WS Atkins soars on talk of bid from US
FORGET Theresa May and Donald Trump, the City only had eyes for one special relationship today: American consulting engineer CH2M’s approach for UK rival WS Atkins.
The FTSE 250 firm’s shares surged 68p, or 4.9%, to 1468p as reports suggested the US company had contacted it over a potential $4 billion (£3.2 billion) merger.
Both companies work closely on major UK infrastructure projects, including the High Speed 2 rail link, the Thames Tideway supersewer and Crossrail 2. The report in The Times added that it was unclear how far the talks developed.
Atkins shares were a bright spot on an otherwise gloomy day for markets as Donald Trump’s visa ban sent buyers running for cover, with the FTSE 100 down 52.70 points to 7131.79. Shares in companies exposed to the South African rand tumbled on reports President Jacob Zuma is set to remove cabinet ministers who called for his resignation last year. Old Mutual fell 6.5p to 206.7p, Investec slipped 12.5p to 562.5p and private hospitals group Mediclinic dropped 25.5p to 785p as the rand weakened.
Vodafone bucked the trend when it rose 5.48p, or 2.8%, to 198.83p as it confirmed talks to break up its troublesome Indian business by merging it with the country’s Idea.
Barclays suffered a 5.65p or 2.5% fall to 224.95p after Berenberg downgraded the bank to Sell, arguing that the UK and US consumer credit cycles have nearly peaked and that Barclays’ strong investment banking arm could come under pressure this year.
“A sharper end to the credit cycle — in line with the 2002 recession — could reduce Barclays’ group earnings by 25%,” the broker warned.
Investors remained wary of Ocado, which dipped 0.4p at 244.3p ahead of tomorrow’s annual results. The online grocer remains one of the most shorted stocks on the LSE, with almost 20% of its shares on loan to short-sellers.
Observation wheels firm Challenger Acquisitions rose 0.93p, or 10%, to 10.3p as it revealed it was offloading its stake in wheelmaker Starneth, whose team was behind the London Eye, for $4.75 million.
The company said it would now just be an investor in wheels, adding that the move was “prudent” amid delays in building a wheel in Jakarta, Indonesia, its second investment after the New York Wheel.
@jamienimmo63