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FTSE 250 movers: HL surges on CVC offer; Telecom Plus disconnected

By Frank Prenesti

Date: Tuesday 18 Jun 2024

(Sharecast News) - FTSE 250 (MCX) 20,388.49 1.13%
Hargreaves Lansdown said on Tuesday that it would be willing to recommend a firm takeover approach at 1,140p a share from a consortium led by CVC Capital Partners and has therefore requested an extension to the 'put up or shup up' deadline.

Last month, HL said it had rejected a 985p per share takeover offer from the consortium, which comprises Nordic Capital and Platinum Ivy - a wholly-owned subsidiary of Abu Dhabi Investment Authority - as it "substantially" undervalued the group and its future prospects.

The Takeover Panel deadline for the consortium to either make a firm intention to make an offer or walk away was 19 June but this has now been pushed back to 19 July.

HL said 30p of the new 1,140p offer comprises a FY2024 dividend, with an option for the company's shareholders to elect for a rollover equity alternative in respect of some or all of their shares.

"The board remains confident in management's ability to execute Hargreaves Lansdown's strategic priorities and in Hargreaves Lansdown's fundamental longer term prospects," HL said.

"However, having evaluated the revised possible cash offer, which would provide the certainty of value in cash to shareholders, the board has decided to engage with the consortium and provide confirmatory due diligence access."

HL said it has told the consortium the latest proposal is at a value it would be willing to recommend to shareholders should a firm offer be made.

RBC Capital Markets has hiked its target price for Crest Nicholson from 175p to 250p, but kept an 'underperform' rating after the housebuilder rejected a second takeover offer from peer Bellway.

It was revealed last week that Bellway had made two approaches to acquire Crest over recent months, both a significant premiums to the share price yet both rejected by the latter's board.

The second proposal valued Crest at 253p per share, a 20.5% premium to Crest's three-month average but at just 0.79 times book value.

"Is an offer below book value credible? Normally no, but in this special situation yes," RBC said in a research note on Tuesday.

"At first glance, an offer below book looks opportunistic, but this view assumes that the book value is reliable and that one has faith in the company to turn the land profitably into houses. However, Crest has demonstrated several times in the last year that book value is not what it seems, and its ability to generate profits is far from certain."

Ahead of the so-called 'put up or shut up ' deadline on 11 July, RBC said Crest shareholders might do well to consider another potential offer from Bellway.

"We believe that a sale to Bellway offers a less risky and less bumpy path for investors and if Bellway comes back for a third time investors would do well to hear it out," the broker said.

Telecom Plus posted better-than-expected full-year pre-tax profit on Tuesday as customer and service numbers continued to grow.

In the year to the end of March 2024, adjusted pre-tax profit rose 21.5% to £116.9m, coming in above market expectations of £96.2m. The company, which trades as Utility Warehouse, hailed customer growth of 14.1% to just over 1 million, while service numbers increased by 328,949 to just over 3.1m.

There was also a "modest" tailwind from higher energy prices in the first quarter compared with the remainder of FY24.

However, revenue declined to £2.04bn from £2.48bn the year before, as the Ofgem energy price cap averaged £2,140, down from £3,100 in 2023.

Telecom Plus said that with its recent strong rate of customer growth continuing into FY25, it is confident of delivering organic net customer growth of between 12% and 14% in FY25. Meanwhile, adjusted pre-tax profit is expected to be between £124m and £128m.

Market Movers

FTSE 250 - Risers

CMC Markets (CMCX) 272.50p 7.28%
Investec (INVP) 584.50p 7.05%
Energean (ENOG) 1,045.00p 5.93%
Ninety One (N91) 168.20p 4.80%
Hargreaves Lansdown (HL.) 1,123.50p 4.66%
Patria Private Equity Trust (PPET) 568.00p 4.60%
Jupiter Fund Management (JUP) 79.00p 4.36%
Apax Global Alpha Limited (APAX) 153.80p 4.34%
Close Brothers Group (CBG) 449.80p 4.27%
Trustpilot Group (TRST) 217.00p 3.83%

FTSE 250 - Fallers

PureTech Health (PRTC) 213.50p -2.51%
Telecom Plus (TEP) 1,836.00p -2.03%
Crest Nicholson Holdings (CRST) 244.20p -1.61%
Indivior (INDV) 1,261.00p -1.56%
TUI AG Reg Shs (DI) (TUI) 583.00p -1.27%
Wizz Air Holdings (WIZZ) 2,316.00p -1.19%
Foresight Solar Fund Limited (FSFL) 87.70p -0.90%
Games Workshop Group (GAW) 9,460.00p -0.89%
Worldwide Healthcare Trust (WWH) 354.00p -0.70%
Edinburgh Worldwide Inv Trust (EWI) 142.80p -0.42%


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