Schroders’ blockbuster takeover deal has pushed the FTSE 100 to a fresh record.
London’s blue-chip index scaled to a new record of over 10,500 points, but it was bittersweet as it was boosted by Schroders, which has agreed to a £9.9billion takeover deal that will see it leave the FTSE.
Shares in the investment giant surged nearly 30 per cent after a surprise takeover deal by US asset manager Nuveen.
The deal marks another blow for the London market, which has been hit by a fresh exodus of companies as they’re either taken private or look to list elsewhere.
It is the second FTSE 100 company to receive a takeover bid this year, after Zurich swooped for Beazley in an £8billion deal earlier this month.
Nuveen’s cash offer for Schroders valued the firm at 590p in cash, a 29 per cent premium on Wednesday’s closing price. Shares in the firm are now trading at 588p.
Schroders will leave the FTSE later this year after a takeover by US asset manager Nuveen
Other financial companies enjoyed a boost, with Lloyds, Legal & General and Prudential all trading up this morning.
Meanwhile, wealth managers started to scale back some of their share price losses, after being hit by a sell-off on Wednesday amid mounting artificial intelligence (AI) concerns.
St James’s Place was up 1.2 per cent after losing as much as 12 per cent on Wednesday.
Susannah Streeter, chief investment strategist at Wealth Club said: ‘This will go down as a week of huge upheaval for the UK asset management landscape, with this mega deal arriving just as valuations had taken a hit over worries about AI disruption.
‘This takeover demonstrates the allure UK assets hold and has helped boost shares in other wealth managers and banks. There’s also been a fair amount of bargain hunting after yesterday’s dramatic falls.’
Software firm Relx shrugged off AI fears, rising 1 per cent this morning, but it’s not enough to claw back share price losses of over 30 per cent in the past month.
The FTSE shrugged off gloomy GDP data, which showed the economy grew by just 0.1 per cent in December.
While three-quarters of the FTSE’s members generate their earnings overseas, the more domestic-facing names like housebuilders were dragging the index down.
British Land and Land Securities were both down around 2 per cent, while Unilever dipped 1.3 per cent with investors disappointed after it cut its outlook.
The FTSE 250 gained as much as 100 points, nearing a fresh record.
The FTSE 100 had fallen back a little by lunchtime trading – but is still up 0.2 per cent to 10,491.
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