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

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

Trading desks across the Square Mile were abuzz with rumors as the wave of takeovers showed no sign of slowing down.

The first was Hyve Group, which saw its shares rise after an increased and final offer from the American Providence Equity to take the event organizer off the stock exchange.

And Watches of Switzerland also stood up after rumors of possible takeover interests.

Private equity firms are increasingly targeting the London stock market in an attempt to gobble up British companies cheaply.

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

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

The private equity group made an initial takeover approach of 101 pence per share and increased it to 105 pence at the end of February.

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

The latest offer of 121 pence per share valued the company at £524 million and represented a premium of about 12 per cent over the previous proposal.

Hyve said investors, who own about 28.5 percent of all shares, have supported the revised deal. Shares gained 4.4 percent, or 5p, to 120p.

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

Stock watch – FireAngel

Fireangel, manufacturer of smoke and carbon monoxide detectors, warned that sales and profits would be lower than expected.

The group had hoped to secure two major contracts in the first quarter of this year. But it has secured only one, with the second set to be signed later this year, meaning revenues for 2023 will fall short of forecasts and earnings will be “substantially below market expectations.”

FireAngel shares fell 26.7 percent, or 3 pence, to 8.25 pence.

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

Others following the situation suggested that a private equity firm may be interested in the company, which was owned by US-based Apollo before listing on the London market. Shares, which floated at 270p in May 2019, rose 7.7 percent, or 58.5p, to 820p.

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

Anglo American saw its production increase by 9 percent 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 his new Quellaveco mine in Peru. Shares fell 3.4 percent, or 86p, to 2426p.

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

Glencore lost 3.6 percent, or 17.35p, to 469p, Rio Tinto fell 3 percent, or 156.5p, to 4984.5p and Antofagasta fell 2.6 percent, or 39p, to 1478p.

Shares of Card Factory fell 3.6 percent, or 4 pence, to 108.6 pence yesterday after announcing it had bought SA Greetings, a greeting card and gift wrap wholesaler based in South Africa, for £2.5 million.

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

Shares fell 0.9 percent, or 1.5 pence, to 168 pence.

Fund manager Jupiter increased its assets under management (AUM) by £600m to £50.8bn in the three months to March 31, despite investors withdrawing £900m from funds in that period. Shares rose 0.7 percent, or 0.9 pence, to 132.9 pence.

Similarly, asset manager Quilter highlighted improving stock markets and a fall in bond yields after assets under management rose 2 percent to £101.9 billion over the same period, compared to the previous quarter.

Shares gained 2.9 percent, or 2.35 pence, to 84.4 pence.