MARKET REPORT: Marston’s shares fall flat after bidder walks away

Shares in Marston’s plunged nearly 13 per cent after an American private equity suitor abandoned plans for a takeover.

The pub group’s stock fell 12.6 per cent, or 12.55p, to 86.8p as Platinum Equity ended its interest in the pub group, dragging shares in the sector down with it.

Platinum approached the Wolverhampton-based company with offers worth 88p and 95p per share in December.

Pub group Martson’s stock fell 12.6 per cent, or 12.55p, to 86.8p as its private equity suitor Platinum Equity ended its interest in a takeover

It returned with a third 105p a share offer in January that valued Marston’s at £666million.

But the board of Marston’s, which has 1,700 pubs, rejected the approach, saying it ‘significantly undervalued’ the business.

In an update yesterday, Platinum said ‘after careful consideration it does not intend to submit a revised proposal and it will not make a firm offer for Marston’s’.

Upper Crust owner SSP has been trying to win the upper hand over the coronavirus for the past year. 

Stock Watch – MJ Gleeson 

Housebuilder MJ Gleeson is expecting its results for the year to be ‘significantly ahead’ of expectations after it saw strong demand for its low-cost homes.

In the first half of its financial year, for the six months to December, its revenue was up 35.8 per cent to £142.6million, as it sold 951 homes – up from 811 the same time a year earlier.

And as the average selling price increased 9.1 per cent to £140,600, the firm’s profits leapt 52.6 per cent to £20.3million. 

Shares rose 6 per cent, or 44p, to 780p.

But with barely any commuters visiting its train station and airport outlets, the café chain is struggling to make ends meet. 

In an announcement to investors, it insisted that it was ‘strongly placed to capitalise on the recovery of the travel sector’, whenever that might be.

And it added that it had plenty of spare cash, with around £520million in cash and unused debt facilities.

This included a £300million loan from the Bank of England’s Coronavirus Corporate Financing Facility (CCFF), which it drew down from the Bank in full this month.

It said this was purely because the scheme was closing in March, and it wanted to make sure it had the money it needed.

But SSP, which also owns Caffè Ritazza, is burning through around £25million to £30million per month, even though most of its 2,700 sites are closed.

It expects this to remain the case until at least the end of March. So the chain admitted it was considering asking investors for more cash, for the second time since the pandemic began.

Last March it raised £216million through selling new shares, and this time it is rumoured to be mulling a £500million rights issue, meaning existing investors will be offered the chance to buy new shares in proportion to their existing holdings.

SSP said it was evaluating ‘a range of funding options, both debt and equity, that would further strengthen its balance sheet’.

Shares slumped 11.7 per cent, or 37p, to 280p.

Polypipe helped to buoy the FTSE 250 (up 0.1 per cent, or 21.41 points, to 21,017.85), jumping 10.9 per cent, or 56p, to 570p as it managed to sell new shares for a premium. 

This is unusual. When a company wants to raise money from investors, it usually has to offer shares at a discount to encourage buyers to snap them up.

But Polypipe managed to raise £96.3million from selling shares for 515p each, when they were only trading at 514p on Wednesday.

The firm, which makes plastic piping systems for houses, businesses and infrastructure projects, wanted to raise the money to pay for its £210million acquisition of water filtration company Adey – and investors clearly wanted to get in on the action.

The FTSE 100 index crept up 0.1 per cent, or 4.36 points, to 6,528.72, kept going by bottling company Coca-Cola HBC.

The firm said its bottling volumes were improving in the second half of last year as it adapted to changing customer behaviour.

The pandemic has caused a rise in demand for at-home drinks, but has stunted sales of bottles sold in bars and pubs. Despite its ‘agility’, revenue was down 12.7 per cent to £5.4billion, and profits fell 14.9 per cent to £364million.

But this was better than expected, and shares climbed 4.7 per cent, or 105p, to 2365p.

This post first appeared on Dailymail.co.uk