MARKET REPORT: Takeover speculation is skyrocketing at Aviva
Aviva was the latest household name to be at the center of takeover rumours.
Shares in the FTSE 100 insurer rose 5.3 per cent, or 20.7p, to 409p after reports that three foreign bidders were considering making a bid.
The German Allianz, the Intact Financial Corporation of Canada and the Scandinavian group Tryg are among those interested. At least one of them is said to be considering an offer of £6 per share. Aviva declined to comment.
But that did little to calm speculation in the city.
“Is Aviva the next takeover target for the FTSE 100?” “The market certainly seems to think so,” said Russ Mould, investment director at AJ Bell.
Rumors: Aviva shares rose sharply after three overseas bidders were reportedly considering making a bid
“Aviva is one of many stocks in the UK market that look unloved but still offer the potential for long-term value creation.”
“One of the most obvious times to buy a company is when it has made solid progress with a turnaround program, as this reduces investment risk.”
“Aviva has shed the shackles of a conglomerate and sharpened its focus through asset disposals and a new impetus for growth, making it a stronger company. “This of course makes it more attractive to a potential suitor.”
Aviva already won a vote of confidence from the City earlier this week when Jefferies upgraded its rating to “buy” from “hold” and raised its price target to 480p from 445p.
The insurer’s profits were filtered through the blue-chip index, with peers Legal & General rising 3.2 percent, or 6.7 pence, to 217.1 pence, and Prudential rising 1.5 percent, or 12.4 pence, to 867 .6 pence and Beazley rose 1.7 per cent 9 pence to 542 pence and Phoenix rose 1.9 per cent or 8.9 pence to 467.1 pence. The FTSE 100 rose 0.6 percent, or 43.04 points, to 7,494.58 and the FTSE 250 rose 0.8 percent, or 132.34 points, to 17,732.32.
Oil prices continued to stabilize at the end of a turbulent week, with a barrel of Brent crude hovering around $84. But the possibility of lower fuel costs proved beneficial for airline stocks.
Easyjet rose 2.5 percent or 11 pence to 449.3 pence, IAG rose 0.8 percent or 1.25 pence to 156.35 pence and Wizz Air rose 0.6 percent or 10.5 pence 1930.5 pence.
Shell also posted gains after it reported improved trading conditions for its gas business in the third quarter.
Michael Hewson, senior market analyst at CMC Markets, said: “Given the strong rise in oil prices since June, one would expect a significant improvement in oil margins over the quarter, however this was barely mentioned in today’s production update.”‘
Shares in the oil giant rose 1.9 percent, or 49 pence, to 2,581.5 pence.
De La Rue investors were comforted after the banknote printer raised its profit forecast for the six months to the end of September. Shares rose 1.5 percent, or 0.9 pence, to 61.4 pence.
SRT Marine Systems, which provides fisheries monitoring services, fell 6.8 per cent, or 3p, to 41p after saying it was likely to report a loss of £4.5m for the six months to the end of September become.
Petra Diamonds suffered even bigger losses as the company, which mines in South Africa and Tanzania, fell 9.3 percent, or 6.2 pence, to 60.8 pence after the selling price of its gemstones fell.
Spirent Communications was in the red in what can only be described as a dismal week.
The FTSE 250 company, which tests 5G mobile and Wi-Fi networks, slumped 31 percent on Wednesday after issuing a profit warning and saying the telecoms market is “extremely challenged at the moment” as its biggest customers limit their spending shortened.
Spirent Communications fell a further 2.2 per cent, or 2.1p, to 91.7p yesterday after Deutsche Bank Research cut its price target to 110p from 200p.