Updates from Morrisons, Ultra Electronics and Alstom


A 17-point climb on Friday for the FTSE 100 taking it to 6,825. By a huge margin, Shire was the biggest riser, up 16.93% to 4,371 as it rejected a third takeover bid from AbbVie, a US drugs giant. IAG also gained, up 2.40% to 384p while Whitbread also saw a 2.40% jump, to 4403p. Melrose Industries sank 2.78% to 262p.

The Dow Jones climbed again, up 26.6 points to 16,947 with a boost for drug makers.

We start with a new price cut war from Morrisons. It claims 135 of regular products will see price falls of almost 15% from today. Morrisons is under huge performance pressure dues to discounters like Aldi; its share price at 188p is at a 52-week low.

Earlier this year Morrisons claimed £1bn would be spent on lower prices; today sees the next round of cost cutting. Tesco is likely to make its own response clear to Morrisons cuts soon; it holds its AGM on Friday.

Boss Dalton Philips claims the cuts are permanent, rather than promotions. Around 2,600 staff are being cut in order to trim costs. Recent inflation data indicated May food prices were 0.6% lower than a year ago across the industry.

Next, Ultra Electronics claims its EMS Development Corporation business located in Long Island, New York, US, been awarded a contract totalling $21m from General Dynamics Electric Boat Corporation.

The contract is for the production of naval computer controlled power supply systems (Circuit-D) with deliveries over the next five years.

"This recognises," says chief exec Rakesh Sharma, "Ultra's specialist power management systems and supports a key US Navy submarine programme. The priority the programme receives is a reflection of the importance of the 'pivot to the Pacific' by the US Navy."

Lastly, French rail and energy group Alstom has voted to accept General Electric's offer for Alstom's energy business. GE is bidding $17bn though regulatory approval is still needed for a deal.

If it goes ahead, it would be GE's biggest industrial acquisition to date; another offer from Siemens-Mitsubishi Heavy Industries was also in competition for a deal.

However Siemens - it valued Alstom's overall energy business at €16.6bn - is still leaving the door open for further talks, should the agreement flail.

Ultra Electronics