Now we are a takeover target, Babcock warns
THE chief executive of Babcock has warned the firm is a takeover target and could be the next defence group to fall into private equity hands.
A buyout spree has swept UK plc this year, with fellow FTSE 250 defence contractor Cobham in the midst of a £4bn takeover by US private equity giant Advent International. Babcock boss Archie Bethel told the Mail: ‘As long as the share price is so undervalued, it is always a vulnerability.
‘As long as it stays at a low price, there is always a threat that private equity or another company sees the true value in it.
‘It’s frustrating that more people are not buying our shares.’
Bethel said he did not know how much the shares should be worth, but analysts at Liberum and Jefferies have target prices of 720p and 825p respectively.
Babcock shares, which were close to 1300p in early 2014 and above 860p last year, yesterday edged down 0.7pc, or 3.6p, to 541.4p after its half-year profits dropped almost a fifth to £202.5m. Bethel insisted its recovery strategy ‘is delivering’, but even a record order book and pipeline of £34bn could not keep its shares out of the red.
Kingfisher’s new boss Thierry Garnier, who has been in the job for two months, said the B&Q owner is in need of an overhaul, as he hit out at the strategy of previous chief executive Veronique Laury. It came as Kingfisher said group sales fell 3.1pc in the third quarter between August and October to just under £3bn. Its shares fell 7.1pc, or 14.8p, to 194p.
Global markets were again spooked by rising US-China tensions. Markets in Asia tumbled after US President Donald Trump threatened higher tariffs if China doesn’t strike a trade deal soon.
In the US, Wall Street exchanges lost ground as the Senate passed a bill supporting human rights in Hong Kong.
The S&P 500 fell 0.4pc to 3108.39, the Dow Jones fell 0.4pc to 27821.09, while the Nasdaq edged 0.5pc lower to 8526.73. In London the FTSE 100 was down 0.7pc, or 61.31 points, to 7262.49 and the
FTSE 250 fell 0.3pc, or 53.23 points, to 20,475.25.
The owner of Harvester pubs and All Bar One has boosted profits as customers turn to more expensive healthy options.
Mitchells and Butlers jumped 5.5pc, or 24.5p, to 470.5p after it reported that profits rose 36pc to £177m on revenues of £2.2bn – a 3.5pc increase at sites that had been open for more than a year. And mid-cap oil services group
Petrofac rose 1.3pc, or 5p, to 400.6p on a double whammy of news. It has bagged £93m of new contracts or contract extensions in Malaysia and the North Sea, and agreed to acquire a US shale specialist, W&W Energy Services, for an initial sum of £17m.
Small-capper Clipper Logistics, which handles online orders for companies such as Asda and Shop Direct, surged 20.3pc, or 54p, to 296.5p after it was revealed that founder and chairman Steve Parkin is plotting a £300m takeover.
Shares in SSP, the owner of train station cafe chain Upper Crust, slid 3.5pc, or 23p, to 632p despite announcing it will return £100m to investors through a stock buyback. Pre-tax profits jumped 8pc in the year to September 30, to £197m, while revenues jumped by 9pc to £2.8bn.
Luxury car maker Aston Martin climbed 2pc higher, or 8.9p, to 451.4p after it launched its £158,000 family SUV, the DBX, upon which it has pinned its hopes of a financial revival.
But Rolls-Royce slid after Moody’s downgraded its credit rating a notch, because of customer disruption caused by faulty engines. It closed down 1.3pc, or 9.2p, to 720p.