LONDON (ShareCast) - (Sharecast News) - Outsourcer Mitie was under the cosh on Tuesday after its right issue shares were admitted following the company's acquisition of Interserve's facilities management arm last month.
At 1030 BST, the shares were down 45% at 46.70p.

Mitie announced on 25 June that it had launched a £201m rights issue to help fund the £217m cash and shares acquisition.

Broker Liberum said the rights issue will dilute earnings per share by 62% in FY22 but will also "significantly reduce" the debt burden, whilst the Interserve FM acquisition will be 27% accretive to FY22 and create a market leader in technical, security and cleaning services.

"Mitie's exposure to the public sector will also increase, leading to a more balanced business," it said. "The acquisition of Interserve is a strategically sensible deal. Sometimes the girl next door is the right one to marry. The deal shifts the mix in favour of the public sector."

Nevertheless, Liberum said the valuation is still not attractive given the double dilution.

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