FTSE 250 movers: Takeover bids send Provvy and Dairy Crest soaring
London's FTSE 250 was up 0.2% in afternoon trading on Friday, with Provident Financial and Dairy Crest pulling the market higher as investors enthused about the takeover bids received by the companies.
Sub-prime lender Provident Financial racked up healthy gains after receiving a £1.3bn offer from smaller rival Non-Standard Finance, whose founder and chief executive John van Kuffeler was chief executive and then chairman of Provident for 22 years until 2013.
Russ Mould, investment director at AJ Bell, said: "This deal looks ballsy and Non-Standard Finance could be punching above its weight. It seems like an opportunistic move to kick out the Provident management team and for van Kuffeler to regain control of his former empire."
Meanwhile, Cathedral City owner Dairy Crest surged as it agreed to be bought by Canadian dairy Saputo Inc for around £975m.
Mould said investors should be pleased, as the cash offer "gives them a chance to get out of a fairly pedestrian business and at a price that hasn’t been seen since September 2017".
Serco was on the rise after Stifel bumped the stock up from 'sell' to 'hold' and Barclays raised its target price from 140p to 145p. Peel Hunt, who was also at the presentation, noted that despite weaker market growth, recent strong order intake means guiding to 3-4% organic rev growth in 2019 a, accelerating to circa 5% in 2020. Also the UK government outsourcing playbook "reflects much of Serco’s four principles therefore an important and positive development. Seems to have real political backing".
Go-Ahead climbed after JPMorgan raised its target price for the stock from 1,466p tp 1,519p. "Go-Ahead’s H1 results show a fairly stable Bus performance and a stronger Rail performance due to improved Southeastern revenue growth. Increased FY expectations are primarily due to Rail (Southeastern), a 1x P/E event. Given the lack of material weakness from London Bus so far, we have upgraded our group forecasts by roughly 5%," said analysts
Stobart Group flew higher after it confirmed the sale and purchase agreement through which its wholly-owned subsidiary Stobart Aviation was disposing of its shares in Everdeal Holdings, through which it owns Stobart Air, had become unconditional.
Metro Bank gained as it was awarded £120m from the fund set up with cash from Royal Bank of Scotland designed to boost competition in the small business banking sector, with Starling Bank getting £100m and ClearBank £60m.
Conversely, CYBG, which owns Clydesdale Bank, Yorkshire Bank and Virgin Money UK, saw its shares dive into the red after missing out on the funds distributed by the Banking Competition Remedies body.
"We had expected the group to have been a front runner in the bidding, especially following its takeover of Virgin Money, so the failure to receive an award comes as a blow to the investment case. Pool A funds would have been used to enhance the group’s SME franchise," said a note from analysts at Shore Capital.
Other fallers included diversified financials IG Group and Plus500, which led the index lower as they dropped back down after strong trading in Thursday's session.
FTSE 250 (MCX) 19,280.19 0.23%
FTSE 250 - Risers
Provident Financial (PFG) 589.00p 15.17%
Dairy Crest Group (DCG) 633.50p 14.14%
Metro Bank (MTRO) 1,430.00p 9.66%
Indivior (INDV) 107.75p 8.47%
Go-Ahead Group (GOG) 2,072.00p 5.71%
Serco Group (SRP) 127.90p 5.09%
Vivo Energy (VVO) 139.10p 4.49%
TBC Bank Group (TBCG) 1,470.00p 4.11%
Stobart Group Ltd. (STOB) 160.60p 4.02%
Funding Circle Holdings (FCH) 369.25p 3.75%
FTSE 250 - Fallers
IG Group Holdings (IGG) 574.00p -5.82%
Plus500 Ltd (DI) (PLUS) 782.50p -4.98%
CYBG (CYBG) 187.50p -4.97%
Bakkavor Group (BAKK) 166.20p -2.24%
TalkTalk Telecom Group (TALK) 97.70p -1.96%
BlackRock Smaller Companies Trust (BRSC) 1,310.00p -1.87%
Galliford Try (GFRD) 701.00p -1.82%
Inmarsat (ISAT) 393.50p -1.72%
Travis Perkins (TPK) 1,263.00p -1.67%
Acacia Mining (ACA) 252.40p -1.64%