DFS falls 10pc as largest investor sells 26m shares

FURNITURE retailer DFS dropped heavily as its biggest shareholder halved its holding in the business.

Advent International had held a 24.1pc stake in the business, which has more than 100 stores across the UK. Yesterday the private equity firm offloaded 25.7m shares in the sofa company.

Advent sold the shares to institutional investors at £2.40 each, pocketing a total of £61.7m. It’s not the first time the investor has reduced its stake in DFS, which it originally bought back in June 2010 and listed on the stock market in March 2015.

A year ago it still owned more than 50pc of the business, but it offloaded 14.1pc in April this year.

The share price was higher then – Advent sold that round of shares for £3 each.

Advent, a US business, spreads its investments among healthcare, retail, technology, industrial and financial services companies. It looks for business it thinks are wellpositioned in their industry but have the potential to improve, typically investing between £40m and £800m to take a majority shareholding.

Other businesses it has been involved with include Poundland, HMV and mental health specialist The Priory Group.

Nicholas Hyett, equity analyst at Hargreaves Lansdown, said: ‘Having floated DFS on the stock exchange last year it’s not surprising to see Advent winding down its position in the business. However, the decision to do so now might suggest it has concerns about the future health of the UK economy.’

DFS shares plunged 9.56pc, or 25.2p, to 238.5p.

The FTSE 100 finished down 1.4pc, or 97.25 points, at 6693.26.

Just five stocks finished in the black for the day, among them

Rolls-Royce (up 0.7pc, or 5p, to 712.5p) as Citigroup raised its rating on the business to ‘buy’ and

Paddy Power Betfair (up 4.1pc, or 355p, to 8935p) which upped its profit guidance for the year.

Pharma firms weighed heavily on the stock market as jitters travelled across the pond after US lawmakers called for a price fixing probe to determine whether healthcare firms colluded to set prices for insulin and other diabetes drugs.

HSBC and Numis both cut their target price for Hikma Pharamaceuticals, the greatest FTSE 100 faller of the day. It was off 6.8pc, or 119p, to 1626p.

Lamprell was keen to deliver some good news after it reported a first-half loss last month.

The engineer announced it had completed the construction of a rig for offshore drilling contractor Ensco. Lamprell had won the contract for the rig, which will be located in the United Arab Emirates, in April 2014.

The business has four more under construction, which should be delivered over the next six months.

But the announcement was enough to offset investor jitters about the oil industry after the price of the black stuff fell for a fifth consecutive day. The crude oil price was down 1.8pc to $45.5 a barrel yesterday. Lamprell lost 0.7pc, or 0.5p, to 72.75p.

Money broker Tullett Prebon rose as it reported revenue of £216m in the three months to September 30, up 15pc on the same period last year.

Revenue this year to date is up 7pc at £603m, boosted by the weak pound, with around 60pc of revenue reported in US dollars.

The business, which was previously headed up by star fund manager Terry Smith, said it is working towards getting regulatory approval for its acquisition of part of its rival Icap.

Numis has a ‘buy’ rating on the stock, which it estimates will make at least £80m of cost savings over the medium-term from the purchase of two of Icap’s businesses. Shares surged 4.3pc, or 15.9p, to 383.5p.

Investment firm Marlowe climbed as it announced an acquisition.

The company, which focuses on buying and developing outsourcing and support services business, is buying Titan Fire and Security for up to £750,000. It will initially pay £450,000 for the business, which provides fire protection services.

Marlowe moved up 6.7pc, or 20p, to 317.5p.