FTSE steady after buoyant retail sales and sobering public finances data, Britvic rejects Carlsberg takeover approach and Nvidia surrenders world’s largest company mantle to Microsoft

“The FTSE 100 was steady in early trading after buoyant UK retail sales but more sobering news about the state of the public finances,” says AJ Bell Investment Director Russ Mould.

“The last time net debt represented the same proportion of GDP revealed today was when the Beatles had yet to enjoy a number one single, TV was in black and white and the country was still paying off debts accumulated during the Second World War. It shows the difficult task facing whoever occupies Number 10 after next month’s election.

“Ocado recovered some ground after being squashed like a tomato yesterday on news its Canadian partner had exited their exclusive deal and halted expansion plans.

“Information services and events firm Informa ticked higher as it flagged earnings at the top of end of guidance. The company is seeing strong events rebooking into 2025 as the corporate world moves away from all meetings being on a screen and settles into a hybrid pattern where the networking benefits of in-person get-togethers are appreciated.

“In the jockeying of position for the mantle of the world’s largest company, Microsoft is back ahead by a nose. Nothing has gone wrong at Nvidia, which reached the number one spot earlier this week, it’s just the usual fluctuations in the stock market which, with such large companies, can wipe or add hundreds of millions or even billions of dollars to their market value.”

Britvic

“Britvic believes its products are probably the best soft drinks in the world because it is not letting Carlsberg rock up and buy the company on the cheap.

“Trading on just 15 times earnings before revealing the bid approach, Britvic is a classic example of a company that quietly got on with the job. There was no glamour around its products, investors didn’t hype up the stock, and it sat quietly on the UK market slowly growing sales and revenue. Often, it’s only when something is taken away that you miss it, and investors might take that view if Britvic was gobbled up and delisted.

“Carlsberg is not the first company you would suggest when trying to compile a list of potential buyers for Britvic. It is known for selling beer and lager, but there have been hints it wanted to diversify. A ‘Beyond Beer’ strategy is in place and has seen the company explore other avenues such as hard seltzers. Britvic would effectively act as a springboard to accelerate that diversification and take the company into an adjacent market.

“It has already dipped its toe into the water with soft drinks such as Tuborg Squash Light and Xixia Pineapple & C. Owning Britvic would turbocharge its position in this sector.

“Drinking trends are evolving and there is a growing movement of people shunning alcohol. The rise of non-alcoholic beers, gins and wines has provided more choice and made a lot of people realise they can still enjoy a night out without getting drunk. Furthermore, younger adults don’t seem to have the thirst for loading up on booze like their parents or grandparents might have had at the same age.

“Carlsberg seems to have taken the view that it needs to diversify to protect its future and Britvic looked like a ripe opportunity potentially at a reasonable price.

“Two rejected approaches later, Carlsberg needs to decide how much it wants to own Britvic as it will have to dig a lot deeper to win over the board and shareholders.”

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