FTSE 250 has no shortage of action following William Hill takeover.
On the day William Hill (LSE:WMH) shares became a non-runner, there was no shortage of action elsewhere in the FTSE 250 index involving SSP (LSE:SSPG), Aggreko (LSE:AGK), Morgan Sindall (LSE:MGNS) and Domino's Pizza (LSE:DOM).
Having been valued at £735 million after a 10 times oversubscribed flotation in 2002, the bookmaker's race is now run after shares were suspended today ahead of its £2.9 billion takeover by Las Vegas-based Caesars Entertainment (NASDAQ:CZR).
The driving force for the deal is the company's flourishing US bookmaking operations, with the European retail side now set to attract UK-listed operators including 888 Holdings (LSE:888).
Aggreko had been on course to follow William Hill off the stock market, but its £2.3 billion takeover by a consortium including TDR Capital now appears to be on shaky ground amid doubts whether the temporary power firm's biggest shareholder will back the deal.
Shares fell 22p to 848.5p, well below the 880p a share proposed acquisition price, after Sky News reported that Liontrust Asset Management intended to oppose the move.
Glasgow-based Aggreko, which listed on the London Stock Exchange in 1997 when it was spun off from Christian Salvesen, provides generators and other equipment for major events including the Super Bowl and the Olympics.
Upper Crust food retailer SSP is sitting a lot more comfortably today after raising £475 million from shareholders in its second cash call since the pandemic struck.
The completion of a heavily discounted rights issue at a price of 184p was met with a 5% jump in its share price to 326.2p, which compares with last month's theoretical ex-rights price of 293.3p when factoring in the impact of the newly-issued shares.
The funds should give SSP more protection in case the recovery in the travel sector takes longer than expected, as well as increase investment firepower should passengers return to airports and railway stations as expected later this summer.
SSP currently thinks it may take until 2024 for passenger numbers and like-for-like revenues to return to the levels seen before the pandemic. The company, which listed on the stock market in 2014, also raised £216 million by placing new shares at 250p in March last year.
SSP was second on the FTSE 250 index risers board, behind Morgan Sindall after the construction, fit-out and urban regeneration business said trading so far in 2021 had been ahead of expectations.
Its shares jumped 11%, or 202p, to a new record high of 2,076p as chief executive John Morgan also reported a secured order book worth £8.1 billion, up 8% on a year earlier as confidence continues to improve in construction and infrastructure markets. Office refurbishment in readiness for the return of workers is also likely to have benefited the fit-out division.
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Having described the sector as one still disliked by investors, broker Liberum raised its earnings per share forecast by 14% for this year and 5% for 2022 following the unscheduled update.
Domino's Pizza reported 18.7% growth in system sales in the first quarter of its financial year, driven by exceptional trading over the new year period as lockdown restrictions have proved favourable for the fast-food takeaway sector.
However, Liberum notes that the Domino's sale growth continues to be driven by pricing and the boost from a temporary reduction in VAT rates from 20% to 5%. The delivery order count was up 6.8%, but this is in stark contrast to 96% growth at Just Eat and 121% for Deliveroo. The collections side of the business is still only at 65% of 2019 levels.
Liberum has a ‘sell’ recommendation and 250p price target after also questioning the likely success of the company's new strategic plan without buy-in from franchisees, 70 of whom operate over 1,200 stores.
Domino's has made an “attractive offer” to the franchisees concerning their role in the company's growth plans, although no agreement has yet been disclosed. Shares were today 4.4p cheaper at 362.6p, having risen from 301.6p in early March.
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