Pub stocks cheered on by wave of dealmaking
INVESTORS toasted pub and restaurant stocks as the industry gears up for a flurry of takeovers.
Former Greene King boss Rooney Anand revealed he has received backing from one of the world’s biggest investment management firms, Oaktree, as part of a £500m swoop on the beleaguered UK sector.
They have put £200m into RedCat Pub Company, set to be bolstered with £300m of debt, to take advantage of the release of billions of pounds of pent-up demand when lockdown is lifted, in what is predicted to be a ‘roaring 20s’.
It follows hot on the heels of Wetherspoons – the owner of 875 drinking holes that’s run by the outspoken Tim Martin – which raised £94m in equity to buy up independent pubs that go bust.
The preparation for a wave of dealmaking comes as there is increasing confidence that Britons will be able to eat and drink out again by the summer.
FTSE 250-listed Wetherspoons jumped 3.1pc, or 39p, to 1300p.
All Bar One-owner Mitchells & Butlers surged 8.9pc, or 29p, to 353.5p, while City Pub Group was up 10.6pc, or 11p, to 115p and Revolution Bars gained 11.2pc, or 2.7p, to 26.8p.
Wolverhampton-based Marston’s, which has been on the up since it rejected a £666m takeover bid from Platinum Equity Advisors, climbed 3.8pc, or 3.65p, to 100.2p, taking its gains over the last week to more than 33pc.
Traders also took a shine to travel companies as ministers revealed they are mulling plans for a Covid vaccine passport that could allow those who have had their jabs to travel this summer.
British Airways- owner IAG added 2.6pc, or 3.95p, to 157.65p, while no-frills rival Easyjet rose 3.9pc, or 31.2p, to 828p and cruise operator Carnival by 3.3pc, or 43.5p, to 1370p.
On The Beach had a rougher day, however, with shares flat at 355p, after it warned holiday bookings were still very weak.
Insurance payouts from cancelled events in 2020 drove a £36m loss at insurer Beazley – but it too surged, closing the day up 14.9pc, or 48p, at 369.2p.
It was a mixed end to the week for London’s two major indexes, with the FTSE 100 dropping 0.2pc, or 14.39 points, to 6489.33, while the FTSE 250 rose 1.2pc, or 257.57 points, to 21066.87.
Mining behemoth BHP ( up 0.5pc, or 9.5p, to 2044.5p) took the crown as the Footsie’s biggest company from Ben & Jerry’s maker Unilever (down 2.1pc, or 87p, to 3980p), according to data from Refinitiv.
The Anglo-Australian group was worth £157bn last night, compared with Unilever at £146bn.
Brent crude was trading at its highest level since last February – shortly before stocks and commodity prices went into freefall as Covid spread.
A barrel of oil was worth $59.32 last night as hopes that vaccine rollouts will increase demand for the black stuff.
The price is a far cry from lows of $19 last year but still short of the almost $70 it was trading at in January 2020.
Shell rose 2.7pc, or 34.2p, to 1280.2p last night, but rival BP fell 1.1pc, or 2.9p, to 252.05p.
This week the oil supermajors posted record annual losses of £14.5bn and £13bn respectively.
Over on Wall Street, the Dow Jones and tech-heavy Nasdaq index were both up in early trading as monthly figures showed there was a small rebound in the number of new jobs created in the US last month.
Forty-nine thousand jobs is still a smaller number than many will have been hoping for, but it looked like ‘another one of those ‘Goldilocks’ reports that please everyone’, as IG’s chief market analyst Chris Beauchamp said.