MARKET REPORT: Rothschild taps market for £140m Turkish deal

Traders have had little cheer in the city so far this year, with a lack of M&A and fundraising activity.

But one man bucking the trend is adventurous businessman Nat Rothschild, who revealed he’s tapping the market for cash to fund a takeover at Volex.

Raising funds for expansion is what the stock market was made for, but in recent years it has been used to line CEO pockets and buy back giant stocks.

Under Rothschild, the power cord manufacturer has gone from strength to strength, supplying Tesla, the largest producer of all-electric cars, and Volkswagen.

Volex wants to buy Murat Ticaret, a Turkish manufacturer of complex wiring harnesses, for £137 million.

The deal will be partly financed by the sale of shares which will raise £55 million. The remainder will be paid from existing cash on the company’s balance sheet.

Volex will sell 21,818,181 new shares of common stock through a placement and retail offer at 275 pence per share.

Executive Chairman Rothschild said, “We believe this transaction is truly transformative for Volex, further diversifying our end market and customer exposure.”

A trader added, “It’s good to see a CEO being adventurous for once. So many are overly cautious, terrified of the current climate. That’s what the market is for, collecting money and taking risks.’

In addition to the sale of shares, Volex also posted a 17.6 percent increase in turnover to £565 million in the past six months and a final dividend increase of 8.3 percent.

Shares, however, fell 0.9 percent, or 2.5 pence, to 283.5 pence. There was little to cheer for investors as the FTSE 100 fell 0.8 percent, or 57.15 points, to 7502.03.

The FTSE 250 fell 1.3 percent, or 243.48 points, to 18327.97. The decision by the Bank of England to raise interest rates by 0.5 percent to 5 percent made for a grim session.

Stock watch – Mulberry

There was nerves in the city when Mulberry announced that its full-year results have been delayed by about a week.

The British luxury company insisted it only postponed its results for the year to early April “to give the company’s accountants some extra time to finalize its procedures.”

Mulberry “emphasizes that the revised announcement date has not come about as a result of concerns.”

But investors weren’t so sure and shares fell 1.2 percent, or 3 pence, to 252 pence.

Financials were hit, including the usually reliable 3i, which lost 2.6 percent, or 50 pence, to 1907 pence.

The private equity firm invests in a range of companies across Europe, including Action, a Dutch retailer.

But investors instead turned to safe havens, picking up drinks giant Diageo, up 0.8 percent, or 25 pence, to 3330.5 pence, and prospector Antofagasta, which gained 1.2 percent, or 17.5 pence, to 1493. pence.

Energy giants BP and Shell struggled equally, with 0.9 percent or 4 pence to 460 pence and 1.3 percent or 30 pence to 2333.5 pence, respectively.

The falls were not helped by the Church of England, which is selling its investments in the oil giants.

Church said it made the decision to sell its holdings by the end of the year “after concluding that none are in line with the goals of the Paris Climate Agreement, as assessed by the Transition Pathway Initiative.”

Even Premier Inn owner Whitbread couldn’t turn a profit despite a surge in hotel room bookings in the first quarter, especially in London, where tourists flocked to watch the King’s coronation.

But shares fell as investors worried fears of further inflation would soon bite. Shares fell 1.1 percent, or 37p, to 3355p.

GlaxoSmithKline’s vaccine trials for RSV, an infectious respiratory disease, proved successful and showed long-term protection for adults over 65 years of age.

The pharmaceutical giant announced the results of a clinical trial involving 25,000 people.

It found that a single dose of the injection, called Arexvy, was found to be 67.2 percent effective in preventing RSV lower respiratory tract disease.

RSV attacks the lungs, usually causing cold-like symptoms and, in severe cases, pneumonia.

RSV causes 117,000 hospitalizations and 14,000 deaths of people over 65 each year in the US, according to the pharmaceutical giant. Shares fell 0.9 percent, or 12.8 pence, to 1,359 pence.