Market Report: Takeover target Synergy jumps as watchdog is defeated

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US regulators looking to end the M&A healthcare party have had the door slammed in their face in a rare defeat for competition watchdogs.

An Ohio court rejected calls from the US Federal Trade Commission (FTC) to block the takeover of Synergy Health by Cleveland-based Steris, boosting shares in the FTSE 250 firm by 44% (690p) to 2270p.

Synergy, which sterilises medical instruments, agreed to a cash-and-shares buyout last October, worth £1.2 billion at the time, before the shares dived in May when the FTC revealed concerns about the takeover. 

Earlier in the week, the pair rescheduled shareholder votes to next Friday, raising hopes that the court might dismiss the FTC’s complaints. The takeover, a so-called tax inversion deal, would result in the enlarged group settling in the UK, where corporation tax is lower. 

A year ago, tax inversion deals were all the rage in the sector, but after a crackdown on controversial tax dodges US giants Pfizer and AbbVie called off deals for FTSE 100 heavyweights AstraZeneca and Shire respectively.

A careful speech from US Federal Reserve chair Janet Yellen prompted stocks to rebound from yesterday’s heavy falls, lifting the FTSE 100 up 116.04 points, some 2%, to 6077.53.

She suggested a rise in interest rates is still on the cards in 2015 and struck a more upbeat tone despite caution over the wider global economy.

Angus Campbell, senior analyst at FxPro, said: “This means investors need to closely monitor not just US data, but the situation across the other major economies, in particular Asia.”

Embattled commodities giant Glencore, which has lots two-thirds of its value this year, rose back above 100p, up 4.39p to 103p, after another bruising day for the stock yesterday.

The Falklands oil drillers were on the rise  after revealing they are having another crack at drilling on the Isobel/Elaine licence, after the first attempt was  suspended in May owing to high pressure.

Premier Oil was 3.35p richer at 67.25p, Rockhopper rose 0.5p to 40p, while Falkland Oil and Gas gained 0.84p to 23.84p.

Israel-based Bagir, which makes suits for Austin Reed, plunged 1.6p or 29% to 3.9p as first-half losses widened and sales shrank.

The company, which lost M&S as a customer shortly after its float in April last year, warned that the second half of 2015 would be even tougher.

Elsewhere, oil explorer Alba Mineral Resources gained 0.03p to 0.4p after increasing its stake in the Horse Hill well near Gatwick, dubbed the “Gatwick Gusher”, to just below 10%.

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September 26, 2015 |
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