The FTSE 100 drifted lower on Wednesday with no fresh catalysts warranting major positioning as traders eyed the Easter weekend.
The FTSE 100 was down just 7 points at the time of writing after recovering from the worst levels of the session.
London’s leading perked up as the US session got underway and investors stepped in to pick up stocks weakened by a soft overnight session.
However, while the index painted a picture of tepid trade, there were a number of significant movers including Diploma, DS Smtih and Flutter.
Diploma was the top gainer, jumping 10%, after announcing the acquisition of Peerless Aerospace Fastener a of specialty fasteners into the US and European aerospace markets. The deal is worth £236m and compliments Diploma’s existing aerospace strategy at an attractive valuation.
Flutter Entertainment lost another 5% after mixed results were released yesterday.
There was an interesting twist in the potential Mondi/DS Smith tie-up on Wednesday with new interest coming in from overseas, igniting a potential bidding war in the packaging company.
DS Smith is the latest UK company attracting interest from other seas firms, this time from a competitor, International Paper. International Paper has offered 415p for the company—far higher than the proposed 373p in the Mondi deal.
“Countless stocks have traded on relatively low valuations for years as the UK market has been unloved by foreign investors. There have been plenty of chances for companies to take advantage of this valuation opportunity by launching takeover bids, but increasingly we’re seeing interested parties only throw their hat in the ring when someone else makes the first move,” said AJ Bell investment director Russ Mould.
“DS Smith is the latest in a growing line of companies to find itself at the centre of a bidding war. Having already been courted by Mondi, it has now received an expression of interest from International Paper. The latter proposal is structured as an all-share offer which means UK investors will have to be comfortable owning US-listed stock to support the deal.”
Sainsbury’s shares were 3% higher after UBS upgraded the stock to a buy.
