FTSE 100 movers: L&G rallies; Marks & Spencer out of fashion

(Sharecast News) - London's FTSE 100 was down 0.3% at 8,699.62 in afternoon trade on Friday. Legal & General shot to the top of the index as it announced the sale of its US protection business to Japanese peer Meiji Yasuda, with the latter taking a 5% stake in L&G in a deal worth $2.3bn.

The transaction will kickstart a long-term strategic partnership between the two companies to support growth ambitions in US Pension Risk Transfer and asset management markets. L&G intends to launch a £1.0bn buyback following completion, which is expected towards the end of 2025.

Russ Mould, investment director at AJ Bell, said: "Anyone who had Legal & General pegged as boring is having to change their minds as CEO António Simões gets stuck into transforming the business.

"Fresh from announcing a new structure last June as he looks to streamline the insurer's operations, Simões has now unveiled an eye-catching deal with Meiji Yasuda.

"The Japanese firm has an existing relationship with Legal & General in asset management but this is set to see a meaningful extension as it buys the latter's US insurance business and takes a 20% stake in its pension risk transfer (or PRT) business across the Atlantic.

"PRT - which involves the likes of Legal & General being paid to take on corporate pension liabilities - is central to Simões' vision for the business. While this is a growing area, and the American market is potentially huge, some investors are uncomfortable with the capital demands required in this area.

"Perhaps the share buyback, returning a good chunk of the proceeds of the deal to shareholders, will help salve these concerns. Added up, the company expects to dole out a highly material 40% of its market value in buybacks and dividends through to 2027.

"Meiji Yasuda is also committed to taking a 5% stake in Legal & General as a group. While there's no suggestion this is the precursor to any sort of eventual takeover and it is likely just about cementing the relationship, it may nonetheless set some tongues wagging."

Marks & Spencer was on the back foot, having announced late on Thursday that Richard Price, managing director of clothing, home & beauty since 2020, would be leaving the retailer to pursue a portfolio career.

Price will be succeeded by John Lyttle, the former CEO of Boohoo Group. M&S said Lyttle has "extensive" retail and transformation experience, having spent five years at Boohoo and nine at Primark as chief operating officer.

FTSE 100 - Risers

Legal & General Group (LGEN) 245.90p 2.93% Vodafone Group (VOD) 69.16p 1.71% Coca-Cola HBC AG (CDI) (CCH) 3,040.00p 1.67% Compass Group (CPG) 2,775.00p 1.50% BP (BP.) 433.85p 1.13% Glencore (GLEN) 358.45p 1.13% Pershing Square Holdings Ltd NPV (PSH) 4,214.00p 1.01% CRH (CDI) (CRH) 8,440.00p 0.86% BAE Systems (BA.) 1,193.00p 0.68% International Consolidated Airlines Group SA (CDI) (IAG) 365.70p 0.63%

FTSE 100 - Fallers

Mondi (MNDI) 1,270.50p -2.76% Barratt Redrow (BTRW) 440.60p -2.74% Marks & Spencer Group (MKS) 344.90p -2.38% Intermediate Capital Group (ICG) 2,326.00p -2.27% Taylor Wimpey (TW.) 117.80p -1.75% Halma (HLMA) 2,846.00p -1.73% Smith & Nephew (SN.) 1,008.50p -1.61% Auto Trader Group (AUTO) 771.40p -1.58% JD Sports Fashion (JD.) 83.40p -1.58% GSK (GSK) 1,457.50p -1.49%