Metro a takeover target after FTSE 250 eviction

IT has been a torrid year for Metro Bank investors – and it may yet get worse still.

For the uninitiated, Metro has been rattled by an accounting error, its founder and chairman has said he will leave, and the lender will soon drop out of the FTSE 250.

But the up coming relegation could have further-reaching consequences, analysts warn.

Dropping out of the mid-cap index will limit the amount of funds which may be able to invest in it, as many focus primarily on FTSE 350 firms.

This, in turn, could squeeze its ability to raise cash from shareholders in future, according to Goodbody analysts, and result in it being snapped up by a High Street lender if it is unable to produce better returns for investors.

If Metro becomes a takeover target it will dash Metro’s dream of becoming a heavyweight challenger to the UK’s established lenders. It has spent years building up an estate of dog-friendly High Street branches at a time when most banks are turning online. Shares slipped 2.5pc, or 7p, to 274p yesterday, though they are down a staggering 90pc compared with a year ago.

Premier Foods’ shares have also suffered in the last year, down a cool 22pc from what they were trading at last September.

Many Britons may not have heard of Premier the company but will know its range of brands, which include Mr Kipling, Ambrosia and Oxo.

Focus on the company has intensified since it last week appointed a chairman, City veteran Colin Day, and chief executive, Alex Whitehouse. Former finance boss and interim chief executive Alastair Murray was handed a £480,000 pay cheque as he departed. Sources say £60,000 of this is an extra three months’ worth of the monthly £20,000 he got for stepping up into the chief executive role.

A strategic review of the firm is under way and speculation is rife that this could include the sale of five (or more) of its major brands, with cake-maker Mr Kipling thought to be in the line of fire.

Premier is keeping quiet on any possible sales, though it has tried to sell Ambrosia.

Perhaps the half-year results in November will shed some light on the matter. Shares rose 1.1pc, or 0.35p, to 32.5p.

The FTSE 100 was dragged into the red by a range of stocks going ex-dividend. This means anybody who bought their stock from yesterday would not be entitled to receive the company’s next payout to shareholders. The firms that fell included

Glencore, which shed 1.4pc, or 3.35p, to 239.5p, Greggs, which was 2.6pc lower, down 54p, to 2026p, and IWG, which lost 1.2pc, or 4.8p, to 412.2p. The Footsie closed down 0.6pc, or 40.09 points, to 7271.17 points, while the midcap FTSE 250 rose 0.2pc, or 30.45 points, to 19649.56 points.

Ultra Electronics shares fell 1.8pc, or 40p, to 2212p, after announcing BP executive Jos Sclater will succeed Amitabh Sharma as the group’s finance boss in December. North Sea-focused oil group

Enquest was boosted by news it has hired former BG Group operations chief Martin Houston as chairman from October 1.

Enquest also said that it has chipped away at its debt pile, which stood at £1.3bn by the end of June, compared with £1.4bn at the same time last year.

Shares closed up 7pc, or 1.29p, to 19.8p. Anglesey Mining has said it believes there could be much more ‘potentially mineable’ ore at a zinc, copper and lead site on Parys Mountain on Anglesey than it previously thought, sending its stock soaring 17.1pc, or 0.3p, to 2.05p.

■ ALTITUDE Group lost height after warning that sales haven’t taken off as much as management had hoped.

Revenue at Altitude, which creates websites, exhibitions and other services for businesses, is expected to have jumped 42pc to £5.4m compared with the first six months of 2018. Turnover was boosted by the acquisition of a US firm early this year.

But third and fourth quarter revenues will track ‘well below expectations’. Shares slumped 40pc, or 37p, to 55.5p.