MARKET REPORT: Wood Group takeover threat over share price

The city’s trading floors were abuzz after the John Wood Group was attacked by an activist investor who demanded the company raise its share price – or risk being taken over.

The oilfield services and engineering firm has struggled this year, with its share price down 33 percent.

But they rose 2.8 percent, or 3.55 pence, to 128.6 pence after Sparta Capital warned it would have to buy back some of its shares to avoid becoming a takeover target.

Sparta, led by former Elliot Management activist fund manager Franck Tuil, wrote to John Wood that the group has enough money to buy back shares and should.

The Footsie has been beset by takeovers in recent years, fueled by the weak pound and private equity sharks inundated with dry powder to spend.

It is feared that John Wood, who employs about 35,000 people in 60 countries, could be next for the hungry buyout industry.

The FTSE 100 fell 0.2 percent, or 17.02 points, to 7472.17 and the FTSE 250 fell 0.6 percent, or 106.56 points, to 18,824,901.

Purplebricks took a hit after an activist investor stepped up his call to oust the broker’s chairman.

Lecram, a top ten shareholder, said ‘nothing is improving’. It pointed to Purplebricks’ losses and said it burns £2m of cash a month.

The investor is calling for chairman Paul Pindar to be replaced by Harry Hill, who founded Countrywide and Rightmove.

Stock Watch – Vertu Motors

Vertu Motors is to buy a family business that has existed for more than six decades in a deal worth £182 million.

The car dealer acquires 28 dealerships with a takeover of the Helston motor group.

Vertu boss Robert Forrester said it was a “very proud moment” for his company, which will add Volvo and Ferrari to its portfolio.

As Helston is based in the South West of England, the number of dealers Vertu will own in the area will increase from four to 32.

It rose 13.4 percent, or 6.5 pence, to 54.9 pence.

Matters were not helped by Purplebricks posting a 16 per cent drop in sales to £34.5m for the six months to October. Shares fell 7.2 percent, or 0.72 pence, to 9.26 pence.

Back in the top index, Fresnillo was among the biggest gainers after Morgan Stanley raised the miner’s price target from 730p to 800p. It rose 2.2 percent, or 19.2p, to 885.4p.

British American Tobacco maintained it was on track to meet its sales targets for the year, despite an industry slowdown.

The group expects sales to grow between 2 and 4 percent, and said the industry is still in decline due to the post-pandemic recovery in emerging markets. It dropped 3.1 percent, or 105.5p, to 3305p

The London Stock Exchange Group fell 6.4 percent, or 508p, to 7380p after UBS downgraded its rating from “buy” to “neutral” and lowered its price target from 9000p to 8500p.

But things looked good for Balfour Beatty after the infrastructure company said in its latest trading update that revenue for the year should be about 5 percent more than the previous 12 months, which brought in £8.3 billion.

Earnings are expected to exceed market expectations. Shares rose 1.6 percent, or 5.4 pence, to 337 pence.

City broker Numis returned after a delay in deals and deteriorating market conditions. Sales were down 33 per cent to £144.2m for the year to September and profits down 72 per cent to £20.9m.

It slashed bonuses and said staff costs were down 24.3 per cent to £74.9m. Shares fell 1.5 pc, or 2.8p, to 180.8p.

Meanwhile, professional services firm K3 Capital rose 8.3 percent, or 25 pence, to 325 pence after confirming a takeover offer.

Private equity firm Sun Capital submitted an offer of 350 pence per share, which Q3 said was a 16.7 percent premium over Wednesday’s closing price.

In the travel industry, the founder of On The Beach is stepping down as CEO after 18 years at the helm.

Simon Cooper, who founded the package tour group in 2004, will step down from his role in 12 months before moving to the new role of founding director. Shares fell 4.8 percent, or 6 pence, to 119 pence.

Finance chief Shaun Morton will be the new CEO. Sales for the 12 months to September rose to £144.1 million compared to £21.2 million a year earlier.

It made a profit of £2.1 million, after a loss of £36.7 million in 2021.