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Cape shares soar 46% on French bid

Oil services specialist accepts £332 million cash bid from Altrad Investment Authority, the latest example of overseas bidder exploiting weak pound.

 
Cape shares soar 46% on French bid

A knockout bid for Cape (CIU), the oil services specialist, has provided some relief from markets worried about rising interest rates and the falling oil price.

Shares in Cape soared nearly 46% to 264.5p after it agreed to a 265p per share bid of £332 million in cash.

The buyer is Altrad Investment Authority, a privately owned French construction equipment maker that is the latest overseas bidder to take advantage of the weak pound.

Although the 83p gain in the share price indicates a big premium, Altrad, a provider of scaffolding and light construction services, is acquiring Cape below its peak share price of 335p reached in 2014.

Like all companies in its sector, Cape was hit hard by the slump in the oil price in 2015 although last year’s second half recovery in crude boosted its full-year results in March, when it reported adjusted profits before tax of £57.4 million, up from £44.7 million the previous year.

Last month it said it expected this year’s results to be ‘materially ahead of previous expectations’, although it added that 2018 would be more challenging.

The takeover is a fillip for investors in the M&G Recovery fund, managed by Tom Dobell, which holds 6.6% of Cape. Other leading fund investors are Derek Stuart’s Artemis UK Special Situations , which owns 4.8% and Henry Dixon’s Man GLG Undervalued Assets , with 2.8% of the company.

Mercantile (MRC ), the UK mid cap investment trust managed by Guy Anderson at JPMorgan, owns 1.9%, and James Henderson’s Lowland Investment Company (LWI ) owns 1.5%, according to Thomson Reuters.

The bid comes days after the UK’s largest payment processor, Worldpay (WPG), accepted a $10 billion bid from Vantiv, a US credit card technology firm.

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