MARKET REPORT: Wood Group takeover threat over share price

Trading floors in the City were abuzz after John Wood Group came under attack from an activist investor demanding the firm boost its share price – or risk being taken over.

The oilfield services and engineering firm has been struggling this year, with shares down 33 per cent.

But they rose 2.8 per cent, or 3.55p, to 128.6p after Sparta Capital warned it must buy back some of its stock to avoid becoming a takeover target. 

Oilfield services and engineering firm Wood Group has been struggling this year, with shares down 33 per cent.

Oilfield services and engineering firm Wood Group has been struggling this year, with shares down 33 per cent.

Sparta, led by the former Elliot Management activist fund manager Franck Tuil, wrote to John Wood saying that the group has enough cash to repurchase shares and so should do so.

The Footsie has been ravaged by takeovers over the past couple of years, fuelled by the weak pound and private equity sharks awash with dry powder to spend.

Fears are that John Wood, which employs around 35,000 people in 60 countries, could be next for the hungry buyout industry.

The FTSE 100 fell 0.2 per cent, or 17.02 points, to 7472.17 and the FTSE 250 was down 0.6 per cent, or 106.56 points, to 18,824.901.

Purplebricks suffered a blow after an activist investor stepped up its call to oust the estate agent’s chairman. 

Lecram, a top-ten shareholder, said ‘nothing is improving’. It pointed towards Purplebricks’ losses and said it is burning £2million of cash a month.

The investor is calling for chairman Paul Pindar to be replaced with Harry Hill, who founded Countrywide and Rightmove.

Stock Watch – Vertu Motors

Vertu Motors is to buy a family-owned business that has run for more than six decades, in a deal worth £182million.

The car dealer will acquire 28 dealerships in a takeover of motor group Helston.

Vertu boss Robert Forrester said it was a ‘very proud moment’ for his firm, which will add Volvo and Ferrari to its portfolio. 

As Helston is based in south-west England, the number of dealerships Vertu will own in the area will rise from four to 32.

It surged 13.4 per cent, or 6.5p, to 54.9p.

Matters were not helped by Purplebricks posting a 16 per cent fall in revenue to £34.5million for the six months to October. Shares fell 7.2 per cent, or 0.72p, to 9.26p.

Back in the top index, Fresnillo was among the biggest risers after Morgan Stanley raised the miner’s target price to 800p from 730p. It rose 2.2 per cent, or 19.2p, to 885.4p.

British American Tobacco insisted it was on course to meet its revenue targets for the year despite an industry slowdown. 

The group expects its revenue to grow between 2 per cent and 4 per cent, and said the industry was still in decline due to the post-pandemic recovery in emerging markets. It fell 3.1 per cent, or 105.5p, to 3305p

The London Stock Exchange Group sank 6.4 per cent, or 508p, to 7380p after UBS downgraded its rating to ‘neutral’ from ‘buy’ and cut the target price to 8500p from 9000p. 

But business looked good for Balfour Beatty after the infrastructure firm said, in its latest trading update, that revenue for the year should be around 5pc more than the previous 12 months, which raked in £8.3billion.

Profit is predicted to be ahead of market expectations. Shares climbed 1.6 per cent, or 5.4p, to 337p.

City broker Numis swung into reverse after a slowdown in deals and worsening market conditions. Revenue was down 33 per cent to £144.2million for the year to September and profit by 72 per cent to £20.9million.

It slashed bonuses, saying staff costs fell 24.3 per cent to £74.9million. Shares dipped 1.5pc, or 2.8p, to 180.8p.

Meanwhile professional services firm K3 Capital soared 8.3 per cent, or 25p, to 325p after confirming a takeover offer. 

Private equity company Sun Capital tabled a bid of 350p a share, which K3 said was a 16.7 per cent premium to its closing price on Wednesday.

In the travel sector, the founder of On The Beach will step down as chief executive after 18 years at the helm.

Simon Cooper, who set up the package holiday group in 2004, will leave his role in 12 months before moving to the new position of founder director. Shares fell 4.8 per cent, or 6p, to 119p.

Finance boss Shaun Morton will be the new chief executive. Revenue for the 12 months to September rose to £144.1million compared with £21.2million a year earlier.

It made a profit of £2.1million, after a £36.7million loss in 2021.

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source: dailymail.co.uk