Croda International spikes on bid chatter

Shares in Croda International were inflated by bid speculation on Thursday with more than 0.25m shares in the chemicals group traded in a half-hour period.

Reuters reported that "multiple traders" had cited bid rumours around the company, with Germany's Evonik cited as a prime potential suitor.

From a largely flat day for the FTSE 250 stock, the price spiked almost 4%, to sit 2.8% higher to 2,911p at 15:16.

Other traders said there did not seem to be much substance to the rumors but a note earlier this year from Swiss research firm Baader Helvea identified Croda as among obvious M&A targets in the sector, while a note from HSBC on Wednesday argued Croda would be a beneficiary of raw material inflation.

Brenda Kelly at London Capital Group added: "At the moment the rumours seem rather vague to be honest. Back in October the same rumours were circling and we had a similar bounce in the share price when it was mentioned that Dow Chemical and DUpont were potential bidders for Croda."

She suggested that Croda's profit warning last summer has seen many investment banks tipping the company as a takeover target.

"Until we hear something of substance, I remain unexcited."

The speculation seemed to be linked to several other mooted deals in the sector, including between Switzerland's Clariant and Evonik, while Amsterdam's DSM has been lifted by rumours of an offer from Evonik.

There were also reports in March that €15.36bn-valued Evonik had been on the hunt for speciality chemicals companies.

At its current price, Croda is valued at £3.79bn.