London’s FTSE 100 jumped up 55.7 points to 7,605 on Monday as a spate of corporate action put a new lease of life in the market. Separate deals involving Just Eat (JE.) and London Stock Exchange (LSE) as well as an increase in private equity activity this year have got investors excited over the prospect of further mergers & acquisitions (M&A). Investors also bid up shares in various unloved large caps, among them Centrica (CAN) and Vodafone (VOD).
Online food delivery service Just Eat jumped 24.2% to 789.2p after agreeing to merge with rival Takeaway.com in an £8.2bn all-share deal that will create one of the world’s largest online food delivery platforms with 360m orders worth €7.3bn in 2018.
Also surging higher on merger excitement was the London Stock Exchange (LSE), which leapt up 13.7% to £64.46 on confirmation it is in talks to acquire data company Refinitiv for a total enterprise value of $27bn.
Together, the LSE and Refinitiv would be ‘the largest listed global financial markets infrastructure provider by revenue, with combined annual revenues of over £6bn in 2018 and would be well positioned to deliver attractive top line growth over the medium-term’, reads today’s statement.
Budget carrier Ryanair (RYA) gained altitude, the shares up 3% to €10.24 as a 21% fall in after tax profits to €243m, reflecting lower fares and higher fuel and staff costs, was slightly better than expected and the airline left full year guidance unchanged.
Mike Ashley’s Sports Direct International (SPD) slumped 10% to 207p as the market got its first chance to react to Friday’s delayed and disastrous full year results. These revealed a drop in underlying earnings before interest, taxation, depreciation and amortisation (EBITDA), as well as an alarming update on House of Fraser and a whopping tax bill from Belgium.
Elsewhere, TBC Bank (TBCG) ticked up 58p to £13 as Georgia’s largest banking group posted an 18.8% hike in first half profit and kick-started a share buyback of up to £20m.
Pork-to-poultry supplier Cranswick (CWK) fattened up 62p (2.4%) to £26.38 on an encouraging first quarter trading update - African Swine Fever in China boosted quarterly exports - and the complementary acquisition of Mediterrranean food products supplier Katsouris Brothers.
Building foundations specialist Keller (KLR) weakened 5.3% to 621p after it said first half pre-tax profits fell by 32% to £28.9, led by a plunge in revenues in Australia following a decision to wind down construction activity amid deteriorating market conditions.
Publishing play Reach (RCH) rose 4.4p to 90p on robust first half figures and the news chief executive officer (CEO) Simon Fox will be stepping down on 16 August to be succeeded by Jim Mullen, who was most recently the CEO of Ladbrokes Coral.
Alternative asset and corporate services specialist Sanne (SNN) crashed the best part of 30% to 530p after telling the market that it will miss full year expectations. The warning comes after pressure squeezed operating margins that will leave earnings per share ‘below its previous expectations’.
