MARKET REPORT: London Stock Exchange in black as FTSE suffers but it could earn up to £3.7bn from sale of Borsa Italiana
The London Stock Exchange’s £21billion takeover of data powerhouse Refinitiv inched closer after the bourse kicked off exclusive talks to sell its Italian arm.
In a bid to placate European regulators, the LSE is lining up a sale of the Milan stock exchange Borsa Italiana which it bought back in 2007 for £1.5billion.
It is not clear exactly how much the Italian arm is worth now, though analysts put the number at between £3.2billion and £3.7billion.
In a bid to placate European regulators ahead of its proposed takeover of Refinitiv, the LSE is lining up a sale of the Milan stock exchange Borsa Italiana which it bought in 2007 for £1.5bn
After weeks of speculation, the LSE has decided to hammer out the terms on a joint bid from Euronext, Italian bank Intesa Sanpaolo and state-owned investor Cassa Depositi e Prestiti.
Switzerland’s SIX and Germany’s Deutsche Boerse – which previously had a £21billion tie-up with the LSEG dashed in 2017 – had also been in the line-up.
The deal is contingent on the outcome of a review being conducted by the European Commission, which is due by December.
Euronext was expected to be the forerunner and already owns a buffet of bourses, including the main exchanges in Dublin, Oslo, Paris, Amsterdam and Brussels.
Investors, pleased with the progress on the Refinitiv mega-deal, sent shares higher by 1.3 per cent, or 118p, to 8960p by the close.
Stock Watch – Trackwise Designs
Trackwise Designs’ shares spiked after it secured a three-year deal that could be worth up to £38million with a UK-based electric car maker.
AIM-listed Trackwise will supply its patented circuit boards to the unnamed vehicle maker, which will use the flexible and lightweight kit in the car’s electric batteries.
Boss Philip Johnston said the contract was a ‘very significant commercial milestone’ for the company. Shares in Gloucestershire-based Trackwise rose 45 per cent, or 52p, to 167.5p.
While the LSE closed in the black, the same could not be said about the wider market.
The FTSE 100 closed 0.7pc lower, down 42.87 points, to 6007.05 as traders feared the worst about the prospect of more UK lockdowns, while the mid-cap FTSE 250 fell 1 per cent, or 168.04 points, to 17569.68.
Infrastructure investor John Laing was a hit with analysts after agreeing to sell its 30 per cent interest in the Intercity Express Programme Phase Two, a project to build trains and depots for the East Coast Mainline, to Cophenhagen-based AIP for £421million.
This was a bumper price for the stake – which was valued at £333million at the end of June.
Peel Hunt described it as an ‘excellent price’, and said that it will permit the firm to pay a healthy dividend. Shareholders were similarly pleased with its stock rising 6.8 per cent, or 19.4p, to 304.2p by the close.
Asset manager Man Group, the former sponsor of the Booker Prize, also made a good impression on the market.
Its shares rallied 4.1 per cent, or 4.7p, to 120.25p after it fired the starting gun on a share buyback worth as much as £77million. The FTSE 250-listed group intends to buy 66m shares between now and next September.
Security group G4S advanced 1.4 per cent, or 2.7p, to 193.6p after its biggest investor, Schroders, slapped down a £3billion hostile takeover bid from Canada’s Garda World. Schroders said the 190p-per-share offer undervalues the group and means its three biggest investors – including Harris Associates and Sachem Head Capital – have all hit back at the bid.
Sainsbury’s shares climbed for a second day – rising 2 per cent, or 3.85p, to 195p – after it was revealed the ‘Czech Sphinx’ billionaire investor Daniel Kretinsky had bought a 3.1 per cent stake in the Big Four supermarket group.
He has set tongues wagging in the City even if it is not clear what he is planning to do – if indeed he intends to do anything – with his £134million holding.
But yesterday’s standout performer was an AIM-listed science stock. Biotech boffins at Belfast-based Fusion Antibodies have made an antigen – the key element of a virus that tests search for – which mimics coronavirus.
This means the antigen could be used by scientists to develop Covid treatments, triggering antibodies that kill the virus, without having to handle the live virus. Shares rocketed 97.3 per cent, or 90p, to 182.5p – almost doubling its market value to £46.4million.