MARKET REPORT: Sausage maker’s shares sizzle amid merger mania

MARKET REPORT: Sausage maker’s shares sizzle amid merger mania – Devro rockets following bid from one of Germany’s largest agricultural groups

Investors were given an end-of-week boost amid a slew of takeovers on the London Stock Exchange. 

The trading session was jam-packed with merger and acquisition mayhem as sausage casings maker Devro rocketed 62 per cent, or 119p, to 311p following a bid from one of Germany’s largest agricultural groups. 

Saria – part of the Rethmann family empire – offered 316.1p a share (or £667m) for Devro, which was a 65 per cent premium to its closing price on Thursday. 

Tasty: Saria offered 316.1p a share (or £667m) for Devro, which was a 65 per cent premium to its closing price on Thursday

Peel Hunt described the offer as a ‘knock-out’, while AJ Bell labelled it ‘very generous’. 

Saria said Devro would complement its Van Hessen sausage casings business and allow customers to access a wider market. The German group employs around 10,500 staff across 26 countries. 

Devro chairman Steve Good said: ‘We believe that Saria’s understanding of our markets, its strong financial position and the cultural fit will benefit the group’s business and employees. Devro directors have agreed unanimously to recommend that Devro’s shareholders accept the offer from Saria.’ 

But that wasn’t the only deal of the day. 

Curtis Banks joined in the party and confirmed it was in ‘advanced discussions’ on falling into the hands of a digital investment platform provider. Nucleus said it was mulling a possible cash offer for the self-invested personal pension providers. Curtis Banks, which floated at 190p in May 2015, surged 25.7 per cent, or 68p, to 333p. 

The FTSE 100 rose by 0.2 per cent, or 20.07 points, to 7486.67 while the FTSE 250 edged up 0.03 per cent, or 5.36 points, to 19,545.70. Housebuilders sank into the red following a bleak forecast. 

Berenberg said it cut profit forecasts for the sector by around 40 per cent because of soaring mortgage costs. The broker also slashed the target price for most stocks, with housebuilder Taylor Wimpey taking the biggest hit after shares fell 1 per cent, or 1.05p, to 104p. 

Imperial Brands added 1.2 per cent, or 26p, to 2126p after Deutsche Bank hiked the tobacco firm’s target price to 2325p from 2250p and reiterated a ‘buy’ rating. 

Cigarette sellers did well during the pandemic as people working from home found more time to indulge their habit. 

Meanwhile JD Sports will overhaul its pay policy after repeated shareholder revolts under controversial former boss Peter Cowgill. 

The retailer will place greater emphasis on share-based payouts for bosses, rather than the hefty cash incentives paid out under Cowgill. It slipped 0.9 per cent, or 1.15p, to 124.55p. 

Sofa seller ScS cheered a recent turnaround in fortune after orders, which plunged 14.4 per cent between July 31 and October 6, rose 1.3 per cent in the six weeks to the middle of November. It also launched a new share buyback programme worth up to £3.1m, and the stock rose 10.7 per cent, or 15p, to 155p. 

But LSL Property Services left investors spooked after warning the most profitable part of its business could be dragged down by a weaker mortgage market next year. It slumped 9.9 per cent, or 26p, to 236p. 

Breedon rose 5.9 per cent, or 3.4p, to 60.6p after the construction supplier said it was on course for a record profit this year. Revenue in the ten months to October soared 14 per cent to £1.19billion. 

And in a rare win for the London stock market, Conviction Life Sciences Company plans to float at 100p a share in a £100m listing later this year. 

The newly formed investment firm said many life sciences and medical technology businesses in the UK, Europe and Australia are ‘structurally undervalued’.