What to Watch: £3bn takeover for UK software firm, FTSE 250 dives on Brexit fears, and Extinction Rebellion targets the City

Oscar Williams-Grut
Senior City Correspondent, Yahoo Finance UK
Queen Elizabeth II visiting software company Sophos, which has agreed a £3.1bn takeover bid. Photo: Tim Graham Photo Library via Getty Images

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

Takeover bid for UK software firm

UK security software group Sophos (SOPH.L) has agreed a takeover offer from US private equity firm Thoma Bravo.

Shares in Sophos jumped over 35% on Monday after Thoma Bravo announced that Sophos had agreed to a $7.40 per share bid that values Sophos at £3.1bn. The bid price presents a premium of 37.1% on Friday’s closing price.

Peter Gyenes, chairman of Sophos, said the bid was “compelling” and “delivers a significant opportunity for all stakeholders.”

“Thoma Bravo has deep sector expertise in cybersecurity software as well as a long and successful track record of partnering with and investing in its portfolio companies to support long-term growth and success,” Gyenees said.

“Under Thoma Bravo's ownership we expect Sophos to accelerate its evolution and leadership in next-generation cybersecurity.”

Nicholas Hyett, an equity analyst at Hargreaves Lansdown, said: “It’s been a rocky road for Sophos investors; the internet security business missed guidance repeatedly in 2018 and the shares took a pounding as a result. More recent results have stabilised the ship somewhat, but growth has been slower and investor confidence needs a lot of rebuilding.

“Against that background we suspect most investors will be reasonably happy with the offer, and with Sophos’ former private equity owner Apax already committed to backing the deal we see little chance of it failing to win shareholder support.”

FTSE 250 dives on Brexit fears

European markets went into reverse on Monday morning, as hopes that a Brexit deal could be reached appeared more distant.

UK assets surged in price on Friday after EU representatives said they could see a “pathway to a deal”. However, the mood has soured over the weekend, with chief EU Brexit negotiator Michel Barnier telling ambassadors on Sunday he still sees a “big gap” between the UK and EU positions.

Britain’s FTSE 100 (^FTSE) was down 0.3% on Monday morning, while the FTSE 250 index, which is seen as a more accurate barometer of UK-specific business, was down as much as 1.2% in early trade. The pound slipped by 0.5% against both the dollar and the euro.

Elsewhere, France’s CAC 40 (^FCHI) was down by 0.7%, Germany’s DAX (^GDAXI) was down by 0.5%, and the Euronext 100 (^N100) was down by 0.6%.

Overnight in Asia, Japan’s Nikkei (^N225) was closed, the Hong Kong Hang Seng Index (^HSI) was up by 0.8%, and China’s Shanghai Composite (000001.SS) was up by 1.1%.

Extinction Rebellion targets the City

Protesters hold a banner as they block the road during an Extinction Rebellion demonstration at Bank, in the City of London. Photo: Henry Nicholls/Reuters

Environmental campaigners Extinction Rebellion are targeting the City of London as part of a continuing campaign of civil disobedience to draw attention to the “climate emergency”.

The group said it would try and close roads and stop public transport early on Monday morning, citing the banking sector’s “contribution to funding climate breakdown is driving us toward ecological collapse”.

Earlier this year, demonstrators blockaded the London Stock Exchange by gluing themselves across the entrances, while others stuck themselves together outside the Goldman Sachs HQ on Fleet Street.

Bank of England governor Mark Carney warned in an interview with the Guardian over the weekend that firms ignoring the risks from climate change could go bankrupt.

Superdry founder becomes permanent CEO

Superdry (SDRY.L) founder Julian Dunkerton has had his contract as the retailer’s chief executive extended until April 2021, the company has announced.

Dunkerton has been serving as interim CEO at the fashion brand since April, when he gained control of the business in a boardroom coup.

Peter Williams, chairman of Superdry, said Dunkerton “has a clear vision and his creativity, ambition and leadership will be crucial for the turnaround of the business.”

Dunkerton said: “Since I have returned to the business full-time, I have been working with the team to put in place the plan that will turn around Superdry, with a focus on its design-led roots and strengthening the retail basics. We are already seeing early signs of progress and while this will take time, we are excited to realise the brand’s full potential.”

Government reveals post-Brexit budget date

The chancellor will hold his first budget on 6 November, just days after the UK is supposed to leave the European Union.

Sajid Javid said: “This will be the first budget after leaving the EU. I will be setting out our plan to shape the economy for the future and triggering the start of our infrastructure revolution.”

Last week, former chancellor Philip Hammond warned that the government was being “reckless about our economic future” because of its planned spending spree ahead of a possible no-deal Brexit.

Labour’s nationalisation plans ‘will cost £196bn’

Britain’s business business lobby has said Labour’s ambitious plans to re-nationalise the Royal Mail, water companies, and train companies would cost the taxpayer £196bn.

The Confederation of British Industry (CBI) said on Monday that the estimated cost of re-nationalisation would be equivalent to the combined annual government spend on education, health, and social care.

The CBI predicted that Labour’s plans would also inflate the national debt by over 10% to levels not sen since the 1960s. Debt servicing costs would rise to £2bn per year.

What to expect in the US

US stocks future are pointing to a quiet open later today. S&P500 futures (ES=F), Dow Jones futures (YM=F), and Nasdaq futures (NQ=F) were all flat.