MARKET REPORT: KKR’s £9bn Italy bid boosts telecom shares
Telecom companies received a boost yesterday after private equity giant KKR dove into Telecom Italia with a £9 billion bid.
The deal, if approved by the company’s board of directors and the Italian government, would be one of the largest European private equity buyouts in history. It would total £28 billion, including Telecom Italia’s £19 billion mountain of debt.
KKR’s offer was a 45 percent premium to Telecom Italia’s closing price on Friday. It sent the company’s shares on the Italian stock market up 30.2 percent.
KKR has landed Telecom Italia with a £9bn offer that, if approved, would be one of the largest European private equity buyouts in history
The group said KKR has taken a “friendly” approach based on publicly available information and will now conduct four weeks of due diligence.
The offer raised the prospect of a bidding war as rival private equity firms CVC and Advent said they were “open” to discussions with the company.
It also fueled the prospect of private equity firms approaching other telecom giants, pushing shares in Vodafone and BT soaring.
Russ Mold, investment director of AJ Bell, said: “The Italian deal could spark new bidding speculation, especially as private equity is rich in cash, interest rates are low, money is cheap and such financial buyers are on the hunt for companies that consistently have cash. can generate money. ‘
Inventory Monitoring – ADVFN
Shares in financial data site ADVFN skyrocketed more than 20 percent after controversial businessman Dan Horsky increased his stake to 9.7 percent.
Horsky was jailed in 2017 for hiding more than $220 million in offshore banks and evading more than $18 million in US taxes over 15 years.
The retired Israeli-born business school professor is one of three businessmen who plan to take over the data company.
Former CEO Yair Tauman increased his stake this year from 9.4 percent to 18.3 percent, while Ron Izaki owns 4.3 percent through a company he owns.
Shares were up 20.4 percent, or 15p, to 88.5p.
Vodafone closed 3.2 percent or 3.62p at 117.24p and BT rose 2.5 percent or 4.05p at 164.7p.
Banks were boosted by expectations of a rate hike from the Bank of England at its next policy meeting in December.
The Bank kept interest rates at the record low of 0.1 percent this month and Governor Andrew Bailey said over the weekend the Bank “should step into action” if inflation continued with a fever.
Mold said bank stocks are seen as potential beneficiaries of an interest rate hike and tighter monetary policy.
He added, “A strong economy should help their profits and their ability to return cash to shareholders through dividends and buybacks, too.”
Natwest shares closed 1.4 percent or 3.1p at 223.7p and Barclays climbed 2 percent or 3.78p to 194.74p.
HSBC rose 1.2 percent or 5.25 pence to 436.95 pence. They helped pull the FTSE 100 up slightly by 0.4 percent or 31.89 points to 7255.46. The FTSE 250 gained 0.3 percent or 62.79 points and closed at 23429.7.
Royal Mail shares rose a further 2.9 per cent, or 14.3p, to 512.8p after announcing a string of stellar results last week that it announced a £400m payout to investors.
Shares in the postal service rose 9.8 per cent on Thursday after it said a surge in parcel delivery netted the company a profit of £315 million in the six months to September 26.
Mecca Bingo and Grosvenor Casinos owner Rank have agreed on a £77.5 million VAT refund from the tax authorities plus £5.5 million in interest. Shares fell 0.7 percent, or 1p, to 150p.
Technical products supplier Diploma said annual profits are up 44 percent from a year earlier to £96.6 million.
The company FTSE 250 makes seals and controls for specialist equipment and provides various instruments and services for the healthcare sector. It said sales rose 46 percent to £784 million over the same period.
Chief executive Johnny Thomson said: “Despite the uncertainties in the market, I remain confident in our ability to deliver attractive long-term growth at sustainably high margins.”
Diploma stocks bounced 8 percent, or 256p, to 3460p.
New electric vehicle charging station maker Pod Point rose 2.5 percent, or 6p, to 248p after the government said new homes must have electric vehicle charging stations by 2022.
Ahead of an indicative review of the FTSE indices next week, AJ Bell said electronic equipment distributor Electrocomponents and veterinary pharmaceuticals Dechra Pharmaceuticals appears poised to enter the FTSE 100.
Shares in Electrocomponents were up 0.2 percent or 3p to 1255p, while Dechra Pharmaceuticals fell 1.4 percent or 75p to 5290p.
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