Market report: Sepura sell-off after low-ball China bid

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Michael Sherwood might be winding down at Goldman, but he must have choked on his cornflakes this morning when he saw the size of Chinese firm Hytera’s bid for Sepura.

Shares in the London-listed walkie-talkie maker, in which “Woody” has a 4.6% stake, dived 4.25p, or 18%, to 19.5p today when its directors agreed to a lowball 20p-a-share offer worth just £74 million from Hytera.

Sepura’s battered shares were trading at 18.5p when it confirmed the takeover talks six weeks ago, but were closing in on 25p yesterday in anticipation of a punchy offer. 

Sherwood, who said he is quitting as Goldman’s co-head of Europe last month after 30 years at the investment bank, bought Sepura out of administration in 2002 for just £1 with three other Goldman alumni: Jonathan Green, co-founder of hedge fund GLG Partners, Sion Kearsey, co-founder of private equity firm Kelso Place Asset Management, and John Drinkwater, who set up Kelso with Kearsey.

They floated Sepura five years later for a £200 million valuation. However, despite a steady recovery from the financial crisis, a series of profit warnings this year has caused shares to tank from almost 200p in April.

On the wider market, thin trading volumes put paid to hopes the FTSE 100 could break through the 7000 barrier and kick on after yesterday’s rally as it edged 2.29 lower to 6996.72.

Industrial thread-maker Coats strengthened 3.4p to 49.4p after a £255 million settlement with the pensions regulator over two out of its three pension schemes, covering 90% of its liabilities in the UK.

Lee Rochford, Virgin Money’s former bean counter, starts as chief executive of Arrow Global — off 1.25p today at 288.75p — in January and showed his confidence by buying almost £500,000 of the debt recovery specialist’s shares. 

All-inclusive holiday-booking site On The Beach fell 17p to 259p after its management, including chief executive Simon Cooper, dumped shares for £34 million.

Cherry-picker firm Lavendon rose 14.75p to 256.5p after accepting Loxam’s higher £425 million bid, although Belgain rival TVH is still considering a counter-offer.

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December 17, 2016 |
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