Fortress 'considering options' after rival lifts Morrisons bid, LXi announces several acquisitions

London open

The FTSE 100 is expected to open 16 points higher on Friday, having closed down 1.54% at 7,058.86 on Thursday.

Stocks to watch

The consortium led by Fortress Investment Group said it was "considering its options" over Morrisons after its takeover offer was trumped by rival private equity group Clayton, Dubilier & Rice (CD&R). It called on Morrisons' shareholders to "take no action" on CD&R's £7bn agreed bid, trumping its own £6.7bn offer for the UK supermarket chain. CD&R's offer is worth 285p a share, well above the 272 pence a share offered by Fortress, forcing the Morrisons board to drop its recommendation of the Fortress bid.

Specialist property investor LXi announced a number of accretive acquisitions for a total cost of £80m on Friday, reflecting an accretive 5.25% average net initial yield. The FTSE 150 real estate investment trust said the acquisitions benefited from a long weighted average unexpired lease term (WAULT) to first break of 23 years, as well as “high-quality” tenants in “robust” sectors, and inflation-linked rental uplifts. It came on the back of the company’s £100m placing in July.

Newspaper round-up

The Federal Trade Commission on Thursday refiled its antitrust case against Facebook, arguing the company holds monopoly power in social networking and renewing the fight to rein in big tech. The agency also dismissed a request from Facebook that its chair, Lina Khan, step aside in the case because of her criticism of them in the past. - Guardian

Morrisons has agreed a £7bn takeover by the US private equity group Clayton, Dubilier & Rice in the latest round in a fierce fight for control of the country’s fourth largest supermarket chain. The Bradford-based grocer confirmed on Thursday night it had accepted an improved offer of 285p per share from the private equity firm that bettered the offer on the table from rival suitor Fortress. - Guardian

Ministers blocking the £2.6bn sale of Ultra Electronics to a private equity-backed buyer would be an act of “political and economic suicide”, a top shareholder has warned. The takeover of the defence company by Cobham must go ahead despite national security concerns or international investors will question Britain's commitment to open markets, the shareholder told The Telegraph. - Telegraph

The chief executive of Philip Morris International has lashed out at opponents of his widely condemned bid for the British inhaler maker Vectura, accusing them of “settling old scores” against the tobacco industry. Jacek Olczak claimed critics of the £1.1bn takeover, which include the charities Asthma UK and the British Lung Foundation, were “not interested in progress” and seeking to prevent the company moving away from cigarette sales. - Telegraph

Lloyds Banking Group’s push into residential letting appears to be more ambitious than it had previously disclosed, with internal documents showing it aims to own 50,000 homes for rental within nine years. An internal job advertisement for a director role in Citra Living, its new property rental division, reveals the scale of its intentions, with a target for it to make £300 million in annual profit by 2025. - The Times

US close

Wall Street stocks closed mixed on Thursday, after investors digested minutes from the FOMC's latest meeting and this week's jobless claims figures from the Labor Department.

At the close, the Dow Jones Industrial Average was down 0.19% at 34,894.12, while the S&P 500 rose 0.13% to 4,405.80 and the Nasdaq Composite gained 0.11% to 14,541.79.

The Dow Jones closed 66.57 points lower on Thursday, extending the heavy losses recorded in the previous session following the publication of the minutes from the Fed's latest policy meeting.

Those minutes revealed that the majority of the US central bank's top policymakers judged that the Federal Reserve would be able to slow its bond purchases later in 2021.

According to the minutes of the 27-28 July meeting of the Federal Open Market Committee, Fed officials thought they were now firmly on track to meet their inflation goal, while progress had been made on achieving full employment.