Takeover speculation lifts GKN shares by 5pc

CHATTER among traders suggested FTSE 100 engineering firm

GKN could be about to be wooed by a big bid.

The talk was that the global company is rumoured to be the likely target of a takeover by a Chinese company. It is thought the bid could be for as much as 450p a share – well above the price it started the day at, 311p.

The tittle-tattle was enough to make it the greatest riser on the FTSE as shares climbed 4.8pc, or 14.9p to 325.9p – their highest price since July 2015.

If GKN is about to be preyed on, it would fulfil speculation that the aerospace and defence industry could be the next in line for a round of merger and acquisition activity.

Last month activist investor Elliot Advisors built up a 5.2pc stake in

Meggitt, which helped push the share price up almost 12pc over August. Yesterday Meggitt crept up 0.8pc, or 3.5p to 471.8p.

Or perhaps the tech sector takeovers are not yet done. Intellectual property firm IP Group gained 5.3pc, or 10p to close at 200p, while

Imagination Technologies advanced 5.7pc, or 13p to 241.25p. Ascential took a tumble as it announced an accelerated book build – a speedy share sale – which was to close at midnight on Thursday. The sale was initially announced by Bank of America Merrill Lynch on Wednesday night.

It was thought that some 70m shares in the business-to-business media and exhibitions company could come to market, representing some 17.5pc of those in issue.

Actually 80m – or 20pc of shares – were to be sold. The shares were being offloaded on behalf of private equity firm Apax and Guardian Media Group for a price of 250p, which was a discount of 5.6pc to the share price at Wednesday’s close.

GMG’s stake in the business will fall from 22.4pc to 14.9pc after it offloads around 56.9m shares. It is the largest shareholder in the business. Apax and GMG will reduce their representation on Ascential’s board after the placing. Apax’s Tom Hall and David Pemsel of GMG will step down from September 5. Peel Hunt has a buy rating on Ascential with a target price of 280p. Ascential shares fell 3.8pc, or 10p to 255p.

Self-storage firm Safestore climbed on a strong third-quarter trading update. A website relaunch has driven the number of new enquiries up 10pc. Safestore said like-forlike revenue was up 6.6pc to £28.6m in the quarter.

Revenue growth was stronger in the UK division than in Paris, and overall storage occupancy is 74.8pc at 3.7m square feet. Safestore completed its acquisition of Space Maker in July for £ 40.9m and opened a newly redeveloped store in Wandsworth in August. Four more openings are set for the coming weeks in Birmingham, Altrincham, Chiswick and Paris. Shares were up 4.8pc, or 17.7p at 390p.

Morses Club offers loans, which it collects from customers at their home. Shares slumped yesterday despite a confident update after Numis reduced its rating on the stock. Morses has increased its customer numbers by 2.4pc to 208,000, largely driven by acquisitions by building its territory.

The firm issued £66m in credit in the 26 weeks to August 26, some 16pc more than the same period a year ago. Morses said it has started to focus on higher quality lending. The firm, which listed on the stock market in May this year, is set to announce its maiden dividend in its interim results, due October 7.

Chief executive Paul Smith said the firm was well placed to benefit as uncertainty caused by the EU referendum outcome is likely to cause mainstream lenders to tighten their underwriting criteria further. Shares fell 2.6pc, or 3p to 114p.

AIM-listed 600 Group plunged as it reported profit had halved to £1.2m in the year to April 2. Revenues at the engineering company, which designs machine tools and laser marking systems, were up 3pc to £45.3m in the period, but the net operating margin slipped 0.4 percentage points to 5.2pc. The group said it continued to implement structural changes. Shares fell 10.5pc, or 1p, to 8.5p.