FTSE 100 movers: DS Smith surges on takeover news; Spirax hit by downgrade
By Michele Maatouk
Date: Friday 08 Mar 2024
(Sharecast News) - London's FTSE 100 was down 0.4% at 7,658.98 in afternoon trade on Friday.
Packaging firm DS Smith surged to the top of the index after larger rival Mondi agreed to buy it for £5.1bn.
In a joint statement after the close on Thursday , the companies said that the agreement in principle has an implied value of 373p per DS Smith share, which is a premium of 33% to the closing share price on Thursday.
Under the terms of the deal, Mondi shareholders would own 54% of the combined entity, while DS Smith shareholders would own the rest.
Peer Smurfit Kappa also gained but Mondi fell.
Spirax-Sarco was under the cosh as Stifel downgraded the shares to 'sell' from 'hold' after the company's results.
Stifel said the full-year numbers were in line with much-lowered guidance and its outlook was broadly reassuring, if heavily second-half weighted and not without risk.
"But valuations, which have long looked full, seem to us to have drifted back into unrealistically elevated territory," it said.
"We cannot justify paying 33x forward price-to-earnings and more than 5x EV/sales for a relatively mature capital goods company, with low single digit earnings growth this year."
FTSE 100 - Risers
Smith (DS) (SMDS) 343.10p 5.50%
Convatec Group (CTEC) 285.80p 3.70%
Legal & General Group (LGEN) 250.00p 2.12%
Weir Group (WEIR) 1,937.00p 1.52%
Reckitt Benckiser Group (RKT) 5,152.00p 1.34%
Smurfit Kappa Group (CDI) (SKG) 3,338.00p 1.27%
Glencore (GLEN) 404.10p 1.25%
SEGRO (SGRO) 891.40p 1.25%
NATWEST GROUP (NWG) 253.40p 1.20%
Vodafone Group (VOD) 70.40p 0.89%
FTSE 100 - Fallers
Melrose Industries (MRO) 593.00p -3.95%
Entain (ENT) 764.80p -3.19%
Rentokil Initial (RTO) 488.80p -3.05%
Spirax-Sarco Engineering (SPX) 10,405.00p -2.39%
St James's Place (STJ) 469.40p -2.39%
Mondi (MNDI) 1,347.00p -2.39%
Pearson (PSON) 990.00p -2.17%
Ashtead Group (AHT) 5,016.00p -2.15%
GSK (GSK) 1,676.20p -2.05%
Ocado Group (OCDO) 451.20p -1.55%
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