One of America’s biggest private equity groups has slammed on the brakes and reversed away from a takeover for bus and train operator First Group.
The owner of Greyhound buses and Great Western Railway has knocked back two offers from Apollo Global Management since mid-April, when the investment company revealed its interest.
A deal would have thrown a lifeline to the struggling transport firm, whose shares tanked last month after it issued a profit warning.
But Aberdeen-based First Group said the approaches ‘fundamentally undervalued the company’.
All change: First Group has knocked back two offers from Apollo Global Management since mid-April, when the £182bn investment company first revealed its interest
Apollo, which had until 5pm on Wednesday, has decided not to progress with a third bid, although it did not reveal its reason. First Group shares plunged 12.2 per cent, or 13.5p, to 97.5p.
The FTSE 100 ended the day down by the smallest of margins, slipping just 0.02 per cent or 1.39 points to 7565.75, while the FTSE 250 was up 0.85 per cent, or 172.84 points, at 20584.72.
Analysts said Kingfisher, the owner of DIY chain B&Q, might be targeted by activist investors.
Morgan Stanley said shareholders might push for the firm to break up if it fails in its cost-cutting plans. Shares rose 2.3 per cent, or 6.6p, to 287.8p.
Astrazeneca nudged up after revealing it had sold the rights to its anti-psychotic treatment Seroquel to Luye Pharma for £398million.
Under the terms of the agreement, Luye will distribute the drug in the UK, China, Brazil, Australia, Saudi Arabia, Mexico, Argentina and South Africa among others. Shares edged up 0.7 per cent, or 34p, to 5239p.
Stock Watch – Faron Pharmaceuticals
Faron Pharmaceuticals’ shares were obliterated after its flagship drug failed clinical trials.
The firm said that Traumakine, its treatment for acute respiratory distress syndrome, was only slightly more effective than a placebo.
A disappointed Markku Jalkanen, Faron’s chief executive, said: ‘We need to further analyse the data in order to understand how this study differs from our previous results.’
Shares fell 85.6 per cent, or 621p, to 104p.
On the FTSE 250, specialist buy-to-let lender Paragon confirmed speculation that it was interested in bidding for development finance lender Titlestone, which has a loan book totalling £600million.
Paragon stresses the deal is in the early stages and that a formal bid is not certain.
In a statement, the FTSE 250-listed lender said: ‘The purchase of loan books and bolt-on businesses represents a core part of Paragon’s growth and diversification strategy.’
Paragon’s shares ticked up 2.5 per cent, or 13p, to 540p.
Shares in RHI Magnesita, the FTSE 250-listed maker of refractory products for the metals industry, boomed on the back of a solid trading update and a broker upgrade.
Revenue was up 23 per cent to £653.7million in the three months to March, boosted by robust growth in its steel division.
Numis raised the firm from ‘hold’ to ‘add’ on the back of the announcement. RHI shares motored 9.7 per cent, or 440p, to 4990p.
Nanoco received a £1.8million performance-related cash boost from an unnamed US partner as part of a deal to supply it with so-called nanomaterials.
A spokesman said: ‘This demonstrates Nanoco’s ability to work with, and rapidly meet, our partner’s needs.’
Shares in the company jumped 7.9 per cent, or 3.5p, to 48p.
On the AIM market, Wey Education shares sunk by nearly a third after the firm posted a £153,000 loss in the six months to February 28, down from an £11,000 profit a year earlier.
The education provider’s shares tanked 31.1 per cent, or 8.25p, to 18.25p.
Oil company Mayan Energy’s shares rose after announcing increased production at its sites in Texas, which are now producing 272 barrels of oil a day.
Shares bumped up 3.5 per cent, or 0.02p, to 0.74p.
City law firm Rosenblatt made its debut on AIM, opening with a market cap of £76million.
By the end of the day, its shares closed at 106p, a premium on the placing price of 95p.