Just how low will building company Low & Bonar go?

JUST a few weeks ago investors were speculating on the next big takeover deal.

There was chatter about an American suitor interested in buying Vodafone, a private equity firm eyeing up Tullow Oil and M&C Saatchi receiving an informal approach from media entrepreneur Marc Boyan.

Now, however, traders are focusing on which bids are going to collapse as share prices crater.

Many are intrigued by small cap building materials company Low & Bonar, which has recommended a 15.5p a share, £107 million takeover offer from German group Freudenberg.

The deal is in the process of being scrutinised by European c o mpetiti o n regulators but in the meantime Low & Bonar has warned that if the deal does not go through, it will be in serious trouble with its bankers.

Low & Bonar had already warned earlier this year of ‘challenging’ conditions as the impact of coronavirus started to hit its Chinese operations.

Its shares, which have fallen as low as 4.2p, finished on Friday at 6.5p.

After markets closed, the company issued final results, saying it could not give meaningful guidance to the financial outcome for 2020, which does not bode well at all.

THERE aren’t too many ‘buy’ tips circulating the City in t hese t roubled times.

But scribblers at Jefferies have given the thumbsup to shares in Sir Martin Sorrell’s new digital advertising venture, S4 Capital.

Analysts Becky Lane and James Wheatcroft reckon S4 Capital could see its shares rise from £ 1.45 today to more than £2 as earnings triple over the next four years.

That’s because Sorrell’s firm – according to Lane and Wheatcroft – ‘is ideally positioned to benefit from an accelerating pace of digital transformation’.

A brave call, some might argue.

EMERGENCY cash calls are coming thick and fast as listed firms navigate this crisis.

One of the first out of the blocks was airport and railway station caterer SSP, which last week raised a very respectable £ 216 million at 250p a share.

City Pub Group – whose boss is Clive Watson, father of Made In Chelsea star Lucy Watson – was not far behind. Its bosses were relieved it was able to raise £22 million.

Now insiders who follow the world of new share issues are speculating that some of the airlines, cruise ship operators and gambling companies worst hit by the coronavirus lockdown will soon be tapping up shareholders for cash to see them through the tough times likely to lie ahead.

Watch this space.