The FTSE 100 is up by 0.98% to 7,100.99 during the morning session on Monday amid a new wave of takeover activity.
The FTSE 250 hit a new record high of 23,305 as its cohort of mid-cap stocks is seen to be better hunting ground for takeover targets than the large cap FTSE 100 index.
“Aerospace and defence components group Meggitt has become the latest target for an overseas buyer, and one pitched at a very generous 70.5% premium to last Friday’s closing market price,” says Russ Mould, investment director at AJ Bell.
The bid for Meggitt, together with well-received numbers from HSBC and rumours about a potential counterbid for Morrisons, helped to push up the FTSE 100.
“With a 6% gain, the top FTSE 100 riser was Melrose Industries on positive read-across from Meggitt given it also has interests in the aerospace and defence sector, having bought GKN in 2018. It would be interesting to see if this predator becomes prey, as Melrose has historically been the one doing the bidding,” Mould added.
Existing FTSE 250 bid target Sanne received an offer from private equity group Apex at 920p per share, having previously been subject to 830p, 850p and 875p per share offers from Cinven.
“We’ve seen quite a few private equity suitors having to raise their offers this year as companies and shareholders push back on initial approaches, saying they are too low. Private equity firms have a reputation for trying to get a bargain, but their tactics have been fully exposed this year and it now seems rare for the first offer to be the winning one.”
FTSE 100 Top Movers
Melrose Industries (6%), IAG (4.22%) and JD Sports (3.87%) are ahead of the rest a couple of hours into trading in August.
Trailing the UK’s top 100 companies at the back is Fresnillo (-1.91%), Pearson (-1.23%) and Smith and Nephew (-0.89%).