FTSE 250 movers: Jardine surges on offer while IWG downgraded

London's FTSE 250 was up 0.35% at 20,444.76 in afternoon trade on Tuesday.

Shares in Jardine Lloyd Thompson surged more than 30% after the insurance broker agreed to be bought by US professional services giant Marsh & McLennan for around £4.3bn.

Under the terms of the deal, Jardine shareholders will receive a cash consideration of 1,915p per share, representing a 33.7% premium to the closing share price of 1,432p on Monday.

RBC Capital Markets said this was "a very attractive" bid with little chance of another materialising.

"At 26.6x our 2019E earnings, we see the price as attractive for JLT shareholders. With a relatively high multiple for JLT, we see the potential for any interloper being low, and with the support of both JMH and management we expect that this deal will go through with few difficulties," analysts wrote.

Sirius Minerals continued to rack up strong gains after securing a supply deal to sell up to 2.5m tonnes per year of POLY4 - its flagship fertiliser product - to Brazilian fertiliser distribution company Cibra on Monday.

Paragon Banking Group was boosted after the specialist lender reiterated the guidance given at the half year in respect of volumes, margins and costs, and made further progress on growing its retail deposit base, which now exceeds £5bn.

Chief executive Nigel Terrington said: "In spite of the prevailing macro uncertainties we are well placed to benefit from scale economies in the commercial lending division, and the group continues to cement its position as a leading lender to professional landlords in the UK, underpinned by its 22 year history in this market."

Peel Hunt, which reaffirmed its 'buy' rating and gave a target price of 550p, noted that the consensus forecast is for PBT of £155.3m and EPS of 46.9p, with the buy-to-let pipeline 25% ahead of last year to support next year’s growth.

Serviced office firm IWG, the former Regus, was under the cosh as Credit Suisse cut the stock to 'underperform' from 'neutral' and chopped the price target to 200p from 245p. "We see risks to near- and mid-term reported numbers as growth accelerates, earnings per share vulnerability as and when the current cycle comes to an end, tangible pressure on reported earnings numbers from the implementation of IFRS16, and the potential loss of operational momentum following the departure of the CFO/COO," the investment bank said.

Also down in afternoon trading was Spire Healthcare, which slumped as it reported a drop in first-half profit and downgraded its annual guidance after an "unprecedented decline" in admissions of NHS patients.

The hospital operator's interim results, which had been largely flagged early last month, showed revenues down 1.1% to £475.6m but operating profit before exceptional and other items down 41% to £31.6m, or down 25% once exceptionals were added in. The dividend was held at 1.3p per share as directors reiterated their confidence in the 'reset' strategy announced in April, which aims to drive the share of private healthcare of the business to at least 80% of group revenues.

A day earlier, a story from DealReporter revealed that some minority Spire shareholders were "receptive to a new takeover approach from Mediclinic even if a bid were at a lower price than the previous offer", with 250p or 300p being an "acceptable" price.

Analysts at Morgan Stanley said: "As Spire adjusts to the new market environment, impairment losses have started to come through and, while Spire highlights a five year target of EBITDA of £200m, we see the path as unclear without a significant turnaround in trends, not just in the NHS business but also in Self-Pay and PMI where growth would need to accelerate."

IMI suffered in afternoon trading after it was downgraded to ‘underperform’ from 'neutral' at Exane BNP Paribas as the broker took a look at the UK capital goods sector. The broker also reduced the target price for the British-based engineering company's shares to 1,000 from 1,150p, highlighting structural issues at all three of its divisions, which it said will limit the company’s ability to grow with the sector.

Finally, travel firm Thomas Cook fell despite having its 'buy' rating and target price of 142p restated by Numis, with the broker dismissing the firm's difficult summer as a "one-off" due to the deterioration of the Turkish economy in the nation's row with the US.

Market Movers

FTSE 250 (MCX) 20,444.76 0.35%

FTSE 250 - Risers

Jardine Lloyd Thompson Group (JLT) 1,872.00p 30.73%
Sirius Minerals (SXX) 30.74p 4.99%
Ferrexpo (FXPO) 164.30p 4.42%
Paragon Banking Group (PAG) 473.40p 4.23%
Equiniti Group (EQN) 259.50p 4.22%
Hunting (HTG) 819.50p 3.87%
Indivior (INDV) 270.30p 3.80%
Kaz Minerals (KAZ) 480.40p 3.78%
Sanne Group (SNN) 666.00p 3.74%
Wood Group (John) (WG.) 749.80p 3.14%

FTSE 250 - Fallers

IWG (IWG) 214.80p -6.12%
Alfa Financial Software Holdings (ALFA) 156.40p -4.05%
Stagecoach Group (SGC) 156.60p -3.93%
Spire Healthcare Group (SPI) 162.60p -3.90%
IMI (IMI) 1,106.00p -2.90%
Rank Group (RNK) 177.33p -2.89%
Hochschild Mining (HOC) 159.30p -2.63%
Thomas Cook Group (TCG) 77.15p -2.34%
Playtech (PTEC) 496.70p -2.30%
FirstGroup (FGP) 95.00p -2.06%