FirstGroup derailed by TransPennine setback
Train operator FirstGroup hit the buffers after it was stripped of the TransPennine Express franchise after months of delays and cancellations.
in a bruising setback, the service, which connects cities including Liverpool, Manchester, Leeds, newcastle, Edinburgh and Glasgow, will be taken over by the Government at the end of May.
it is the latest rail operation to be nationalised following Southeastern in 2021, northern rail in 2020 and London north Eastern railway in 2018.
Shares in FirstGroup, which also runs avanti West Coast, Great Western railway, South Western railway, Hull Trains and Lumo, fell 4.8pc, or 5.9p, to 117.4p.
Chief executive Graham Sutherland said it had ‘worked extremely hard to improve services’. But Transport Secretary Mark Harper said months of inconvenience for commuters and businesses spurred his decision, adding: ‘This is not a silver bullet and will not instantaneously fix a number of challenges.’ it halted FirstGroup shares in their tracks. The stock was up more than 20pc this year before the move, though some 7pc shy of pre-pandemic levels.
as the Bank of England raised interest rates from 4.25pc to 4.5pc, the FTSE 100 fell 0.1pc, or 10.75 points, to 7730.58 while the FTSE 250 dipped 0.04pc, or 6.99 points, to 19,266,30.
Fast fashion firm Asos, having plunged 23pc on Wednesday after reporting half- year losses of £290.9m, fought back to rise by 2.6pc, or 12.6p, to 500p.
Deutsche Bank cut its target price from 950p to 725p while Barclays lowered it from 625p to 500p. Takeover chatter reverberated around the City again as talks about deals continued.
Shares in troubled online estate agent Purplebricks crashed 29.3pc or 0.56p to a new record low of 1.37p after it said discussions about a deal with Strike would leave investors with very little.
Strike is backed by investors including TalkTalk founder Sir Charles Dunstone and Channel 4 Ventures. Founded in 2012, Purplebricks had a lot of success in its early years and shares once traded at around 500p each.
The ‘put up or shut up’ deadlines for suitors to make formal bids for two London-listed companies have been extended.
Dechra Pharmaceuticals (up 1.1pc, or 22p, to 3754p) said the Takeover Panel has agreed to push back the date at which Swedish private equity firm EQT must finalise its £4.6bn offer, by three weeks to June 2.
The bidding war for payments firm Network International looks set to play out for a few more weeks after a consortium of CVC and Francisco Partners was given until June 1 to table a formal bid. network (down 1.1pc, or 4p, to 371p) said talks over a 387p-ashare proposal ‘remain ongoing’.
Meanwhile, Canadian giant Brookfield asset Management has offered 400p a share, or £2.1bn. Brookfield has until May 19 to ‘put up or shut up’.
also in the crosshairs is John Wood Group, which reported firstquarter revenues of £1.25bn – less than a week before the deadline for US private equity predator apollo to table a formal bid.
apollo has until May 17 to make an offer. Having turned down four previous proposals, Wood agreed to engage with apollo last month after receiving a £1.7bn bid. Shares dipped 0.2pc, or 0.4p, to 221p.
S4 Capital, the advertising agency set up by Sir Martin Sorrell, said ai was helping it become more efficient, but higher interest rates, inflation, weak economic growth and geopolitical uncertainty meant many clients were looking for short-term solutions to drive sales and had to cut costs. Shares fell 2.2pc, or 3p, to 136p.