London’s FTSE 100 enjoyed a material recovery in afternoon trading to close Monday’s session up 0.6% at 7,062.29 points, while the more domestically-focused FTSE 250 ended 0.6% higher at 22,457.1.
This followed a positive start to trading in the US, where the S&P 500 rose 1.2% to 4,217.48 by 4.30pm UK time as concerns surrounding the US Federal Reserve’s accelerated rate rise timetable abated.
MORRISONS TAKEOVER POSSIBLE
In company news, shares in grocer Morrisons (MRW) finished 34.6% higher at 240.2p on hopes that private equity firm Clayton, Dubilier & Rice might raise its proposed offer for the UK supermarket chain, or that’s its offer might even flush out interest from other possible suitors.
Over the weekend, Morrisons, the UK’s fourth largest grocer by sales, said it had rejected a proposed 230p per share cash offer worth £5.52 billion from the private equity investor, saying it ‘significantly undervalued’ the group and its future prospects.
Under UK takeover rules Clayton, Dubilier & Rice has until 17 July to announce a firm intention to make an offer. Shares in Tesco (TSCO) and Sainsbury’s (SBRY) both rallied as investors bet that the whole sector could now be in play.
Elsewhere, digital services provider Capita (CPI) gained 9.1% to 41.1p on announcing that it would receive net cash proceeds of £172.5 million from the sale of the Axelos joint venture to PeopleCert International.
Capital also said it remained on track to deliver revenue growth in 2021, for the first time in six years.
AROUND THE MARKET
IT services and cloud hosing company SysGroup (SYS:AIM) reversed 6.5% to 43.5p, having swung to a modest annual profit as cost control helped offset falling sales.
SysGroup’s pre-tax profit for the year through March amounted to £0.21 million, compared to a year-on-year loss of £0.23 million. Its revenue fell 7% to £18.1 million.
Chocolate maker Hotel Chocolat (HOTC:AIM) shed 0.4% to 367.5p after agreeing to buy the 53% stake it doesn’t already own in Rabot 1745, the joint venture behind the group’s beauty offer, for a total cash consideration of just £4.
Consumer goods group Venture Life (VLG:AIM) shed 3.2% to 94p despite securing a credit facility from Santander UK and Silicon Valley Bank worth up to £30 million.
Career guidance and development platform Dev Clever (DEV:AIM) rallied 18.7% to 43.9p following news that it had secured a partnership with Dubai-based Aldebaron to bolster its international rollout plans.
Dev Clever also agreed to acquire education business The Inspirational Learning Group for £0.2 million in cash and 6 million Dev Clever shares.
Construction group NMCN (NMCN) slumped 24.1% to 150p as it struck a recapitalisation agreement involving a deeply discounted £29 million fundraising with Svella and other investors.
The deal included a £10 million convertible bridging loan, £14 million equity raising and a £5 million open offer, all at 20p per share, representing a 90% discount to NMCN’s closing price on Friday.
Sustainable fuels developer Velocys (VLS:AIM) descended 0.9% to 5.5p despite its aviation fuel using woody biomass residue having been used in a commercial flight by Japan Airlines.
Private equity investment trust ICG Enterprise (ICGT) edged 2p higher to £10.50 after reporting its highest ever quarter of realisation proceeds for the period to April 2021.
The trust also declared a 6p dividend for the quarter, a 1p increase year-on-year, and guided towards a 12.5% increase in total dividends for the year to January 2022 to ‘at least 27p’.