Market Report: Could private equity be interested in a bid for Majestic Wines?

 

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The Independent Online

It’s approaching that time of year when City boys stock up on bottles of Moet and Merlot for the Christmas break, but wine was on traders’ minds for a different reason yesterday.

A rumour is trickling through the Square Mile that private equity could be interested in a bid for Majestic Wines, which has fallen 30 per cent so far this year. No firm names are in the frame but a price of £5.50 is being tossed about. Some traders are biting – by Friday the company had risen 17 per cent since its low of 324p three weeks earlier. Yesterday Majestic put on a further 16p to 393.75p, albeit on thin volumes.

The FTSE 100 slipped 58.5 points to 6,487.97, dented by poor eurozone manufacturing data.

EasyJet climbed 40p to 1,540p, buoyed by strong numbers from its short-haul rival Ryanair, €0.55 better at €8.15. The figures also helped the British Airways and Iberia owner IAG, which added 5.1p to 414.3p. InterContinental Hotels rose 36p to 2,405p.

Diageo dipped 24.5p to 1,813.5p on news of a $1bn (£630m) swap of its Bushmills whiskey brand for Casa Cuervo’s Don Julio tequila. Shore Capital’s Phil Carroll said: “The fact that the deal will not be [profitable] for four years may worry some investors”, adding that the broker was “slightly disappointed to see the sale of Bushmills, which grew sales by 7 per cent in the last financial year.”

Digital and technology businesses have been hammered this year, with some down as much as 50 per cent, but the sector enjoyed a revival yesterday. Ocado added 25.6p to 274.3p thanks to bargain hunting, while Asos put on 91p to 2,747p and AO World rose 14.3p to 180.2p. Traders pointed to ongoing speculation that Amazon could bid for either or both, and recent good news flow, as supporting the pair’s shares prices.

AA added 7.25p to 342p after Liberum started coverage of the breakdown recovery specialists with a buy rating.

Online video advertising specialist Blinkx was on the march, adding 0.75p to 28.75p after the City financier Richard Griffiths, the founder of Ora Capital, increased his stake in the business from 4.62 per cent to 5.47 per cent.

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