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Worldpay soars as bidders circle Buxton stock

FTSE 100 drifts lower despite shares in Britain's largest payment processor soaring 22% on takeover approaches.

 
Worldpay soars as bidders circle Buxton stock
 

The prospect of a bid battle for Worldpay (WPG) lit up the FTSE 100 as shares in the UK’s largest payment processor soared 22%.

The company, which span out of Royal Bank of Scotland in 2010 and spent five years in private equity ownership before floating on the stock market in 2015, said it had received takeover approaches from Vantiv (VNTV.N), a US credit card technology firm, and JPMorgan Chase Bank (JPM.N).

Shares in the company surged 70p to 389.7p, as analysts at Mediobanca Securities suggested technology titans Google (GOOGL.O), Amazon (AMZN.O) and Apple (AAPL.O) could join the fray.

This boosted Worldpay’s market value to £7.8 billion, benefiting investors in Richard Buxton’s Old Mutual UK Alpha and Nigel ThomasAXA Framlington UK Select Opportunities funds, which respectively hold stakes of 1% and 0.9% in the company, according to Thomson Reuters data.

Automated payments providers are a popular target at the moment with Danish payment services provider Nets A/S (NETS.CO) revealing at the weekend it had also received bid approaches.

The M&A story was not sufficient to lift the UK stock market as the FTSE 100 drifted over seven points, or 0.1%, lower to 7,369.8 with falls in telecom and tech stocks outweighing gains in industrials.

Mid caps and smaller companies edged lower with the FTSE 250 index down 27 points to 19,293 and the FTSE Small Cap index off nearly eight points at 5,581.

Sainsbury heatwave

J Sainsbury (SBRY) stood out among blue chip stocks as a first quarter update from the UK’s second largest supermarket showed the benefit of its acquisition of catalogue retailer Argos. Excluding fuel, like-for-like sales in the 16 weeks to 1 July grew by 2.3% with Laith Khalaf, senior analyst at Hargreaves Lansdown commenting:

‘The recent heatwave helped to boost sales at Sainsbury’s group, as customers turned to the Argos website to buy electric fans and paddling pools to keep cool in the hot weather. Sales also rose at the supermarket checkouts, though with the cost of food imports rising because of weaker sterling, it remains to be seen how much of this will feed through into profits,’ he said.

Sainsbury shares rose nearly 1% to just over 251p.

Biomedica hopes

Outside the FTSE 100 Oxford Biomedica (OXB) shares jumped 11% to 9.5p amid ongoing excitement over its technology to reprogram the HIV virus to kill cancer cells.

Shares in the company, a spin-out from Oxford University, have advanced 80% or 4p in the past week on hopes the treatment, developed in partnership with Novartis and the University of Pennsylvania, will soon be put forward by the US Food and Drug Administration for approval.

The company’s biggest external investor is Tom Dobell, manager of the M&G Recovery fund which holds over 17% of the shares.

Imagination Technologies (IMG) advanced 6% or 8.5p to 152p as the silicon chip designer, recently dropped by Apple as a supplier, said preliminary talks with potential bidders continued. Full-year results showed adjusting operating profits nearly trebling to £29.2 million from £10.5 million.

Construction dip

On currency markets the pound recovered from an earlier fall after the release of data showing a cooling in construction last month. The purchasing managers’ index (PMI) survey fell to 54.8 in June from 56, an 18-month high, in May, although still well above the 50 level that separates growth from contraction. Against the dollar the pound traded slightly lower at $1.2934 although it firmed against the euro which stood at 87.71p.

The release follows yesterday’s similarly downbeat PMI manufacturing report yesterday. In confirming a slight slowdown in the economy the PMI report maintains a debate over whether the Bank of England should raise interest rates next month, for the first time in a decade, as officials, including governor Mark Carney, indicated it might do last week.

1 comment so far. Why not have your say?

Michael Loveridge

Jul 04, 2017 at 17:52

And so another UK tech success story is to be bought up at a bargain basement price by a rapacious US monster. It's very depressing.

Maybe it's about time the UK adopted a more French attitude to protecting UK companies against being sold off to foreign companies that are exploiting sterling's weakness.

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