SMALL CAP MOVERS: TT Electronics rejects takeover offers from Volex

A showdown is a hotbed between production specialists Volex plc and smaller competitor TT electronics after the latter twice rejected the former’s advances.

Volex announced on Friday that it has made two cash and share offers, with the first valuing TT at 129p per share and the second at 139.6p per share.

According to Volex, TT’s board has refused to accept the proposals, despite the tempting 77 percent premium offered to shareholders.

Volex chairman Nathaniel Rothschild was outspoken in his criticism of TT’s management.

“Despite the resilience of TT Electronics’ underlying businesses, the company has faced persistent challenges in recent years, which Volex believes have been exacerbated by execution failures by the board, including former and current management,” he noted.

Rothschild also blamed TT’s decade-low share price on these missteps, not least on a takeover strategy that ‘led to very disappointing results’ for the group.

TT’s share price immediately rose 35 percent to 107.5p after the offers came to light. That’s still a long way from Volex’s offer, implying a high degree of doubt about a future deal.

There was less drama for the AIM All-Share Index, which fell about half a percentage point over the week.

Most of these losses were felt after Tuesday’s opening bell, when British unemployment data from the ONS showed “some cracks appearing in the labor market,” according to the Deutsche Bank analysis.

Blue chip shares outperformed the juniors this week, with the FTSE 100 coming in flat at 8,067 on Friday.

MP Evans Group plc peaked at around 8 percent when the Dividend Aristocrat announced that full-year profits will be higher than expected thanks to rising crude palm oil prices.

Shortages in vegetable oil supplies are behind the increase, according to MP Evans.

Ondo InsurTech plc The stock price rose 15 percent after the company announced that Nationwide Mutual, one of America’s largest insurers, will roll out Ondo’s LeakBot water leak detection device in 16 US states.

Chairman Mark Wood said he was “delighted” that the relationship has turned into something potentially important for the company: “And of course it builds on several other important contracts we have in the US.”

In the weekly deletion news, challenger exchange Aquis agreed to be bought out by the Swiss SIX Exchange for 727p per share in cash, valuing the entire company at £225 million on a fully diluted basis.

As part of SIX, Aquis will be able to accelerate the company’s development and “compete more effectively on the European stage, while maintaining our entrepreneurial spirit,” CEO Alasdair Haynes said.

The offer came at a significant premium and Aquis shot to the top of the list of AIM movers with a 114 percent gain.

Audioboom Stocks rose more than 10 percent this week, mainly thanks to an upgrade to full-year expectations released Friday. It was the second upgrade in as many months.

Audioboom now expects adjusted pre-tax profits of $2.8 million (£2.2 million), up from October’s forecast of $2.5 million, which itself was increased from a previous estimate of $1.3 million.

In the energy sector Star Energy Group plc rose by 34 percent following the announcement of the sale of land in Alton, Hampshire to Pickerings Hire for £6.3 million.

Pantheon Resources plc rose more than 20 percent in response to an update on Alaska operations.

Pantheon has begun drilling on the Megrez-1 well, located in the Ahpun field in Alaska’s North Slope, while test targets include an estimated 609 million barrels of ANS crude oil and 3.30 trillion cubic feet of natural gas.

On the AIM-listed electronics group Solid State plc shares collapsed by 40 percent on Friday following the announcement that payments linked to a British government defense contract have been suspended pending the completion of a strategic defense review next summer.

Although Solid State expects that the orders will be received in due course, they will fall outside the current financial period.

Zoo Digital fell by a quarter after the publication of the interim results. Although revenue rose 29 percent year-on-year and gross profit increased almost fivefold, the cloud-based software group warned that orders will be “constrained” in the next quarter.

Investment company listed on the AIM Tekcapital plc fell by almost 20 percent due to a technical write-down after a £1 million equity round.

Finally, manufacturer of flooring products The share price of Victoria plc was reduced by a third over the week. A trading update on Friday suggested that ‘demand for the floor coverings market will return – albeit at very low levels of 20-25 percent below 2019 levels due to broad macroeconomic factors’.