£455m deal is cemented with a 6pc rise in shares
YOU can buy a heck of a lot of asphalt and cement for £455m. That’s what construction materials supplier Breedon
Group has paid for Northern Irish rival Lagan Group.
As well as a foothold in the Emerald Isle, Breedon gains a cement plant, nine quarries, 13 asphalt plants and nine readymixed concrete sites. Jealous?
To fund it, Breedon has taken on a new £150m loan and has tapped up investors for £170m.
Peter Tom, Breedon’s chairman, said: ‘Over the last eight years we have pursued a successful buyandbuild strategy which has established Breedon as the largest independent construction materials business in the UK and the acquisition of Lagan is another strategic step for us.’
Despite being asked for cash, the deal was well received by investors and Breedon’s shares jumped 6pc, or 4.7p, to 83p.
The FTSE 100 bumbled along with its fingers in its ears to block out the International Monetary Fund’s downbeat assessment of the UK economy, rising 0.39pc, or 27.85 points, to 7226.05.
If a room full of wealthy middleaged men in expensive pin-striped suits floats your boat, look no further than BP, Fresnillo, Mediclinic International, Smurfit Kappa and St James’s Place. Astonishingly, these FTSE 100 big hitters didn’t have a single female on their executive committees on June 30, 2017, according to trade body Investment Association.
Sticking with the blue- chips, analysts wasted no time in kicking wounded advertising giant WPP following the mysterious departure of chief executive Sir Martin Sorrell. Investec gave it a ‘Sell’ rating and cut its target price from 1100p to 1037p, while ratings agency Moody’s downgraded it from ‘Stable’ to ‘Negative’.
Christian Azzi, of Moody’s, said: ‘Sir Martin Sorrell’s resignation comes at a time when the company is already facing a number of operational challenges and introduces uncertainty over the strategy and ultimately the structure of the group going forward.’ WPP shares fought off the attack for most of the day before closing down 0.6pc, or 7p, at 1104p.
Legal & General, on the other hand, rose 0.6pc, or 1.7p, to 269.7p despite HSBC trimming its target price from 320p to 315p.
On the FTSE 250, specialist emerging market fund manager
Ashmore rallied after it posted its strongest inflow into its funds since June 2013. The asset manager had managed £53.5bn of savers’ cash at the end of March, up from £48.6bn on December 31, a 10pc increase. Shares hopped 3.8pc, or 15.2p, to 411.2p.
In the small caps, analysts at Peel Hunt upgraded motor insurance provider Sabre Insurance for the quality of its underwriting and for being one of the ‘more differentiated’ insurers out there. Its shares rose 2pc, or 5p, to 252p.
LED lighting firm Dialight also got some broker treatment. Investec slashed its target price from 790p to 660p as it battles a component shortage. Shares slipped 1.5pc, or 8p, to 516p.
On Aim, oil and gas exploration firm Ascent Resources soared after it put itself up for sale.
It has had a number of ‘expressions of interest’ but none has resulted in a firm offer yet. Shares flew 22.9pc, or 0.2p, to 1.08p.
Pelatro boasted of bagging a £1.2m contract to provide marketing software to the Asian subsidiary of a major western European telecommunications firm with 6m customers. Shares boomed 9.1pc, or 7p, to 84p.
There was nothing greased lightning about shares in oil filtration specialist Filta Group, despite the firm reporting a 34pc increase in full-year revenues. Shares slumped 1.6pc, or 3p, to 190p.