The FTSE 100 index has risen 17.76 points to 8292.51, led by car insurer Admiral on the read-across from last night’s Direct Line takeover disclosures.
Admiral rose by 3% or 81p to 2545p, while other strong performers included supermarkets Tesco and Sainsbury’s after gains of 8p to 365.9p and 7.4p to 260.8p respectively.
Thermal engineering firm Spirax rallied 3% or 245p to 7145p and JD Sports Fashion improved by 2.5p to 104.15p.
The FTSE 250 index added 0.6% or 122.27 points to 20,723.90, with Dr Martens up 14% or 8.2p to 66p as investors reacted to a reassuring set of half-year results.
08:28 , Graeme Evans
Direct Line Insurance shares are up 36% or 57.5p to 216.2p, which compares with the 250p valuation tabled by Aviva in its unsuccessful takeover approach.
FTSE 100-listed Aviva fell 8.8p to 480.5p, still sharply higher than the 453p at the start of November.
Aviva’s £3.3 billion cash and shares proposal, which was rejected yesterday by the Direct Line board, comes after Belgium’s Ageas failed to acquire the business earlier this year.
Deutsche Bank said today: “We value Direct Line at 220p a share, and even without a takeover bid, like the shares on a 12 month view.
“Meanwhile, we see this as adding confidence to the UK personal lines space, and can see bottom-line synergies for Aviva, even if this could put pressure on its 2025 buyback.”
Peel Hunt added: “Aviva could be persuaded to sweeten the deal to 260p-265p, which may help satisfy the DLG board.
“There is downside risk to DLG’s standalone strategy and retaining some upside in an Aviva-DLG combination could be an attractive proposition, which is worth exploring in our view.”
08:08 , Graeme Evans
Rare books firm Scholium has revealed plans to quit the London stock market.
The company, which has a market value of £5 million and joined AIM in March 2014, estimates that the cancellation could reduce its overheads by at least £75,000 a year.
This figure relates to professional adviser fees, stock exchange related expenses and other costs associated with the running of a quoted company.
It points out this reduction would have increased pre-tax profits in the 2023/24 financial year by at least 25%.
The company said the cost savings will enable “greater investment in the business and an opportunity to pay dividends to shareholders.”
Over the last 30 months the mid-price of each Scholium share has not exceeded 45p, representing a large discount to net asset value that has “significantly hampered the ability of the group to grow by acquisition”
Subject to shareholder approval, the cancellation of the listing will take place on 6 January.
The announcement came as Scholium recorded its seventh consecutive profitable half year, a period that included the transition to the company’s new single flagship property in Bond Street for both books and art.
07:50 , Graeme Evans
The Loungers bar and restaurant chain has been snapped up by a New York investment firm Fortress, which already owns the Punch pub company and Majestic Wine.
The deal came as Loungers, which has around 270 locations under the Lounge, Cosy Club and Brightside brands, revealed half year sales up 19% at £178.3 million and pre-tax profits more than 50% higher at £5.9 million.
The offer price of 310p a share in cash is a 30.3% premium to last night’s closing price of 238p and worth a total of £338.3 million. The share price has never been higher than the offer price.
The Loungers board said a ack of liquidity in its shares had been one of the factors in the decision to sell as this made it “challenging to attract new investors or for larger Loungers shareholders to monetise their holdings.”
The statement said: “The Loungers directors believe that this illiquidity is a structural issue inherent to many UK small-cap stocks.”
The company adds that Loungers’ strong growth has not been reflected in its market valuation. The company opened its first site in Bristol in 2002.
The disclosure by Aviva that it has made a 250p-a-share takeover proposal to Direct Line Insurance represents a 57.5% premium to last night’s closing price.
The board of the Churchill and Green Flag business described the cash and shares proposal as “highly opportunistic” and one that substantially undervalued the company.
Under takeover rules, Aviva has until 25 December to make a firm offer. Direct Line shares last traded at 250p in July 2022, having fallen as low 135p last year.
Panmure Liberum said this morning: “We believe that an offer at around 250p per share or slightly above is good for Direct Line shareholders.”
07:17 , Graeme Evans
Bootmaker Dr Martens has reported half-year results in line with expectations, including an 18% decline in revenues to £324.6 million.
The reduced top line figure and exceptional charges of £9.2 million, largely due to its cost savings plan, led to a loss of £17.9 million.
Kenny Wilson, who is stepping down as chief executive, said: “This is a year of transition and we have made good progress with our four main objectives.”
The company described trading over recent weeks as encouraging, with all three regions positive ahead of the peak season.
It added: “Encouragingly, trading has been driven by good direct-to-consumer sales of new products supported by our new product-led marketing approach.”
07:03 , Graeme Evans
Inflation jitters halted the strong run for US markets last night, with the Dow Jones Industrial Average down 0.3% after earlier touching 45,000 for the first time.
The S&P index also retreated from record territory with a decline of 0.4%, while the Nasdaq Composite lost 0.6%.
The selling amid thin volumes ahead of the Thanksgiving holiday followed a strengthening in the Federal Reserve’s preferred measure of inflation.
The FTSE 100 index rose 0.2% yesterday and is forecast to open eight points higher at 8283 this morning.
Aviva shares will be closely watched after the insurer last night announced an unsuccessful takeover approach to Direct Line worth £3.3 billion.
