FTSE 250 movers: Currys slides as Elliott pulls bid; Darktrace surges on Numis note
By Frank Prenesti
Date: Monday 11 Mar 2024
(Sharecast News) - FTSE 250 (MCX) 19,527.74 -0.38%
Iron ore producer Ferrexpo slid after saying it needs to extend the payment terms on a $58,000 bill from a supplier for its Ukrainian operations as the business's accounts continue to be frozen.
Ferrexpo confirmed press speculation that Kysen, a supplier to Ferrexpo Poltava Mining, has sought creditor protection proceedings against the company, with court hearings starting this week.
"Having become aware of proceedings the board of Ferrexpo has taken steps to settle the debt," Ferrexpo said in a statement on Monday.
However, it added: "Given restrictions with the operation of FPM's bank accounts in Ukraine, and the nature of the payment that is being made to settle the debt, FPM is not able to provide assurance now that funds will be received in a timely manner and for that reason FPM is, in parallel, also seeking to agree an extension of payment terms."
Ferrexpo is currently facing several court cases or investigations by Ukrainian authorities trying to recover assets from founder and 49.5% shareholder Kostyantin Zhevago. One of these investigations relate to the potential underpayment of iron ore royalty payments during the years 2018 to 2021 - a claim that Ferrexpo denies.
Ferrexpo announced last month it was cancelling its interim dividend just days before it was due to be paid out, following the ongoing legal battles.
The company said it is working closely with its legal counsel and other advisers "to consider and address the situation" and will make further announcements as appropriate. "Ferrexpo's operations remain unaffected at this time," the company confirmed.
Shares in Currys slumped on Monday as US private equity firm Elliott Advisors pulled from the race to take over the UK electrical retailer after "multiple attempts" to discuss an offer were rebuffed.
Currys shares surged last month when it was revealed that Elliott had made an initial potential offer worth £700m, or 62p a share - later reportedly upped to £800m. Meanwhile Chinese e-commerce giant JD.com also entered the fray and has until March 18 to make a firm offer or walk away under UK takeover rules.
The retailer has been struggling in the last two years as high inflation hit demand across all of its markets. Last July Currys cancelled its dividend and cut spending in its Scandinavian operations.
"Following multiple attempts to engage with Currys' board, all of which were rejected, it is not in an informed position to make an improved offer for Currys on the basis of the public information available to it," Elliott said on Monday.
"Elliott therefore confirms it does not intend to make an offer for Currys."
Currys, which employs more than 15,000 people in the UK and has about 300 stores became a group name after Currys, PC World and Carphone Warehouse merged in 2014.
Under UK takeover rules Elliott cannot make a revised offer for Currys for at least six months.
AJ Bell investment director Russ Mould said Elliott's decision "doesn't mean the target is no longer in play" with the JD.com approach still live and the electricals retailer could be on the radar of others.
"There is logic in wanting to own Currys. It is the last major UK-wide seller of electricals still with a physical store presence. There are still plenty of people who like to go into a shop to get advice or technical assistance, compare products in person, and be able to collect items without having to risk a courier losing or damaging their goods during transit," he said.
"Elliott says Currys' management refused to engage which at that point would normally see a bidder go hostile in their attempt to succeed with a takeover. Instead, it has just walked away which suggests that its original approach was highly opportunistic in the hope Currys could be bought on the cheap.
"Investors like Elliott typically want to pay as low a price as possible with the intention of potentially breaking up the group or driving big changes to realise hidden value in the business.
"Some of Currys' biggest shareholders have already gone public and said Elliott's 62p per share offer significantly undervalues the group. It's no wonder that Currys' management didn't even want to give Elliott time for a coffee let alone open the books to let the suitor undertake due diligence."
Shares in cybersecurity group Darktrace jumped after Deutsche Numis reiterated the stock as a 'buy' and kept its 520p target price. The company last week reported a jump in first-half revenues and upgraded full year forecasts.
Market Movers
FTSE 250 - Risers
Darktrace (DARK) 417.50p 10.63%
TP Icap Group (TCAP) 197.20p 4.78%
FirstGroup (FGP) 163.00p 2.71%
Fidelity China Special Situations (FCSS) 194.40p 2.42%
Drax Group (DRX) 497.40p 2.11%
Wizz Air Holdings (WIZZ) 2,365.00p 2.07%
Aston Martin Lagonda Global Holdings (AML) 159.30p 1.92%
Dr. Martens (DOCS) 91.70p 1.44%
Senior (SNR) 170.20p 1.43%
Oxford Instruments (OXIG) 2,210.00p 1.38%
FTSE 250 - Fallers
Ferrexpo (FXPO) 61.85p -11.89%
Currys (CURY) 59.75p -7.36%
Harbour Energy (HBR) 249.30p -4.12%
Tullow Oil (TLW) 27.10p -4.04%
Future (FUTR) 589.00p -3.68%
Breedon Group (BREE) 382.00p -3.41%
Close Brothers Group (CBG) 371.20p -3.08%
Allianz Technology Trust (ATT) 347.00p -3.07%
Jupiter Fund Management (JUP) 87.80p -2.88%
Wood Group (John) (WG.) 144.40p -2.56%
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