in 2025, thanks to the company’s “biggest ever” ultraviolet disinfection process.

Planning ahead CaixaBank announced its 2025-2027 plans for maintaining profitability despite the falling interesting rates that are affecting Europe’s banks.

Spain’s biggest high street lender announced that it expects its return on tangible equity (ROTE) to average 15 per cent over the next three years, anticipating “solid economic growth” to boost revenue and compensate for lower interest rates.

Although this is below its current 16.9 per cent third-quarter ROTE, CaixaBank calculates that this will have risen above 16 per cent by 2027.

Sir Jim says No Petroineos, which owns Scotland’s sole oil refinery, rejected a US consortium’s approach only months before it is due to close.

According to Sky News, the consortium led by Robert McKee, a US energy industry expert, includes The Canal Group and Trading Stack, a commodities trader based in the Middle East.

Sources close to the offer revealed that Petroineos, which is 50 per cent owned by Ineos, Sir Jim Ratcliffe’s petrochemicals empire, intends to convert the 100-year-old Grangemouth installation into an import terminal for processed fuels.

Not enough  Grifols said on November 19 that Canadian investment fund Brookfield’s takeover bid “significantly” undervalued its prospects and long-term potential.

The Barcelona-based pharmaceutical company said Brookfield’s €10.50 offer for every Grifols “A” share, and €7.62 per “B” share, put a too-low value of €6.45 billion on the company.

Following a board meeting, Grifols announced after the market closed on November 19 that it would not recommend that shareholders accepted an offer “at the indicated price.”

Brookfield and the Grifols family had, until now, intended to take the company private after the company lost 30 per cent of its market value following attacks from short-seller Gotham City Research in January and March.

Wasted money Aviva, one of the UK’s largest pension funds, has lost £368 million (€441.5 million) on “disastrous” incinerator power plant investments.

The power plants were designed to run on biomass waste wood, but later converted to burn household waste.

The Guardian reported that despite pouring “millions” into three power plants in Hull, Boston and Barry (Wales) and after months of criticism from individual shareholders. Aviva, is putting them into administration.

An Aviva source said the technology “posed significant challenges” that would require more investment to solve.

Changed tactics In April, BBVA proposed a €11 billion takeover bid for all Sabadell shares which the Catalan bank rejected.

By May, the bid had turned hostile although Bilbao-headquartered BBVA still insists that from its point of view the offer remains friendly.

Following a media advertising campaign and accusations between both banks, BBVA is taking a more moderate approach, and now stresses how both banks would be able to face sustainability and technological challenges together.

Meanwhile Deutsche Bank analysts predict that BBVA will add another €2 billion to its offer, stating that it doubted the present offer had little chance of success.

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