MARKET REPORT: Acquisition speculation puts Aviva on a missile
Aviva has become the latest household name to find itself at the center of takeover rumours.
Shares in the FTSE 100 insurer rose 5.3 per cent, or 20.7p, to 409p after reports suggested three foreign bidders were considering making a bid.
Germany’s Allianz, Canada’s Intact Financial Corporation and Scandinavian group Tryg are among those believed to be interested. At least one was said to be considering an offer of £6 a share. Aviva declined to comment.
But that did little to calm speculation in the City.
‘Is Aviva the next FTSE 100 takeover target? The market certainly seems to think so,” said Russ Mold, chief investment officer at AJ Bell.
Rumors: Aviva shares rose after reports suggested three foreign bidders were considering making a bid.
‘Aviva remains one of many stocks in the UK market that do not look appreciated but still offer potential for long-term value creation.
‘One of the obvious times to buy a company is when it has made solid progress with a turnaround programme, as this de-risks the investment.
‘Aviva has freed itself from the shackles of being a conglomerate and sharpened its focus as a result of asset disposals and a new drive to grow, making it a stronger business. Naturally, that makes you more attractive to a potential suitor.
Aviva already won a vote of confidence earlier this week from the City when Jefferies raised its rating to “buy” from “hold” and increased the price target to 480p from 445p.
The insurer’s profits filtered through the blue-chip index, with peers Legal & General rising 3.2 per cent, or 6.7 pence, to 217.1 pence, Prudential adding 1.5 per cent, or 12.4p, to 867.6p, Beazley rose 1.7 per cent, or 9p, to 542p and Phoenix rose 1.9 per cent, or 8.9p, to 467.1p. The FTSE 100 rose 0.6 per cent, or 43.04 points, to 7,494.58 and the FTSE 250 gained 0.8 per cent, or 132.34 points, to 17,732.32.
Oil prices further stabilized at the end of a turbulent week, with Brent crude hovering around $84 a barrel. But the prospect of lowering fuel costs proved fruitful for airline stocks.
Easyjet rose 2.5 per cent, or 11 pence, to 449.3 pence, IAG added 0.8 per cent, or 1.25 pence, to 156.35 pence and Wizz Air rose 0.6 per cent, or 10.5p, up to 1,930.5p.
Shell also turned a profit after signaling improved trading conditions in the third quarter for its gas business.
Michael Hewson, chief market analyst at CMC Markets, said: “With the sharp rise in oil prices seen since June, one would expect to see a significant improvement in oil margins during the quarter, however, there was little mention of that. in today’s production update.’
Shares in the oil giant rose 1.9 per cent, or 49 pence, to 2,581.5 pence.
De La Rue investors took solace after the banknote printer raised its profit forecast for the half-year to the end of September. The shares rose 1.5 per cent, or 0.9p, to 61.4p.
SRT Marine Systems, which provides surveillance to monitor fisheries, sank 6.8 per cent, or 3p, to 41p after saying it would likely report a loss of £4.5m for the six months to the end of September .
Petra Diamonds suffered even bigger losses as the company, which mines in South Africa and Tanzania, fell 9.3 per cent, or 6.2p, to 60.8p after a drop in the selling price of its stones precious
Spirent Communications fell into the red in what can only be described as a depressing week.
The FTSE 250 company, which tests 5G mobile networks and Wi-Fi, plunged 31 per cent on Wednesday after issuing a profit warning and saying the telecoms market is “extremely challenged at the moment” with its biggest customers cutting spending.
Spirent Communications fell a further 2.2 per cent, or 2.1p, to 91.7p yesterday after Deutsche Bank Research cut its price target from 200p to 110p.