A series of acquisitions and takeovers sets the news agenda for the final trading day of the week with activity among large, mid and small cap stocks.
FTSE 250 chemicals group Elementis (ELM) is to boost the size of its personal care business with the $360m acquisition of SummitReheis. This will give Elementis a strong position in the antiperspirant market as the target business provides critical components for this $13bn industry. The deal is expected to deliver earnings and free cash flow accretion in the current financial year and triggers a 6.1% rise in Elementis’ share price to 291.9p.
Reckitt Benckiser (RB.) is to spend $16.6bn on acquiring child nutrition products group Mead Johnson, as hinted earlier this week. The news coincides with Reckitt’s full year results which reveal 8% rise in operating profit to £2.41bn and 7.1% rise in the final dividend to 95p per share. Chief executive Rakesh Kapoor says the business is targeting 3% like-for-like net revenue growth in 2017.
FIH (FIH:AIM), formerly known as Falkland Island Holdings, has received a 300p per share takeover bid. The offer has come from Staunton Holdings which is a business linked to the family of FIH chairman Edmund Rowland. The offer represents a 27% bid premium, although it is still below the 400p+ level at which the shares trades a few years ago. FIH has suffered from delays in developing an oil and gas industry in the Falklands Islands, which was meant to create a significant inflow of visitors to the island where it runs shops and provides a range of support services.
David Buttress has resigned as chief executive of takeaway food ordering group Just Eat (JE.) due to ‘urgent family matters’. He will work full time until the end of March, upon which chairman John Hughes will have an executive leadership role while the company tries to recruit a new CEO. The shares fall 6% on the news to 521p.
Private equity group Advent has sold its remaining 12.1% stake in DFS Furniture (DFS) for 228p per share, a small discount to last night’s closing price of 231p.
Greene King (GNK) claims to have had a ‘strong Christmas’ with 4.5% rise in like-for-like sales over a three week festive period. It saw £7.4m go through its tills on Christmas day alone, up 6% on the previous year. This all sounds very positive, yet the market is not fooled by the upbeat tone of the statement with the shares declining 2.6% to 683p. Third quarter trading has actually slowed versus the previous three months. Its ‘Pub Company’ division like-for-like sales growth is 0.8% versus 1.3% at the half year stage.
Amur Minerals (AMC:AIM) shoots up 23% to 15.49p after updating the estimate size of its Kun-Manie project in Russia. The new resource statement is 101.3m tonnes of material grading 1.03% of nickel equivalent. It says the amount of metal in the ground is worth $10.5bn at current prices. That’s the oldest trick in the book when it comes to miners hyping up their projects. It is misleading to investors to use in-situ values as there is no consideration to the cost of extracting, processing and transporting the metal to customers. This will be difficult in Amur’s case as its project is located in a very hard-to-reach area with limited infrastructure.
