Company news in brief

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Total makes major UK gas discovery

French oil and energy group Total said it had made a major gas discovery on the Glendronach prospect, located off the coast of the Shetland islands in the North Sea.

Total said yesterday that preliminary tests on the new gas discovery confirmed good reservoir quality, permeability and well production deliverability, with recoverable resources estimated at about one trillion cubic feet (1 tcf).

"Glendronach is a significant discovery for Total which gives us access to additional gas resources in one of our core areas and validates our exploration strategy," said Arnaud Breuillac, president of Total's Exploration & Production division, in a statement.

Total added that the well was drilled to a final depth of 4 312 meters and encountered a gas column of 42 meters of net pay in a high quality 'Lower Cretaceous' reservoir.

Total has a 60% stake in Glendronach, while Ineos E&P UK Ltd and SSE E&P UK Limited each hold 20% stakes. – Nampa/Reuters

Randgold agrees merger terms with Barrick

Randgold Resources Ltd said yesterday it agreed to the terms of a recommended share-for-share merger with Canada's Barrick Gold Corp.

Under the terms of the merger, each Randgold shareholder will receive 6.1280 new Barrick shares for each share of the African rival, the companies said.

Barrick has a market capitalisation of C$18.78 billion (US$14.53 billion) and Randgold has a market capitalisation of 4.6 billion British pounds (US$6.02 billion), according to Thomson Reuters I/B/E/S. – Nampa/Reuters

Aspen’s valuation tumbles by billions

Aspen Pharmacare has lost about R45 billion of its market value in just over a week in a sell-off sparked by concern over the South African company's debt and the sale of its baby formula business.

The company's share price has tumbled more than 35% since it posted full-year results and announced the baby milk disposal to French dairy group Lactalis.

Shares in Aspen were down 2.1% at R173.52 at 1451 GMT on Friday, their lowest level since 2013. The week's decline has taken Aspen's valuation to less than R80 billion, a far cry from the R124 billion of a week ago.

Analysts have attributed the stock's decline partly to Aspen's debt, which has hit levels that typically set alarm bells ringing, with net debt at four times normalised core profit.

Aspen, meanwhile, has said it will lower its debt with proceeds from the R11.2 billion sale of the infant milk business. – Nampa/Reuters

AB InBev faces EU antitrust fine

Anheuser-Busch InBev faces an EU antitrust fine for preventing cheaper beer imports into Belgium despite its efforts to settle the investigation, people familiar with the matter said.

Last year, the European Commission accused the world's largest brewer of abusing its market dominance in Belgium by impeding cheaper imports into the country of its Jupiler and Leffe brands from neighbouring France and the Netherlands.

The Commission said the result was that Belgian consumers were paying more for the two most popular beer brands in Belgium. AB InBev sells Jupiler and Leffe at lower prices in the Netherlands and France because of the greater competition in these two markets.

EU antitrust rules allow companies to settle investigations by offering concessions and regulators to close the case without levying any fine or proving wrongdoing. The Commission normally accepts this option only if it sees it as a quicker way to restore competition to the market.

The Commission, which can fine companies up to 10% of their global turnover, declined to comment. The sources say a formal decision will take some time before it is announced. AB InBev did not immediately respond to a request for comment. – Nampa/Reuters

Plan ditched to acquire Bidcorp's logistics business

International food distributor Bid Corporation Ltd (Bidcorp) said on Friday the prospective buyer for its UK logistics business is no longer interested in buying it, citing internal reasons.

In August the South African company said is was finalising an agreement to sell that business to an unidentified global company, moving a step closer to removing the loss-making, non-core asset.

"Bidcorp is currently considering alternative proposals which were suspended due to the advanced sale process," it said in a statement.

Bidcorp bought the UK Contract Distribution business in 1999. It had a few large contracts with fast-food chains like Yum Brands Inc's KFC and Burger King but has struggled to contribute to the group's overall profit, with too many risks and no opportunity for margin growth.

The exit of KFC in February, along with accompanying redundancies and restructuring as well as downscaling of properties and vehicles, contributed to significant annual losses at the business, Bidcorp said in August.

The firm is implementing numerous initiatives to improve the business and those plans are yielding positive results, it said on Friday. – Nampa/Reuters

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