MARKET REPORT: Darktrace shares hit after KKR sells part of holding company

Darktrace’s shares plunged when one of its private equity backers dumped a major stake in the cybersecurity group.

A technology fund run by US private equity shark KKR revealed it had sold 19.4 million shares in the FTSE 250 firm, equivalent to a stake of around 2.5 percent.

The group sold the shares at a price tag of 425p each, a 7.8 per cent discount to the last closing price, giving a total sale value of almost £82.5 million.

Darktrace shares fell 7.4 percent, or 33.9p, to 427.1p after news of the sale.

The fund, known as NGT 1, initially backed Darktrace in 2016, five years before it made its stock market debut.

Despite the sale, KKR still remains an investor in Darktrace, with its second fund NGT II retaining a 7.3 percent stake in the company. The private equity group’s decision to sell follows a recent share price rise this month after Darktrace posted a strong set of half-year results.

At the time, the group also increased its sales forecasts for the year, predicting that rising geopolitical tensions and the increased risk of cyber attacks would drive demand for its products.

The FTSE 100 rose 0.6 percent, or 48.37 points, to 7930.92, as the blue-chip index continued its strong run and moved closer to a previous record high of 8012, reached in February last year. The FTSE 250 lost 0.09 percent, or 16.99 points, to 19724.32.

Markets have been boosted by growing hopes that interest rates will be cut soon after both the Bank of England and the US Federal Reserve kept rates steady this week.

Optimism was boosted earlier this week when Governor Andrew Bailey said cuts were “on the way” and the Bank could cut rates two or three times this year.

One of the biggest gainers was insurance group Phoenix, which rose 8.4 percent (or 41p) to 529.2p after strong annual results.

The company posted 2023 pre-tax profits of £617 million, up from £544 million the year before, while the amount of cash generated by its operations rose 35 percent to £2.02 billion.

Among those struggling in the top index was retailer JD Sports, which fell 6.3 per cent (or 7.35p) to 109.75p following dismal results from sneaker maker Nike. The US giant’s bosses warned it was losing market share, while sales in China and Europe fell short of expectations, raising fears of a wider fall in demand for sportswear.

Rival trainer retailer Frasers Group, which owns Sports Direct, also suffered as shares fell 1.4 per cent, or 11p, to 792p.

Gambling giant 888 rose 0.9 percent, or 0.8 cents, to 87.2 cents after avoiding fines from the regulator following a review of its license that opened in July last year.

Mid-cap IT company Computacenter announced at its annual general meeting in May that chairman Peter Ryan will step down after six years as director.

Pauline Campbell, one of the non-executive directors, will succeed Ryan.

Computacenter shares rose 0.2 percent, or 6p, to 2702p.