NEW YORK: Stock markets were mixed on Wednesday as some exchanges halted their recent gains, but London and Tokyo rallied on news of the takeover of Japanese industrial giant Toshiba.
Toshiba has confirmed it has received a takeover offer from CVC Capital Partners, which has lifted shares in the Japanese tech company and has spurred several other companies on speculation about new deals.
Major Wall Street indices hovered around a flat line for most of the session, but the S&P 500 set a new record.
US President Joe Biden has stepped up calls for massive infrastructure investments, while the minutes of the Federal Reserve meeting showed that most policymakers view inflation as stable, even though ‘a few’ central bankers are worried about strong demand. ‘ could lead to higher prices than expected. “
The Fed meeting minutes last month “was so much in line with expectations that it didn’t really impact the market too much,” said Tom Cahill of Ventura Wealth Management, adding that investors are looking forward to the earnings season later this month.
“The market is waiting for earnings announcements to see if corporations can meet expectations or raise forecasts,” Cahill said.
London’s FTSE 100 rose 0.9%, continuing its gains on Tuesday following Toshiba’s announcement.
According to Danny, financial analyst at AJ Bell, the potential takeover of Toshiba by UK private equity fund CVC “is likely to spark speculation about which companies could be the next victim of the wave of money accumulated by private equity firms in recent years.” Hewson.
Tokyo closed only moderately higher, but Toshiba shares soared 18% after the company confirmed it had received an offer to buy out CVC.
The Nikkei newspaper reported that CVC Capital Partners was considering a 30% premium to the industrial group’s share price on Tuesday.
Toshiba said it will “request detailed information and thoroughly discuss” the proposal.
According to reports, the proposal will make Toshiba private, and the delisting will be aimed at speeding up decision-making by Toshiba’s management, which has recently come into conflict with shareholders.
Elsewhere, JPMorgan Chase rallied 1.6% after CEO Jamie Dimon predicted the US economy would see a “likely boom”, possibly until 2023 following a flood of financial support.
However, Daimon pointed to two risks that could derail this scenario: virulent vaccine-resistant variants of Covid-19, and longer inflation, which is forcing the Fed to quickly raise interest rates.