Insurer Direct Line saw its share price surge in early trading on Thursday after confirmation last night that the business had rejected an unsolicited takeover approach from Aviva. The cash and shares offer, originally tabled on 19th November, was worth 250p per share, a 59.7% premium to the closing price on 18th November. Direct Line management have rejected the approach, calling it opportunistic and failing to reflect the stand alone value of the business. Whether this paves the way for a bidding war remains to be seen but the Direct Line share price is up almost 40% by 9am.
The footwear manufacturer published interim results this morning and despite a double digit drop in sales, margin erosion and mounting pre-tax losses, shares have been finding support. The results are seen as being in line with what had been expected and a separate filing also confirmed the start date for the new CEO for January 2025. The cash position is robust and the Dr Martens share price – which had halved in value over the last 12 months – is now trading up around 13% on the day.
Another day, another private equity takeover of a London-listed company. Management of the bar and restaurant operator Loungers advised the market this morning that they had agreed terms with Fortress Investment Group to sell the company in an all cash deal worth 310p per share, a 30% premium to last night’s closing price. Once again this will raise questions as to why the London market is failing to provide adequate valuations for member firms, especially as the news coincided with the latest earnings update. Interim numbers highlighted a 19% increase in revenue, a 51% jump in operating profits and a 50 basis point improvement in margins. As an aside, the plan is to absorb the incoming higher wage costs as a result of the budget through faster than expected price rises, again adding fuel to the inflationary cycle. Loungers share price was 28% higher in early trade.
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