Market report: Share sale rumours weigh on Meggitt
Shares in Meggitt fell on Thursday after Bloomberg reported the engineer was considering selling up to $600m (£455m) of new stock to help it brace for a potential second virus wave.
Sources said that the company, which specialises in components and sub-systems for the aerospace, defence and selected energy markets, was working with advisers to review equity and debt funding options.
One measure under consideration is a share sale equal to as much as 20pc of the company’s issued capital.
An offering could be announced as early as this month, although no final decisions have been made, and Meggitt may also choose not to proceed with a transaction.
However, the news sent shares falling 12.7p to 282.5p.
It came as European equity markets handed back some of Wednesday’s gains to close in the red as nervous investors kept a close eye on stimulus talks in Washington and China-US tensions.
The FTSE 100 underperformed against its continental peers due to the pound’s strength on the back of a less pessimistic outlook by the Bank of England. The London benchmark index fell 1.27pc to 6,026.94, with internationally exposed companies such as GlaxoSmithKline and Unilever ending the session lower.
In the eurozone, the Frankfurt Dax and Paris CAC fell 0.5pc and 0.98pc respectively.
Insurer Aviva was one of the biggest FTSE 100 risers after revealing its international business could be “managed for long-term shareholder value” – a statement which analysts said pointed towards a possible sale.
Citi’s James Shuck said such a move could create “significant value”, which would eventually send Aviva shares up as much as 50pc.
It ended 13.2p higher to 297.5p, a rise of 4.6pc.
Elsewhere, Serco dropped 27.39p to 142.01p after its first-half results pointed to looming uncertainty. The outsourcer’s revenue was up 23pc to £1.82bn in the first half of the year, with profit rising from £6.7m to £76.4m.
Those results were in line with expectations, but analysts cautioned the road ahead looked uncertain, with doubts over how long a boost from Covid-related work could last.
Meanwhile, chemicals group Synthomer rose 6.4p to 301.8p on the FTSE 250 after it restated guidance for 2020 and confirmed it was hoping to return to the dividend list this year.
The group’s profit before tax dropped 16.8pc in the first half of the year, falling to £58.4m.
But it said there had been “no material disruption” to its operations, adding it expected to see more normalised trading levels as demand rebounded. Morgan Stanley analyst Charlie Webb said the group had a “better than expected” June and July.
