London Market Midday Update: M&A Activity Boosts Momentum after New York Closing

Stocks were a bit all over the place this Thursday afternoon, with the FTSE 100 struggling to find its footing. However, some exciting merger and acquisition news brought some life to the London equity market. It’s shaping up to be a pretty calm day due to a holiday in New York.

Renewi, a waste management company, is considering a bid from Macquarie, who came back to the negotiating table after stepping back over a year ago. On the other hand, Direct Line turned down an offer from Aviva. Loungers, a cafe and bar operator, accepted a bid from a private equity firm, while rumors suggest that the sale of Royal Mail owner is nearing completion.

The FTSE 100 index inched up by 0.1%, while the FTSE 250 rose by 0.6%, and the AIM All-Share barely moved at all.

Direct Line shares soared by 42% while Aviva fell by 3.1% after Aviva’s bid was dismissed. Aviva offered Direct Line shareholders 112.5 pence per share in cash and 0.282 of a new Aviva share for each Direct Line share, valuing Direct Line at around GBP3.26 billion. This was the third bid Direct Line received this year, with previous attempts valuing the company at 233p and 239p per share. Some experts think an acquirer may need to offer at least 270p per share.

Amidst the merger activity, Admiral, a peer of Direct Line, saw its shares rise by 2.9%. While there isn’t any news of a bid for Admiral, it’s common for companies in the same sector to see movement when takeover talks begin elsewhere.

Daniel Kretinsky’s EP Group is nearing the purchase of Royal Mail’s owner, International Distribution Services, with promises to maintain certain aspects of the business. Reports suggest that the sale could be finalized in the next two weeks. Unions have been in discussions with Kretinsky’s team, and while there are some reservations, the Communication Workers Union described the meetings as positive.

Renewi may be looking at a new offer from Macquarie Asset Management worth over GBP700 million. The cash offer of 870 pence per share spiked Renewi’s shares by 45%. Loungers, on the other hand, saw a 28% increase after backing a GBP340 million takeover offer from Fortress Investment Group.

It’s always interesting to see these market movements and potential acquisitions. It’s exciting to see how these deals will play out in the coming days and weeks. This is definitely a space to keep an eye on if you’re interested in the world of finance and investment.