MARKET REPORT: Another two firms swept up by City merger mania

Merger mania gripped the City as investors digested two more takeover attempts of London-listed companies.

Trading desks across the Square Mile were alive with rumours as the acquisition spree showed no sign of slowing.

First up was Hyve Group, which saw its shares soar following an increased and final offer tabled by US-based Providence Equity to take the events organiser private.

And Watches of Switzerland also rose after talk of possible takeover interest.

Private equity firms have increasingly targeted the London stock market in a bid to gobble up British companies on the cheap.

Earlier this week, Medica (down 0.5 per cent, or 1p, to 213p), which provides services to NHS radiology departments, received a £269million bid from the London-based private equity vehicle IK Partners.

Hyve, formerly International Trade Exhibitions, has been the subject of several offer proposals from Providence Equity.

The private equity group made a first takeover approach at 101p a share and increased this to 105p towards the end of February.

Last month, it raised its offer for Hyve to 108p per share.

The latest bid of 121p a share valued the firm at £524m and represented a premium of around 12 per cent to the previous proposal.

Hyve said investors, which hold around 28.5 per cent of all shares, have given their support to the revised deal. Shares gained 4.4 per cent, or 5p, to 120p.

FTSE 250-listed Watches of Switzerland, home to brands such as Rolex, Patek Philippe and Omega, also found itself at the centre of takeover rumours following reports from the financial news site Betaville. 

Stock Watch – FireAngel

Fireangel, which makes smoke and carbon monoxide alarms, warned its revenue and profit would be lower than expected.

The group had hoped to secure two major contracts during the first quarter of this year. But it only landed one, with the second to be sign- ed later this year, meaning revenue for 2023 will fall short on its forecasts and profit should be ‘materially below market expectations’.

FireAngel shares tumbled 26.7 per cent, or 3p, to 8.25p.

The identity of the company circling Watches of Switzerland is unclear, Betaville said, although there was some suggestion it could be a luxury goods giant. 

Others following the situation suggested a private equity firm may be interested in the business, which prior to listing on the London market was owned by US firm Apollo. Shares, which floated at 270p in May 2019, jumped 7.7 per cent, or 58.5p, to 820p.

But despite the merger action, the FTSE 100 fell 0.3 per cent, or 21.07 points, to 7891.13 and the FTSE 250 dropped 0.06 per cent, or 11.55 points, to 19215.39.

Anglo American saw its production increase by 9 per cent in the first three months of the year compared to the same period in 2022.

The miner attributed the improvement to higher copper production from its new Quellaveco mine in Peru. Shares fell 3.4 per cent, or 86p, to 2426p.

The slump was felt across the sector amid lower metal prices.

Glencore shed 3.6 per cent, or 17.35p, to 469p, Rio Tinto fell 3 per cent, or 156.5p, to 4984.5p and Antofagasta slipped 2.6 per cent, or 39p, to 1478p.

Card Factory shares fell 3.6 per cent, or 4p, to 108.6p yesterday after announcing it had bought SA Greetings, a wholesaler of greeting cards and gift packaging in South Africa, for £2.5million.

IWG warned its business was taking a hit from soaring inflation and rising interest rates. The office landlord reported record quarterly revenue of £760million in the three months to March 31 amid demand for hybrid working.

Shares inched down 0.9 per cent, or 1.5p, to 168p.

Fund manager Jupiter increased its assets under management (AUM) by £600million to £50.8billion in the three months to March 31 despite investors pulling £900million from funds during the period. Shares rose 0.7 per cent, or 0.9p, to 132.9p.

Likewise, wealth manager Quilter highlighted improved equity markets and a dip in bond yields after its AUM rose 2 per cent to £101.9billion in the same period, compared with the previous quarter. 

Shares gained 2.9 per cent, or 2.35p, to 84.4p.