London midday: Stocks stay down but IDS gains on takeover

29th May 2024 10:29

(Sharecast News) - London stocks were still down by midday on Wednesday, but IDS bucked the trend after the Royal Mail owner accepted a takeover offer.

The FTSE 100 was 0.3% lower at 8,232.69.

Dan Coatsworth, investment analyst at AJ Bell, said: "The FTSE 100 started on the back foot on Wednesday after the mood darkened through the course of the day yesterday.

"Mixed trading in the US followed a positive reading of US consumer sentiment which, in turn, pushed back on expectations for rate cuts.

"The weakness for the UK's flagship equity index came despite higher oil prices lifting BP and Shell amid speculation OPEC will maintain supply cuts at its meeting on 2 June. Consumer goods companies, miners and financials acted as a drag on the UK market."

In equity markets, online supermarket Ocado was the worst performer on the FTSE 100 ahead of its expected demotion from the top-flight index in next week's reshuffle. St James's Place was in the same boat, while National Express owner Mobico fell as it faced relegation from the FTSE 250.

IWG slumped after chief executive after chief executive Mark Dixon sold 35m shares in the flexible workspace provider.

Anglo American lost ground as it rejected BHP's request to extend its 'put up or shut up' offer deadline, advising shareholders to take no action in response to the latter's latest attempt to sway the mining group into a £39bn takeover deal.

On the upside, Fresnillo shone as JP Morgan Cazenove sounded a confident note on the outlook for the precious metals miner and kept its rating on the shares at 'overweight'.

Royal Mail owner International Distribution Services rallied after saying it had reached an agreement with Czech billionaire Daniel Kretinsky on a takeover of the 500 year old company worth up to £5.28bn.

Kretinsky's EP Group is offering 360p a share along with the 2p final dividend for the year to March 31 and a special 8p dividend to be paid if the deal becomes unconditional. He has also pledged to maintain Royal Mail's guarantee of services six days a week for five years.

Susannah Streeter, head of money and markets at Hargreaves Lansdown, said: "There is still some caution about whether the deal will go ahead, given that the government has the power under the National Security and investment act to potentially block the deal. IDS comes with a lot of Royal Mail baggage, particularly the obligation to deliver letters six days a week as the UK's universal postal service, at a time when volumes are in sharp decline.

"But group's international arm GLS has long been considered the jewel in the company's crown, enjoying a level of success which Royal Mail has found elusive and EP Group will have been eyeing up the long-term opportunities here, particularly if inflation subsides further which should help margin growth."

Pets at Home gained as it posted a jump in annual sales but saw profits fall back, hit by availability issues.

Market Movers

FTSE 100 (UKX) 8,232.69 -0.26%

FTSE 250 (MCX) 20,587.02 -0.57%

techMARK (TASX) 4,786.70 -0.55%

FTSE 100 - Risers

Fresnillo (FRES) 632.50p 3.01%

United Utilities Group (UU.) 1,007.50p 2.62%

Shell (SHEL) 2,825.00p 1.60%

BP (BP.) 493.30p 1.29%

Severn Trent (SVT) 2,415.00p 1.26%

Admiral Group (ADM) 2,722.00p 1.11%

Next (NXT) 9,288.00p 0.87%

Associated British Foods (ABF) 2,663.00p 0.83%

NATWEST GROUP (NWG) 311.50p 0.68%

Hikma Pharmaceuticals (HIK) 1,915.00p 0.52%

FTSE 100 - Fallers

Ocado Group (OCDO) 388.30p -5.38%

International Consolidated Airlines Group SA (CDI) (IAG) 167.95p -3.31%

RS Group (RS1) 735.00p -2.46%

Intermediate Capital Group (ICG) 2,338.00p -2.34%

St James's Place (STJ) 483.40p -2.30%

National Grid (NG.) 860.20p -1.87%

Rolls-Royce Holdings (RR.) 443.30p -1.71%

Prudential (PRU) 752.00p -1.70%

Melrose Industries (MRO) 610.20p -1.64%

WPP (WPP) 817.20p -1.61%

FTSE 250 - Risers

Ithaca Energy (ITH) 121.80p 4.28%

International Distribution Services (IDS) 333.60p 3.86%

Pets at Home Group (PETS) 293.60p 3.60%

Pennon Group (PNN) 606.00p 2.19%

TP Icap Group (TCAP) 211.50p 1.93%

Jlen Environmental Assets Group Limited NPV (JLEN) 86.10p 1.29%

SDCL Energy Efficiency Income Trust (SEIT) 66.30p 1.22%

Hilton Food Group (HFG) 916.00p 1.22%

Hochschild Mining (HOC) 182.80p 1.11%

PureTech Health (PRTC) 228.50p 1.11%

FTSE 250 - Fallers

IWG (IWG) 193.60p -6.47%

Mobico Group (MCG) 55.50p -6.41%

Future (FUTR) 1,008.00p -4.82%

Moonpig Group (MOON) 155.60p -3.95%

Aston Martin Lagonda Global Holdings (AML) 129.60p -3.93%

Trustpilot Group (TRST) 207.50p -3.49%

AJ Bell (AJB) 379.50p -3.07%

Bank of Georgia Group (BGEO) 3,805.00p -3.06%

Ibstock (IBST) 168.40p -2.55%

Discoverie Group (DSCV) 728.00p -2.41%