Deal too far for comparison site
UNIMPRESSED fund managers had probably seen Moneysupermarket.com Dave’s Epic strut ad on the TV. His excruciating twerk to the sound of the PussyCat Dolls’ Top Ten hit dressed in tight denim hot pants and high heels is enough to put anybody off the comparison website.
Major shareholders and potential new investors yesterday obviously refused to cough up more cash on buying more shares from founder and deputy chairman Simon Nixon who wanted to sell a further 35m, or 6.4pc, at around 269p a pop, via shop broker Citigroup, cuting his stake to 10pc. Nixon pulled the sale and told Citigroup to stand down after apparently seeing no takers when agreeing to reduce the offer to 4pc or 22m shares, instead of 35m.
Market-makers were quick to take evasive action and shares was sold down to 261p, with analyst Jamie Constable calling it ‘a placing too far’. They later rallied to close 9.7p lower at 276.3p.
Malcolm Morgan at Peel Hunt said: ‘Market perception of Moneysupermarket has transformed dramatically over the past nine months but the shares have got ahead of themselves.’ His target price is 250p.
Shares of bars and nightclub operator Eclectic Bar Group were as flat as a pint of homemade scrumpy, collapsing 41p or 44pc to 51.5p after the AIM-listed company reported morethan- doubled half-year pre-tax losses of £525,000, blaming increased competition and a smaller number of students drinking in their establishments.
Buyers were all over Advanced Oncotherapy like a rash and the close was 2.82p or 63pc higher at 7.38p after it announced Sinophi Healthcare will buy its LIGHT proton therapy system for £27m to be used in hospitals in China. Analysts now believe the company is best positioned to take advantage of Proton Beam Therapy becoming a more mainstream cancer treatment in the next five years. TyraTech edged up 5pc or 0.25p to 5.5p on hearing that its Vamousse headlice treatment would be distributed by CVS Pharmacy – the second largest pharmacy chain after Walgreens in the US. UK supermarket giant Tesco (4.3p cheaper at 239.35p) is also moving the product from the pharmacy section of its stores, to the main aisles and shelves.
Ten Alps climbed 19pc or 0.12p to 0.78p after renewing an existing contract after a competitive tender with Transport for London to create and manage a comprehensive, London-central, digital road safety educational campaign for pre- school children. The new contract is worth more than £1m a year, 30pc more than the previous contract. The Footsie did its best to remain above 7000 but wilted late to close 28.71 points off at 6990.97. Wall Street was the depressant, closing 292.60 points down at 17,718.54 after Federal Reserve policymaker James Bullard had warned overnight that zero rates were no l onger appropriate.
Dealers are fearful that once the US lifts interest rates, it would not be long before the UK Monetary Policy Committee followed suit. However, there appears to be a big split in the Bank of England’s nine- strong rate- setting team: Andy Haldane has said UK inflation is likely to turn negative next month, and the BoE could cut rates further.
Shares in Bellway hit a record high (up 2.74pc, or 55p to 2059p) after the housebuilder hailed ‘another tremendous set of results’ and brushed off fears of a slowdown in the property market. The stock has risen more than fivefold since the depths of the financial crisis and recession.
Peroni-brewer and takeover favourite SABMiller closed 20p down at 3645p. News of the agreed £70bn mega-merger between Heinz and Kraft Foods which creates the third-largest food and drink company in the world, poured cold beer over the chances of an ABIn- Bev bid for SABMiller. Brazilian private equity firm 3G Capital owns Heinz and still has a 21pc stake in ABInBev.
Chip designer ARM Holdings fell 73p to 1127p on profit taking after its heady gain of around 50pc since October. Broadcaster ITV eased 2.7p to 256.6p but Liberum Capital remains positive and has a target price of 310p. The broker believes there is a good chance Jeremy Clarkson could end up at the broadcaster after it was confirmed the BBC would sack him.
The absence of any mention of future cash returns to shareholders in the annual results left Card Factory 13.9p lower at 284.1p. Investec analysts had recently said the cash return in 2016 could be in the range of £29m to £76m. Fullyear underlying operating profits came in at £79.4m, up from £72.9m the year before.
Kofax soared 229.5p to 732.5p in response to an agreed 738p a share bid from Lexington, Kentucky-based Lexmark, well known for its printers. Kofax provides data services to financial, insurance and healthcare companies and will boost Lexmark.