One bank announced that the company was a possible takeover target on the same day Auction Technology Group reported a successful start to the new year.
Analysts at Berenberg said that Auction Technology is a tool that helps traditional auctioneers go digital worldwide, whether it’s destroying industrial machinery or art. “It lends itself well to private equity,” they suggested.
Berenberg notes that TA Associates is the largest shareholder of the FTSE250 group and that other investment firms have expressed interest in the company. Berenberg believes the business can make more acquisitions under private ownership to increase its market share.
Auction Technology, a German bank, presented its investment case while saying that it had begun the year in line with expectations. Revenues were up by 11 percent to $43.9 millions for the three-month period ending December. Positive results for sure, but market talk is likely to have pushed its shares up by 90 1/2p or 19.8% to 547p.
Berenberg also identified two mid-cap companies as top targets for takeovers. They were Moneysupermarket.com, the price comparison site floated in 2007 whose own shares now look like a deal after a period of weakness, and Trainline, the online ticketing company that analysts believe “exhibits all of the hallmarks that private equity likes”. Trainline’s share price rose by 9 1/2p or 2.9 percent to 336 1/4p. Moneysupermarket shares closed at 253 1/4p down 4 1/2p or 1.8 percent.
The London market was boosted by the Wall Street record-breaking session. The FTSE 100 ended up 33.57, or 0.4 percent, at a new three-week high, 7,666.31, and the FTSE 250 climbed 38.34, or 0.2 percent, to 19,349.50.
The dollar-earners benefitted from a weaker pound. InterContinental Hotels Group gained 124p or 1.7% to £75.80, while Rentokil initial, a pest control company, added 6p or 1.5% to 414p. Bill Ackman’s Pershing square, the hedge fund manager ended the day up by 82p or 2.2% at £38.04. 3i the investment group topped the Footsie climbers’ board with a 64p or 2.6 percent increase to £24.97.
Investors in the next tier piled into Kainos after advice from another group of analysts at Berenberg. They argued that Northern Ireland’s most successful tech company “has shown unusually high revenue growth and consistently large cash returns on capital”. The shares ended 49p or 4.5 percent higher at £11.40.
UPS’s gloomy update sent paper and packaging firms packing. UPS, a US delivery company that is considered to be a barometer of economic activity, announced it would reduce 12,000 jobs because its revenue forecasts for 2024 fell short of Wall Street estimates. Mondi shares fell 47 1/2p or 3.2 percent to £14.241/2, while DS Smith’s stock dropped 5 1/2p or 1.9 percent to 284 3/4p, and Smurfit Kappa shed 46p or 1.5 cents to £30.08.
Analysts at Bank of America downgraded some of the biggest housebuilders. Barratt Developments was one of them, with a 6p or 1.1% drop to 533 1/4p.
Apart from the main market the shares of Diaceutics jumped 11 1/2p or 12.4% to 104 1/2p. This was their highest level in the last four months, after the technology supplier to the pharmaceuticals sector reported strong half-year results. was less spectacular, but no less impressive. The shares of the company that tests for infectious and respiratory diseases products rose by 2 1/4p or 8.4 percent to 28 1/2p. This was after it announced regular dividends due to its strong performance in 2018. It also revealed that it aims to reach £100 million revenue by 2028.
Matt Moulding (founder of THG) has also increased his stake in Kelso. This activist investor is pushing for the breakup of Moulding’s ecommerce company. According to a filing with the stock exchange, the entrepreneur increased his stake in Kelso to a little over 7 percent. Kelso shares fell 1.6 percent to close below 3 1/4p.
A Berlin-based group that delivers food is selling all of its shares in Deliveroo. This has pushed the British company’s share price to a 3-month low.
Delivery Hero sold 68,2 million “class-A” ordinary Deliveroo shares, which is 4.5 percent of the company, at 113p per share. Delivery Hero said that the sale demonstrated its “commitment” to “disciplined capital allocation”, with funds being used for “general corporate purpose”.
The group acquired its first stake in Deliveroo in 2021. At that time, the pandemic was driving a huge demand for food delivery services and takeaways.
The sale is made ahead of the April expiration of the golden shares that Will Shu, Deliveroo’s founder and CEO, holds. These shares give Shu additional voting rights and the power to stop hostile takeovers.
Bradley Hughes, an investor at Shore Capital, stated that Delivery Hero was “one of the more plausible possible acquirers” of Deliveroo, and that this sale “takes out a key horse from the race”. The analyst said that DoorDash could take advantage of the opportunity and move in.
Deliveroo shares fell by 3 3/4p or 3.1 percent to 118p. This is a far cry from the 390p they were originally listed at in 2021’s disastrous float.