Challenger bank up 18pc as takeover talks begin STOCK WATCH
SHARES in challenger bank
Aldermore Group rocketed as it confirmed it was in talks to be bought by South African lender First Rand.
The Reading-based bank said it had received an indicative proposal from South Africa’s biggest lender and was likely to recommend a firm offer of 313p per share, a 22.2pc premium to Thursday’s closing price.
Founded by former Barclays executive Phillip Monks, Aldermore was among a spate of challenger banks to emerge from the financial crisis to fill a gap in lending to small businesses. However, many are now struggling against low interest rates, with rival Shawbrook bought by private equity groups earlier this year.
Aldermore has been one of the better performers, with profits up 32pc during the first half. First Rand owns UK car finance firm Moto Novo and wants to expand in the UK. Aldermore’s shares soared 18.6pc, or 47.5p, to 303.5p.
The offer lifted the sector, with
Virgin Money climbing 4.1pc, or 11.2p, to 285.2p, and One Savings up 3.9pc, or 14.6p, to 393.5p.
Having closed at a record high on Thursday, the FTSE 100 lost some of its gains as the pound recovered amid dollar worries.
Sterling was boosted by weaker inflation data from the US and Theresa May’s office saying she could have ‘more to say’ about a Brexit financial settlement at next week’s European summit.
The FTSE 100 typically moves in the opposite direction to the pound, as many of its members make revenue in dollars.
It closed down 0.28pc, or 20.8 points, at 7535.44.
Miners gave markets a boost after Deutsche Bank analysts raised estimates on commodities.
They have predicted that copper prices will be boosted by a market deficit amid a slowdown at major projects. With buy recommendations from Deutsche, BHP rose 1.64pc, or 22.5p, to 1398p. Glen
core was up 2.4pc, or 8.65p, to 376.6p and Rio Tinto climbed by 3pc, or 107.5p, to 3688.5p. Troubled oil explorer Genel
Energy got a lift after announcing that it had hired William Higgs from rival Ophir Energy as chief operating officer. He will replace Paul Schofield, who is stepping down on Monday.
Genel’s share price has plunged since 2014 amid disappointing results from its key Taq Taq field in Iraq. It is now focused on providing gas to Turkey. Shares rose 2.1pc, or 2.75pc, to 134.25p.
Asset manager Ashmore Group soared 7.2pc, or 25.3p, to 378.5p as it announced a £4.7bn increase in assets and said investors were increasingly focused on its specialist area of emerging markets.
Waste management company
Renewi slumped after it was downgraded from outperform to neutral by Credit Suisse.
Analysts said the firm had outperformed the European utilities sector by around 31pc since reports in May 2016 of its merger with German group VGG, and the deal was now largely reflected in the share price.
But they also predicted the UK arm would not return to profitability until March 2021, and said Canada was affected by delayed commissioning on an anaerobic digestion plant. Renewi fell 5.2pc, or 5.4p, to 99p. Paper and packaging maker
Mondi continued to weigh on the markets following its profit warning on Wednesday.
Bosses blamed currency fluctuations and higher wood, energy and chemical costs as they said fullyear results would be ‘ modestly below market expectations’. Shares fell 1.7pc, or 33p, to 1912p.
Fears on cost pressures also hit peers Smurfit Kappa, down 2.3pc, or 50p, to 2180p, and DS Smith, down 0.04pc, or 0.2p, to 486.3p.