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Tullow Oil shares lost more than half their value on Monday, after the oil and gas company cut guidance and its chief executive resigned, in otherwise-sluggish London markets.
The FTSE 100 index UKX, -0.11% slipped 0.2% to 7,225.56, weighed down as the British pound continued to rise. The pound GBPUSD, +0.0913% gained 0.2% to $1.3169, as a weekend poll from the Financial Times showed a 10 percentage-point lead for the ruling Conservative Party over the Labour Party ahead of the Dec. 12 general election.
A strong pound tends to be negative for U.K.-based multinationals — many of which are listed on the FTSE 100 — that generate most of their revenue outside the country.
Tullow TLW, -66.36% shares slid 60% after the company said 2019 output fell significantly below expectations, suspended its dividend and said Chief Executive Paul McDade had resigned with immediate effect.
“The news represents a continuation of the problems which have dogged the company ever since its share price peaked more than seven years ago,” said Russ Mould, investment director at broker AJ Bell, in a note to clients.
“The appetite for risk which served it well when exploring for oil and gas arguably left it in a perilous position when it had too much debt heading into the oil-price crash in 2014. Despite efforts to reduce borrowings, this remains an issue for the company, with net debt totaling nearly $3 billion,” he added.
Leading the gainers were shares in grocer Tesco TSCO, +4.69%, which confirmed speculation that it had begun a review of the strategic options for its businesses in Thailand and Malaysia, including an evaluation of a possible sale of these businesses. Shares rose nearly 5%.
Just Eat shares JE, +0.54% rose 0.6% after Prosus, a spinoff of South African consumer internet group Naspers NPN, -0.70%, lifted its offer for the U.K. online food-delivery company to £5.1 billion pounds ($6.70 billion), stepping up a bidding fight for Just Eat with Takeaway.com TKWY, -1.62%.
