Autos and aero engineering group GKN (GKN) continues to fight for its independence on Thursday as it again urges shareholders to resist the hostile takeover by turnaround specialist Melrose (MRO).
GKN has written to shareholders describing the takeover attempt as ‘entirely opportunistic’, and again insists that the £7.4bn shares offer ‘fundamentally undervalues’ the business.
Melrose has previously tabled a deal that, at current share prices, would be worth 397p per share and leave GKN shareholders with a 57% stake in the enlarged Melrose. GKN has responded by unveiling its own restructuring plan that would include handing around £2.6bn back to shareholders.
Shares in GKN remains flat in early trade on Thursday at 411.6p, while Melrose nudges a couple percentage points higher at 224.9p.
The FTSE 100 is up 45 points or so in early trade at 7,259.56.
CONVATEC BEATS LOWERED FORECASTS
It is an otherwise relatively quiet day for company news, although 2017 full year results from UK medical devices firm ConvaTec (CTEC) catch the eye. The figures show adjusted operating profit falling 3.3%, bogged down by supply issues at its top two divisions and lower sales from new products.
But forecasts had already been lowered and revenue growth of 4.5% comes as a pleasant surprise, as does the 5.7% lift to the full year payout. That’s why the share price climbs close on 4% to 205.4p, although still below the 225p IPO price of October 2016. The stock had hit highs of 344p early last summer.
The company insists that there will be no job losses or change to its fundamental strategy, and investors may be reassured by the apparent show of confidence stemming from the firm’s 10% increase in the dividend.
RELX shares nudge 2% higher in early deals to £14.87.
INSURER SUFFERS FULL YEAR LOSS CATASTROPHE
Property and casualty insurer Lancashire (LRE) sees its stock slump more than 5% to 620.5p on Thursday as the group admits that it expects 2018 will be another challenging year for the industry.
That statement heads the group’s swing into the red for the full year to 31 December 2017. Lancashire chalked-up a hefty £72.9m pre-tax loss versus the £150.4m of profit in 2016 thanks to losses as natural disasters make 2017 ‘one of the most severe years for catastrophe losses to the industry,’ the company spells out.
Gene cell therapy designer Oxford BioMedica (OXB) sees its stock surge as it unveils a new collaboration for its Haemophilia treatment. The deal, with Nasdaq-listed biotech company Bioverativ, will see Oxford BioMedica handed a $5m upfront payment.
But the real excitement for investors is the promise of possible future development milestone income that could hit $100m or more down the line. That explains today’s 13% share price rally to 12.16p, valuing Oxford BioMedica at 375m.
STADIUM WELCOMES £45.8M OFFER
Shares in AIM-listed electronics engineer Stadium (SDM:AIM) soar 42% on Thursday as the board recommend a £45.8m takeover. The offer comes from fellow engineer TT Electronics (TTG), which serves the automotive, aerospace and healthcare markets.
The deal looks timely with Stadium’s attempts to shift up the value chain seeming running out of steam in recent months.
Stadium shares jump to 118.5p, just a fraction off the 120p per share offer price, which implies that the market believes that the deal is pretty nailed on to complete and that there is little chance of an alternative offer emerging. TT Electronics shares also nudge higher, up more than 3% at 217p, valuing the business at a little more than £350m.
Oil prices extend gains on Thursday from the previous session, pushed up by a weak dollar and by comments from Saudi Arabia that it would rather see an undersupplied market than end a deal with OPEC and Russia to withhold production.
Gold prices are also higher, supported by a weaker dollar and as investors buy the yellow metal as a hedge against inflation after a faster-than-expected rise in US consumer prices last month.
Going ex-dividend today are several big-hitting companies, including AstraZeneca (AZN), BP (BP.), Royal Dutch Shell (RDSB) and Unilever (ULVR), which all trade without entitlement to their latest dividend payout, trimming 24.4 points off the FTSE 100, according to Reuters calculations.