It’s a fairly slow start for UK stock markets following the bank holiday weekend with attention very much focused on where European elections leave UK investors.
The FTSE 100 opens the trading week up 19 point (about 0.2%) up at 7,296.73 while the midcap FTSE 250 makes modest single digit declines to around 19,118 in the wake of gains made across European markets on Monday and positive Asian markets early on Tuesday, taking a break from US-China trade tensions.
SEE ALL OF TODAY'S RISERS AND FALLERS HERE
GALLIFORD REBUFFS BOVIS
On a fairly quiet day for corporate news investors are getting excited about the prospect of merger activity potentially heating up across the UK house building sector. This follows confirmation today of newspaper stories over the weekend that Galliford Try (GFRD) has rejected an approach for its Linden Homes and regeneration businesses from Bovis Homes (BVS).
Both companies today say that ‘preliminary’ talks took place between the two firms but they quickly came to nought. Bovis tells investors today that its proposed deal would have been worth £950m, involved £100m of Galliford Try's debt while Bovis would have issued shares to Galliford Try shareholders.
That would have left Galliford Try as a UK listed construction-only company, and while the deal looks dead in the water it does get investors rethinking the value of Galliford’s overall business.
Shares in the company have jumped around 7% to 571.5p, valuing the company at just shy of £598m, significantly below the value that Bovis was willing to pay. This could suggest that Galliford may come under takeover scrutiny from elsewhere down the line.
Shares in Bovis Homes flicker 2.5p higher to 997p.
INVESTORS PALLY ON AMIGO RESULTS
Amigo lends money on the basis that a guarantor with better credit history will step in and take over repayments if the main borrower no longer can, on APR rates of 49%.
Such eye-watering interest rates are evidently not putting borrowers off though with numbers hitting 224,000 at the end of last year.
Chief executive Glen Crawford called the year ‘the most significant in the history of our business’ after listing on the London Stock Exchange and gaining a place in the FTSE 250 index.
But it has not been an easy ride, the shares rally 4% on Tuesday to 223.5p, some way off the 275p IPO price in June 2018.
Crawford will stand down this summer for urgent medical treatment and be replaced by Hamish Paton.
The company has deliberately avoided contentious contracts (Brexit-related work for example) in favour of more reliable government and enterprise business. Shares in the Belfast-based business rally 4.5% to 604p, a record for the company since joining the UK stock market back in 2015.
SPORTS DIRECT IN HQ SALE AND LEASEBACK
Mike Ashley’s Sports Direct (SPD) has agreed to sell the freehold of its Shirebrook head-quarters to a Malaysian fund for £120m. But the leisurewear retailer, known for its pile ‘em high, sell ‘em cheap ethos, will sign a 15-year lease to remain the tenant.
This will free up cash sat on the balance sheet for extra working capital for Sports Direct in invest in the business.
Sports Direct shares nudge a fraction up to 281.8p, valuing the FTSE 250 retailer at just over £1.5bn.
The battle for control of high-cost credit company Provident Financial (PFG), the subject of a £1.3bn hostile takeover attempt by rival Non-Standard Finance (NSF), takes another twist after a major Provident shareholder refused to back the offer.
M&G, which is believed to own a 1.7% stake in Provident, has written a letter saying it will not back the offer, arguing that it does not believe that a combination with NSF and subsequent break-up of the enlarged group will create value for Provident Financial shareholders.
Shares in both Provident and NSF remain largely unchanged at 448.7p and 48.2p respectively.
Chains and power transmission product supplier Renold (RNO) booked a rise in annual profit, driven by strength in its chains division. Pre-tax profit for the year to 31 March rose to £11.2m, up from £1.4m on-year. Revenue increased 5.6% to £202.4m.
The company is not declaring a dividend but investors are impressed, bidding the stock more than 10% higher to 32p.