£800m investor sell-off wallops medical giant
WOUND-dressing maker
ConvaTec Group sank towards the bottom of the FTSE yesterday after two key investors sold off more than £800m worth of shares.
Private equity investors Nordic Capital and Avista sold 171m and 79m shares respectively at 322p each, for a total of £805m.
As a result, ConvaTec, which also focuses on treating conditions like diabetes, saw £265m wiped off its market value.
Following the sale, Nordic still owns a 7.3pc stake in the firm while Avista retains a 3pc stake.
The sell-off marks a reversal of fortunes for ConvaTec which listed on the UK market in October 2016. It was upgraded by analysts at JP Morgan and Credit Suisse on Monday after posting a strong quarterly update at the end of last week. Shares slipped 4pc, or 13.6p, to 330.4p.
The FTSE 100 strayed further below last week’s record highs during the day yesterday before finishing flat. It fell just 0.01pc, or 0.81 points, to 7524.95. Trading has slowed as investors wait for a development in the Middle East after four Gulf states severed ties with Qatar this week amid terrorism allegations.
But this tension, combined with UK election risk and US political uncertainty, led the price of gold to hit its highest level in seven weeks. Investors tend to flock to gold in times of uncertainty due to the precious metal’s relative stability and perception as a safe-haven asset.
This sent Randgold Resources shares up 2.7pc, or 200p, to 7700p, while Acacia Mining neared the top of the FTSE 350 index, up 3.8pc, or 10.9p, to 296.7p.
The FTSE 250 fell 1pc, or 213.83 points, to 19,654.84, marking its worst day since the end of April, as investors shunned domestic stocks ahead of the election. Russian gold miner Petropavlovsk led gains after demonstrating its value to shareholders amid threats of a boardroom coup, with a strong set of results.
It reported a 1.5m ounce increase last year in so-called non-refractory reserves – this is a type of ore which can most easily be processed for gold. It announced a £12.4m exploration budget for 2017.
Petropavlovsk’s top brass will likely hope the results distract shareholders from its ongoing, complicated boardroom row.
Shareholders Renova, Sothic, and M&G want to replace founder Peter Hambro and three nonexecutive directors at the firm, criticising corporate governance.
On Monday, Russian media said Renova, run by Ukrainian billionaire Viktor Vekselberg, plans to use Petropavlovsk’s London-listing to launch a huge gold conglomerate. Shares rose 7.3pc, or 0.56p, to 8.3p. Carclo also had a strong session after posting a strong set of results for the year ended March 31. It saw revenues increase by 16.2pc to £138.3m over the year, while profit more than doubled to £12m from £5.2m.
Carclo, which creates lighting systems for medical, industrial, aerospace, and luxury companies, began making LEDs for Aston Martin and McLaren supercars last year. This has quickly become one of the firm’s biggest growth areas.
It was also boosted by its operations in Bangalore, India, and the UK. Shares rose 3.9pc, or 5.5p, to 146.75p.
A reassuring trading update saw oil and gas explorer Genel Energy win back some of the investors put off by its recent leadership exodus. The last few months have seen the two co-founders, Nathaniel Rothschild and Tony Hayward, announce their exits.
But Genel rose yesterday after the firm said it continues to perform in line with expectations. Shares rose 2.6pc, or 2.25p, to 89.5p.