Shares round-up: AVEVA, AstraZeneca, Cineworld

Multi-billion pound takeover deal by tech firm sets investors’ hearts racing amid acquisition drought.

A $5 billion (£3.81 billion) takeover by blue-chip company AVEVA (LSE:AVV) today went a little way to placating investors unhappy at a lack of tech-driven excitement in the FTSE 100 index.

The proposed deal by AVEVA to acquire US-based OSIsoft strengthens the company's position as a key player in engineering software and the industrial internet of things. It also reinforced its own reputation as a rising star on the London market.

Shares lifted 4.5% to 4,527p, even though some of the deal is being financed by new debt facilities and a proposed rights issue. Fast-growing AVEVA joined the FTSE 100 index last summer, having seen its shares jump from 1,862p seen in the early part of 2018.

Even if AVEVA lacks the consumer appeal of Wall Street titans such as Apple or Amazon, its rise has helped address complaints about a shortage of tech opportunities in London's top flight. 

The only others are accounting software firm Sage, cyber security specialist Avast, the consumer platforms Auto Trader (LSE:AUTO) and Rightmove (LSE:RMV), and Tesla (NASDAQ:TSLA) investor Scottish Mortgage (LSE:SMT).

Cambridge-based AVEVA has not looked back since the transformative tie-up in 2018 with part of France's Schneider Electric increased the company's presence in the key North American market and reduced dependency on the cyclical oil and gas sector.

California's OSIsoft employs 1,400 people, with its PI System for the analysis and sharing of real-time industrial sensor-based data in use by customers across 14,000 sites in 127 countries.

Should the deal complete, the combined company will generate revenues of about £1.2 billion and achieve adjusted underlying earnings of about £330 million at a 28% margin.

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AVEVA chief executive Craig Hayman said the deal strengthened the company's role in the digitisation of the industrial world, which is being driven by the need for sustainability as well as the big trends in data visualisation and artificial intelligence.

He added:

“The acquisition will enable AVEVA to broaden and deepen its relationships with existing and new customers and bring a more comprehensive product portfolio to market.”.

AVEVA posted the biggest rise in the FTSE 100 index, with the top flight higher for the second successive session amid growing hopes for a Covid-19 vaccine and signs that trade tensions between the US and China are easing. The return of risk appetite ensured the likes of Rolls-Royce (LSE:RR.) and InterContinental Hotels (LSE:IHG) rose by more than 2%.

AstraZeneca (LSE:AZN), which is London's biggest stock, also climbed 51p to 8,662p after it disclosed the start of a UK trial on a potential antibody-based treatment for the Covid-19 virus. It is aimed at people who may not be able to have a vaccination or for high-risk populations where additional protection from the virus may be needed.

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There was also a further rise for BT (LSE:BT.A) shares following last weekend's speculation that the telecoms giant is lining up a defence in case of an opportunistic takeover swoop. The company certainly looks vulnerable, given that shares started the week at just above 100p. They were at 110.75p following a further rise of 2% today.

In the FTSE 250 index, Cineworld (LSE:CINE) set the pace with a 5% rise after Peel Hunt's upbeat note yesterday highlighting the chain as a potentially attractive buying opportunity.

Marine engineer James Fisher moved in the opposite direction after cutting its half-year dividend by 29% to 8p a share and warning that its performance this year was likely to be weaker. Shares were 66p lower at 1,164p, despite the Cumbria-based company saying that it had weathered the initial storm of Covid-19 after a significant improvement in financial headroom.

One of the bright spots in the AIM junior market came from Next Fifteen Communications (LSE:NFC) after the PR and media relations firm reported strong trading at its B2B technology focused agencies Activate and Agent3. 

Overall revenues were up 6.5% in the half-year to July 31, leading the company to forecast that full-year results will be materially ahead of City expectations. Shares jumped 18% to 434p, which is the highest level since early March.

Full performance can be found on the company or index summary page on the interactive investor website. Simply click on the company's or index name highlighted in the article.