MARKET REPORT: Private equity predators swoop on two more FTSE 250 firms

Private equity predators swooped on another two London-listed companies yesterday as takeover frenzy gripped the City.

Shares in the FTSE 250 payments provider Network International jumped 23.2 per cent, or 56.4p, to 300p following an approach from a consortium of CVC Partners and Francisco Partner Funds.

After the market closed, Dechra Pharmaceuticals revealed it was in talks with private equity group EQT over a possible £4.6billion deal.

The news came too late for traders to react but having risen 3.4 per cent, or 86p, to 2776p before the market shut, the stock will be in sharp focus when trading resumes.

The approaches are the latest swoops in London, fuelling fears British companies are being bought on the cheap. Some have been snapped up as Covid hammered share prices in what was dubbed ‘pandemic plundering’.

Takeover bid: Shares in the FTSE 250 payments provider Network International jumped 23.2% following an approach from a consortium of CVC Partners and Francisco Partner Funds

Susannah Streeter, head of money and markets at Hargreaves Lansdown, said: ‘Swoops by overseas buyers have undoubtedly been causing unease among politicians, particularly given the Government’s efforts to try to lure more firms to list in London. It’s fresh evidence that UK assets are considered to be cheap.’

Network International, which is based in Dubai and does payment processing in the Middle East and Africa, said discussions are ‘ongoing’. ‘There can be no certainty that any offer for Network will be made,’ it added.

It is now worth £1.3billion. It listed four years ago at 435p, valuing it at £2.2billion.

Vet firm Dechra, which makes drugs to treat pets, has been a member of the London stock market since 2000. The proposed deal would see its shareholders pocket 4070p a share.

It will recommend the takeover if the private equity group announces a firm intention to make an offer.

The FTSE 100 rose 0.2 per cent, or 18.54 points, to 7843.38 and the FTSE 250 was up 0.4 per cent, or 67.4 points to 19,070.13.

Housebuilders rallied following a double dose of good news. HSBC issued ‘buy’ ratings on most stocks and raised target prices by 29 per cent on average.

Stock Watch – Churchill China

Ceramics maker Churchill China said business will be even better this year following a strong 2022.

The 228-year-old group, which supplies cutlery, mugs and plates for hospitality companies such as hotels and caterers, saw revenue surge 36 per cent to £82.5million last year.

And its profit jumped by 52 per cent to £9.1million.

It increased its dividend payment to 31.5p a share last year, which was up from 24p in 2021. Shares rose 5.7 per cent, or 70p, to 1310p.

And the Royal Institution of Chartered Surveyors pointed towards a rebound in the property market later this year.

Barratt Developments rose 2.4 per cent, or 11.1p, to 478.2p, Taylor Wimpey was up 2 per cent, or 2.4p, to 120.45p, Redrow added 3.3 per cent, or 15.8p, to 493.4p and Bellway gained 2.9 per cent, or 64p, to 2306p.

At Darktrace, the cyber security firm warned the worsening economic climate has made it harder to win new customers.

It meant its full-year annual recurring revenue is expected to grow by around 29pc, towards the lower end of previous guidance. It climbed 2.5 per cent, or 6.1p, to 249.1p.

The boss of Oxford Instruments is to to bring his seven-year tenure to an end. Ian Barkshire will be replaced by Richard Tyson, the chief executive of TT Electronics.

Oxford makes components including X-ray tubes, microscopes and technology to create semiconductor computer chips, and recorded a rise in orders and a 22 per cent increase in revenues across the US, Europe and Japan in the year to March 31. Shares surged 5.7 per cent, or 140p, to 2585p.

Finally, Diageo called time on its French and Irish listings following a review into the volume of shares traded, the costs and administrative requirements.

The drinks giant behind Guinness, Johnnie Walker and Captain Morgan hopes to delist its shares from Euronext Paris and Euronext Dublin next month.

It will retain its London and New York listings. Shares inched up 0.2 per cent, or 8p, to 3684p.