Greencore steadies after Tyson takeover scare
Shares at Irish sandwich giant Greencore have stabilised after market sources stated the company is confident that a deal announced by one of its major US customers will not have an adverse effect on it business in America.
Greencore shares fell by over 7pc on Tuesday following the announcement that one of its main American customers, Tyson Foods, is to purchase sandwich maker AdvancePierre in a deal worth $3.2bn (€2.9bn). The stock was up 2.5pc yesterday.
One source familiar with the situation told the Irish Independent that the company was confident that the AdvancePierre deal would not have a major impact on Greencore's US operations, which operates under the Peacock Foods brand.
The source said that a long-term deal signed between Peacock and Tyson Foods was strong and that it would be "difficult to replicate".
Greencore purchased Peacock in November of last year for a fee in the region of €687m. Tyson's deal with AdvancePierre had spooked investors who were concerned that Greencore could be set to lose one of its largest US customers.
In Dublin, the Iseq overall index of Irish shares was down slightly in late trading at 6907.86, a fall of 0.16pc or 10.83 points.
The biggest loser of the day was Bank of Ireland. The lender's share price dipped by almost over 3pc. Irish dairy provider Glanbia was also down, losing 2.9pc. Exploration group Kenmare Resources lost 2.8pc.
Providence Resources had the largest gain of the day, with shares up 5pc, having retreated earlier in the week. Financial group IFG also clawed back some losses from earlier in the week with the stock picking up 3.5pc yesterday.
World stocks hit a record high on Wednesday after strong earnings and the prospect of tax cuts for corporate America boosted US shares and the euro held on to recent gains as political concerns in France ebbed.
European shares edged higher towards 20-month highs hit earlier this week after centrist Emmanuel Macron's win in the first round of French presidential elections considerably reduced the risk of a French exit from the single currency.
Higher-than-expected earnings from European companies helped European stocks reverse early falls and edge higher.
"We have had 25pc of companies reporting, and a majority of those have beaten estimates," said Emmanuel Cau, global equity strategist at JP Morgan.
"Pretty much every single eurozone data point out has surprised to the upside, and this is driving upgrades."
Overall, first-quarter earnings for STOXX 600 companies were expected to rise 5.5pc, according to Thomson Reuters I/B/E/S data. Revenues are expected to increase 5.7pc.
That compares to the 11.4pc earnings growth expected for top US companies.