Bid talk gives Convatec another shot in the arm
You wonder whether Karim Bitar is having second thoughts about agreeing to take the helm at Convatec, the medical technology group that makes colostomy bags.
Just a day after being unveiled as the boss, takeover rumours have surfaced that Swedish private equity group EQT may be mulling a bid. The shares jumped 5.9pc, or 7.85p, to 141.75p, valuing Convatec at around £3bn.
That’s some way shy of the float price two-and-a-half years ago of 225p, which gave the company a market capitalisation of £4.4bn.
February’s profit warning, which knocked shares to an all-time low of 118.5p, was the latest in a series of mis-steps. Convatec remained tight-lipped about the prospects for its business and those of chief executive-in-waiting Bitar, who is due to join in September.
Elsewhere, the builders provided the market’s other source of excitement with a triple dose of good news lifting the sector.
If demand for new homes is sentiment- driven, then the mood recently has been dominated by Brexit. So, the uK stepping away from a No-Deal departure from the Eu gave some support for groups such as Barratt, up 0.8pc, or 4.6p, to 594.6p, and Taylor Wimpey, up 0.2pc, or 0.35p, at 175.1p. A note from HSBC took a good look at the sector.
There was a raft of price target upgrades, while Persimmon (up 0.2pc, or 5p, at 2160p) and Bovis (up 1.7pc, or 18.5p, at 1105.5p) were singled out for special treatment as they were moved to a ‘buy’ recommendation from ‘hold’ by the bank. Crest Nicholson provided realworld support for HSBC’s positive stance as it said it had already secured 50pc of its sales for the year. The stock advanced 5pc, or 17.8p, to 370.8p with the City also cheered by the news it had poached new boss Peter Truscott from rival Galliford Try, down 2.4pc, or 16.5p, to 669.5p.
The FTSE 100 ended the session 18.71 points higher at 7196.29 with investors trying to get to grips with the implications of Parliament’s power grab. Shares in Carnival hit the rocks after the AngloAmerican cruise operator cut its annual profit forecast, blaming higher fuel costs and the strong dollar. The shares shed 8.5pc, or 351p, to drift friendless at 3800p. Colombia-focused oiler Amerisur Resources fell 16.4pc, or 2.76p, to 14.1p after it said its partners had struck out with its latest well after drilling more than two miles into the earth’s crust.
online retailer Mysale fell 26pc, or 4.58p, to 13p after a second profit warning in three months on the back of a ‘disappointing’ firsthalf performance. Plastics maker
Coral Products saw its price crushed after a profit warning. Stock plunged 46.9pc, or 5.75p, to 6.5p after a downturn in business from the automotive industry and significant delivery delays. Analytics group Big Sofa Technologies, dipped 4.1pc, or 0.17pc, to 4.08p despite a number of renewals for its visual insight system, a video-based knowledge sharing product.
Among the risers, mobile phone network billing firm Boku got a good reception after its pre-tax loss for the year narrowed massively to $3m (£2.3m) from $28.5m (£21.6m) in 2017. Shares climbed 13.4pc, or 11p, to 93p.
A trading update trumpeting a ‘very encouraging’ start to 2019 lifted vehicle tracking systems firm Quartix, 18.2pc, or 20p, to 265p. Elsewhere, superyacht painter GYG shares rose 4.6pc, or 2.5p, to 56.5p on the back of contracts to help build three yachts.