London Market Update: M&A Activity Boosts Midday Trading, New York Closing Soon
Stocks had a mixed afternoon on Thursday, with the FTSE 100 looking uncertain, but some exciting takeover news brought some life into the London market. It’s a quieter day because of a public holiday in New York, but that hasn’t stopped some big news from shaking up the trading floor.
Renewi, a waste management company, is considering a bid from Macquarie, who came back to the table after backing away over a year ago. However, Direct Line turned down Aviva’s offer. Loungers, a popular cafe and bar chain, agreed to a takeover bid from a private equity firm, and there are even whispers of a Royal Mail owner takeover on the horizon.
The FTSE 100 index inched up 0.1% to 8,279.99 points, while the FTSE 250 rose 0.6% to 20,730.90 points, and the AIM All-Share stayed steady at 731.25 points.
In Europe, the CAC 40 in Paris and the DAX 40 in Frankfurt each saw increases of 0.5%.
For Direct Line, shares surged 42% while Aviva saw a 3.1% dip after their bid was rejected. This marks Aviva’s third bid for Direct Line this year, with Belgian insurer Ageas also attempting two unsuccessful takeovers. Financial analysts were not shocked by the rejection of Aviva’s offer, as it was only a slight increase from previous bids and fell below their expectations.
The investment bank Jefferies suggested that an acquirer may need to offer at least 270p per share for Direct Line to consider a deal. Meanwhile, sector peer Admiral saw a 2.9% jump in their shares.
Similarly, Royal Mail’s owner, International Distributions Services, may soon be under new ownership, with reports hinting at a finalization of the sale to EP Group. The Czech billionaire behind EP Group has made promises to maintain certain services and operations but may bring significant changes to the business to improve its efficiency in the long term.
Elsewhere, Renewi could see a shift in ownership, as Macquarie Asset Management announced a new potential takeover worth over GBP700 million. After rebuffing previous offers, Renewi now seems open to considering this latest bid, which has caused their shares to soar by 45%.
Lastly, Loungers have agreed to a GBP340 million takeover bid from Fortress Investment Group, propelling their shares up by 28%. This move marks a significant development for the cafe and bar operator, with potential changes on the horizon.
