Potential bid sees Cambian shares surge

Market report Hannah Burley

Cambian Group shares surged 34 per cent after the social care services firm confirmed it had received a potential takeover offer worth £405 million from Caretech.

The two firms are now “in discussions” after Caretech made a preliminary offer comprised of 77p per share in cash and an exchange of 0.348 of a new Caretech share for each Cambian stock.

It effectively values each Cambian share at 220p each, though a full cash alternative has been floated at 200p per share.

The news sent Cambian shares up to 199p at the close of the session, although both firms stressed that there was no certainty that a firm offer would be made. A deadline for a formal bid has been set for 5pm on 7 August.

Meanwhile, the pound staged a minor recovery after diving on the back of two ministerial resignations on Monday. Sterling was up 0.2 per cent against the US dollar at at $1.327 and nearly 0.4 per cent versus the euro at €1.132.

The FTSE 100 index was up 4.05 points at 7692.04 when the markets closed.

David Madden, market analyst at CMC Markets UK, said: “Today’s upward move is likely to be driven by short covering, and it is worth noting the political situation in the UK is still fragile.”

The biggest risers on the FTSE 100 included Coca-cola HBC, up 2.9 per cent at 2,678p, and Hargreaves Lansdown, up 2.8 per cent at 2,070p. The biggest fallers on the FTSE 100 included Severn Trent, which dropped 3.4 per cent to 1,930p, and Royal Bank of Scotland, down 2.3 per cent at 244.6p. Shares soared after assurances earnings would “improve significantly” as international deals and new warehouses start to bear fruit. The London broker saw its stock market value slump after axing its chief executive and warning over a hit to earnings from Brexit costs.