MARKET REPORT: Sausage maker’s shares sizzle amid merger mania: Devro soars after bid from one of Germany’s largest agricultural groups
Investors got a boost late in the week amid a spate of acquisitions on the London Stock Exchange.
The trading session was packed with M&A as a manufacturer of sausage casings. Devro shot up 62 percentor 119 pence, to 311 pence after an offer from one of Germany’s largest agricultural groups.
Saria, part of the Rethmann family empire, offered 316.1 pa shares (or £667m) for Devro, at a 65 percent premium to its closing price on Thursday.
Tasty: Saria offered 316.1 pa shares (or £667m) for Devro, which was a 65 per cent premium to its closing price on Thursday
Peel Hunt described the offer as a “knockout”, while AJ Bell called it “very generous”.
Saria said Devro would complement its Van Hessen sausage casings business and give customers access to a broader market. The German group employs around 10,500 people in 26 countries.
Devro Chairman Steve Good said: ‘We believe Saria’s understanding of our markets, strong financial position and cultural fit will benefit the group’s businesses and employees. Devro’s directors unanimously agreed to recommend that Devro shareholders accept Saria’s offer.’
But that was not the only offer of the day.
Curtis Banks joined the party, confirming that he was in “advanced discussions” about falling into the hands of a digital investment platform provider. Nucleus said he was considering a possible cash offer for self-invested personal pension providers. Curtis Banks, which was trading at 190 pence in May 2015, rose 25.7 per cent, or 68 pence, to 333 pence.
The FTSE 100 was up 0.2 percent, or 20.07 points, at 7,486.67, while the FTSE 250 was up 0.03 percent, or 5.36 points, at 19,545.70. Homebuilders plunged into the red after a gloomy forecast.
Berenberg said he cut profit forecasts for the sector by about 40 percent due to rising mortgage costs. The broker also cut the price target for most shares, with homebuilder Taylor Wimpey taking the biggest hit after shares fell 1 percent, or 1.05 pence, to 104 pence.
Imperial Brands added 1.2 percent, or 26 pence, to 2,126 pence after Deutsche Bank raised the tobacco company’s price target from 2,250 pence to 2,325 pence and reiterated a ‘buy’ rating.
Cigarette vendors have fared well during the pandemic, as people working from home found more time to enjoy their habit.
Meanwhile, JD Sports will review its wage policy after repeated shareholder revolts under controversial former boss Peter Cowgill.
The retailer will put more emphasis on stock-based pay for bosses, rather than the hefty cash incentives paid under Cowgill. It fell 0.9 percent, or 1.15 pence, to 124.55 pence.
Sofa seller ScS applauded a recent turnaround in fortunes after orders, which fell 14.4 percent between July 31 and October 6, rose 1.3 percent in the six weeks to mid- of November. He also launched a new share buyback program worth up to 3.1 million pounds, with shares rising 10.7 percent, or 15 pence, to 155 pence.
But LSL Property Services spooked investors after warning that the most profitable part of its business could be dragged down by a weaker mortgage market next year. It fell 9.9 percent, or 26 pence, to 236 pence.
Breedon rose 5.9 percent, or 3.4 pence, to 60.6 pence after the construction supplier said it was on track for a record profit this year. Revenue in the ten months to October soared 14 percent to £1.19 billion.
And in a rare victory for the London stock market, Conviction Life Sciences Company plans to list at 100p a share on a £100m listing later this year.
The newly formed investment firm said many life sciences and medtech businesses in the UK, Europe and Australia are “structurally undervalued”.