Market report: Stelios charms traders into coughing up for easyHotelComments Off on Market report: Stelios charms traders into coughing up for easyHotel
EasyJet founder, Sir Stelios Haji- Ioannou, today proved he has lost none of his appeal in the City as his budget hotel chain, easyHotel, managed to source investors willing to fork out well above the market rate for its shares.
The AIM-listed budget hotel group raised £38 million in a share placing at 100p — almost 20% higher than yesterday’s closing price, underlining the strong demand for property investments.
Almost 30 million shares will be offered to Icamap, a Luxembourg-based property fund set up last year, which will have a 29% stake. It will become the second-biggest shareholder behind Haji-Ioannou’s easyGroup, whose 56% stake will be diluted to 35%.
The funds will be used to buy sites for five new hotels as the company shifts towards owning hotels.
It came as the company said trading had been strong since May and was on track to hit forecasts for the year.
The placing lifted easyHotel by 13.5p to 98p, helping it to return to pre-Brexit levels.
The wider market was buoyed by comments from Deutsche Bank boss John Cryan, who refuted reports he asked German Chancellor Angela Merkel for a “bail in” to help it settle the $14 billion (£11 billion) fine levied by US regulators.
Deutsche shares rose, lifting bank stocks in London, including Royal Bank of Scotland, up 1.3p at 175.9p, as the FTSE 100 improved 59.35 points to 6867.02.
Smiths Group, 33p higher at 1420p, was among the blue-chip winners as its annual results impressed.
The engineering firm, which makes medical devices and products used in oil and gas production, lifted revenues by 2% to £2.95 billion with pre-tax profits down less than expected at £451 million.
Investors welcomed the appointment of former New Look finance chief Mike Iddon at Pets at Home, ending five months without a permanent bean counter.
The company announced it April that Graeme Jenkins would not be joining as planned amid an investigation into supplier payments at Target Australia, his former employer. Pets at Home shares rose 2.5p to 234.9p.
Under-pressure retail tycoons Sir Philip Green and Mike Ashley received some good news as MySale, the flash sale retailer they back, told investors that trading since June had exceeded expectations.
Chief executive Carl Jackson said the duo remain “extremely supportive” and said MySale had seen “no impact from the media furore” — relating to BHS and Sports Direct.
Shares in the AIM-quoted company improved 3.19p to 95.19p.