UK share prices watch: Merlin shares skyrocket
Legoland owner Merlin Entertainments (LON:MERL) has been among today’s most notable UK share prices, with the stock skyrocketing as the company agreed a deal to be acquired by a newly-formed company made up of Kirkbi, the investment vehicle of Lego’s founding family, private equity firm Blackstone Group and Canadian pension fund CPPIB. Broader market sentiment meanwhile remains subdued, in line with the rest of the week, with investor focus staying on the G20 summit which will feature a meeting between US President Donald Trump and his Chinese counterpart Xi Jinping.
Merlin skyrockets on £4.8bn offer
Shares in Merlin are rallying this Friday after the mid-cap company agreed to be bought newly-formed company Berkeley Bidco, with the deal valuing the Legoland owner at 455p per share, or about £4.77 billion. Reuters notes in its coverage of the news that Kirkbi, the private investment company of Lego’s Kirk Kristiansen family, will own 50 percent of the FTSE 250 group, while Blackstone and Canadian pension fund CPPIB will hold the rest.
The deal comes after activist investor ValueAct recently urged the London-listed group in an open letter to go private. Reuters, however, quoted a source with knowledge of the matter as saying that he initial, unsolicited offer from the consortium had valued the firm at 425p and talks about a takeover had predated the ValueAct letter. Merlin’s share price is up by just under 14 percent in early afternoon trade, lending support to the mid-cap FTSE 250 index which stands about 0.7 percent higher.
Woodford Patient Capital Trust’s (LON:WPCT) share price has been volatile today as the company updated investors on its strategy, announcing plans for additional controls in place to preserve the value of its portfolio. The move comes as the company looks to assuage investor concerns in the wake of the suspension of its sister fund. Shares in the Woodford Patient Capital Trust are down by about 2.6 percent in afternoon trade, having traded in positive territory earlier in the session.
In FTSE 100 movers, Kingfisher (LON:KGF) is building on the previous session’s gains, with shares still in demand after the DIY retailer announced yesterday that it had appointed Carrefour executive Thierry Garnier to the top job. Kingfisher’s shares have added about one percent, compared with about a 0.2-percent gain in the FTSE 100 benchmark, extending yesterday’s four-percent gain.
London-listed housebuilders meanwhile are lending support to the FTSE 100 index as reports suggested that Tory leadership frontrunner Boris Johnson was planning to slash stamp duty in the event of a no-deal Brexit budget.
“Coming not long after we heard rumours that Jeremy Corbyn was considering applying capital gains tax on all residential sales, it is evident that the housebuilding sector would be materially affected by the outcome of the next general election,” Joshua Mahony, senior market analyst at IG, commented, as quoted by Sharecast, adding, however, that while the sector gained ground “in anticipation of a potentially stimulative cut in stamp duty, we must remember that the no-deal Brexit remains something that parliament has no majority to approve”. Berkeley Group (LON:BKG) is currently leading FTSE 100 housebuilders higher, having gained about three percent, followed by Persimmon (LON:PSN) with a 2.4-percent gain, Taylor Wimpey (LON:TW) which is two percent better off, and Barratt Developments (LON:BDEV), whose shares are changing hands about 1.5 percent higher.
UK share prices to watch next week
The summer lull on the corporate front is likely to continue next week, with few London-listed companies set to update investors on their performance. J Sainsbury (LON:SBRY), however, is set to provide some excitement on Wednesday with its first-quarter results, to be followed by the grocer’s annual general meeting on Thursday. The results will come after the failure of the grocer’s merger with Walmart’s Asda.
“Investors will be looking for signs that sales growth is still present, especially on a like-for-like basis,” IG’s chief market analyst Chris Beauchamp commented in a preview of Sainsbury’s update, adding that “in the longer-term, retaining market share will require cost cutting and price cuts, and while the dividend is solidly covered at two times earnings, it would be unwise to increase it further given the uncertain outlook”.
Other UK share prices to watch next week include Purplebricks (LON:PURP) and Superdry (LON:SDRY) which are posting full-year results on Wednesday and Thursday, respectively.
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