Share sale ru­mours weigh on Meg­gitt

The Daily Telegraph - Business - - Business - Latoya hard­ing

SHARES in Meg­gitt fell yes­ter­day af­ter Bloomberg re­ported the en­gi­neer was con­sid­er­ing sell­ing up to $600m (£455m) of new stock to help it brace for a po­ten­tial sec­ond virus wave.

Sources said that the com­pany, which spe­cialises in com­po­nents and sub-sys­tems for the aero­space, de­fence and se­lected en­ergy mar­kets, was work­ing with ad­vis­ers to re­view eq­uity and debt fund­ing op­tions.

One mea­sure un­der con­sid­er­a­tion is a share sale equal to as much as 20pc of the com­pany’s is­sued cap­i­tal.

An of­fer­ing could be an­nounced as early as this month, although no fi­nal de­ci­sions have been made, and Meg­gitt may also choose not to pro­ceed with a trans­ac­tion.

How­ever, the news sent shares fall­ing 12.7p to 282.5p.

It came as Euro­pean eq­uity mar­kets handed back some of Wed­nes­day’s gains to close in the red as ner­vous in­vestors kept a close eye on stim­u­lus talks in Wash­ing­ton and China-US ten­sions.

The FTSE 100 un­der­per­formed against its con­ti­nen­tal peers due to the pound’s strength on the back of a less pes­simistic out­look by the Bank of Eng­land. The Lon­don bench­mark in­dex fell 1.27pc to 6,026.94, with in­ter­na­tion­ally ex­posed com­pa­nies such as Glax­oSmithK­line and Unilever end­ing the ses­sion lower.

In the eu­ro­zone, the Frank­furt Dax and Paris CAC fell 0.5pc and 0.98pc re­spec­tively.

In­surer Aviva was one of the big­gest FTSE 100 ris­ers af­ter re­veal­ing its in­ter­na­tional busi­ness could be “man­aged for long-term share­holder value” – a state­ment which an­a­lysts said pointed to­wards a pos­si­ble sale.

Citi’s James Shuck said such a move could cre­ate “sig­nif­i­cant value”, which would even­tu­ally send Aviva shares up as much as 50pc.

It ended 13.2p higher to 297.5p, a rise of 4.6pc.

Else­where, Serco dropped 27.39p to 142.01p af­ter its first-half re­sults pointed to loom­ing un­cer­tainty. The out­sourcer’s rev­enue was up 23pc to £1.82bn in the first half of the year, with profit ris­ing from £6.7m to £76.4m.

Those re­sults were in line with ex­pec­ta­tions, but an­a­lysts cau­tioned the road ahead looked un­cer­tain, with doubts over how long a boost from Covid-re­lated work could last.

Mean­while, chem­i­cals group Syn­thomer rose 6.4p to 301.8p on the FTSE 250 af­ter it re­stated guid­ance for 2020 and con­firmed it was hop­ing to re­turn to the div­i­dend list this year.

The group’s profit be­fore tax dropped 16.8pc in the first half of the year, fall­ing to £58.4m.

But it said there had been “no ma­te­rial dis­rup­tion” to its oper­a­tions, adding it ex­pected to see more nor­malised trad­ing lev­els as de­mand re­bounded. Mor­gan Stan­ley an­a­lyst Char­lie Webb said the group had a “bet­ter than ex­pected” June and July.

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