Daily market update: Metlen, BT, Ithaca Energy

The FTSE 100 managed a steady start on Monday morning after weak US jobs numbers prompted a Wall Street rally on Friday.

The non-farm payrolls number was a long way short of expectations, but in a looking-glass world where weak economic data could mean relief on the rate hike front this has been taken positively by investors. This logic was applied in Asia too, which saw widespread gains.

Less positively for markets, oil is still holding above $100 per barrel, even if signs of improvement in the supply picture have helped to keep crude in check.

In London, Greece-based Metlen Energy & Metals was among the risers as it signed a long-term agreement for the supply of gallium. While this metal may not be familiar to casual observers, it is widely used in defence and tech applications.

Metlen chair Evangelos Mytilineos had previously warned that a lack of interest from Europe would lead it to seek buyers elsewhere.

BT / TalkTalk

BT clearly sees some short-term pain involved in acquiring debt-ridden rival TalkTalk as justified by the long-term gain.

BT has been given leeway on competition concerns because the UK government is concerned about the risks involved in TalkTalk collapsing, not least thanks to its position as a supplier of services to the Ministry of Defence.

However, the deal may still draw scrutiny from rivals and TalkTalk’s own creditors, with some reports of possible legal action, meaning this may not be the last word in the story.

While TalkTalk’s customer base has been steadily whittled down by tough competition in the broadband market, it still had some 1.6 million customers as of this May.

Adding these customers to its ranks will entrench BT’s competitive position, even if the company will have to take a sizeable initial cash hit as it progresses the deal.

BT will hope the transaction can inject further life into recovery efforts which have managed to dial up a 90%-plus total return since Kirkby took the helm in early 2024.

Ithaca Energy

Fresh from finding a place in the FTSE 100 for the first time, a move supported by significant M&A, Ithaca Energy has announced another big deal.

Significantly, the company is buying its first assets outside of the North Sea. The industry has consistently bemoaned the tinkering in the fiscal and regulatory set-up for oil and gas in the UK and this deal for Canadian assets provides a level of diversification.

The deal could even represent a planting the flag moment in the North American market for Ithaca and act as a precursor to adding further assets in this region.

Backing from majority shareholder, Israel’s Delek, and cash generation which is being bolstered by high energy prices mean that, for now at least, Ithaca has the necessary firepower to pursue further deals.

Though investors may be wary that snaffling so many substantial assets in a relatively short timeframe could lead to some indigestion for Ithaca.