Market Report: The road to Holcim and Lafarge’s merger


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The Independent Online

The road to Holcim and Lafarge’s merger is not a smooth one after all.

The tie-up of the two European construction giants has hit a bump, with reports in the Swiss press over the weekend that a major Holcim shareholder is pushing for the cement-maker to get a better deal. The agreed terms involve a one-for-one share exchange for Holcim investors, but since the companies shook hands, their fortunes have diverged. The surprise removal of the cap on the Swiss franc in January saw Holcim’s value surge, while Lafarge’s results have lagged. All this is bad news for CRH, the Irish building materials group that agreed to buy €6.5bn (£4.7bn) of assets being sold in the deal, including Tarmac. CRH tumbled 70p to 1,727p.

The beginning of quantitative easing in Europe failed to revive the Footsie, which was still reeling from signs late on Friday that US interest rates could rise sooner than expected. The FTSE 100 dropped 35.33 points to 6,876.47. Rate-sensitive property companies were among the worst performers – Land Securities lost 26p to 1,239p and British Land fell 14.5p to 825p.

Glencore and Standard Chartered both benefited from kind words from Exane. StanChart improved 20p to 1,044p as the bank raised its target price. And Glencore rose 7.4p to 296.9p as Exane predicted the commodities giant could resume its share buyback programme as soon as next summer.

Betfair climbed 90p to 2,156p as Morgan Stanley hiked its target price on the back of last week’s strong results. Ocado improved 9.5p to 370.5p ahead of today’s first-quarter trading update, with Barclays predicting a “short and straightforward” update.

Deutsche Bank is trying to get out of Legoland owner Merlin Entertainment. Last week the bank won the job to sell 15.44 per cent of the company on behalf of private equity owners CVC and Blackstone. But Deutsche Bank was left with a 7 per cent stake on Friday after failing to drum up enough interest. Filings revealed yesterday that Deutsche has managed to sell down its stake to 6.59 per cent. Merlin rose 2.2p to 420p.