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(Alliance News) - Stocks in London closed mixed on Monday amid a fresh burst of mid-and-small cap M&A activity, while the wider market watched as US-China trade talks resumed.
The FTSE 100 index fell 5.63 points, 0.1%, at 8,832.28. The FTSE 250 ended up 128.63 points, 0.6%, at 21,285.91, and the AIM All-Share climbed 7.01 points, 0.9%, at 763.89.
The Cboe UK 100 ended flat at 878.81 on Monday, the Cboe UK 250 added 1.0% at 18,790.89, and the Cboe Small Companies climbed 0.3% at 16,945.55.
In Paris, the CAC 40 fell 0.2%, while Frankfurt's DAX 40 ended 0.5% lower.
The pound was quoted at USD1.3556 late on Monday afternoon in London, higher compared to USD1.3522 at the equities close on Friday. The euro stood at USD1.1419, higher against USD1.1387. Against the yen, the dollar eased to JPY144.42 compared to JPY144.93.
On London's FTSE 250, Spectris leapt 64% after receiving a more than GBP3.7 billion cash and shares bid from private equity firm Advent International LP.
Should a firm offer be made, "the board has carefully considered the proposal together with its advisers and concluded that the proposal is at a value that the board would be minded to recommend unanimously to Spectris shareholders," said Spectris.
Meanwhile, Alphawave IP soared 19% as it agreed to a USD2.4 billion takeover from US semiconductor firm Qualcomm.
The cash deal values the London-listed high-speed connectivity solutions firm's shares at USD2.48 each, or around 183 pence.
"Qualcomm's acquisition of Alphawave represents a significant milestone for us and an opportunity for our business to join forces with a respected industry leader and drive value to our customers," said Alphawave Chief Executive Officer Tony Pialis.
Charles Hall at Peel Hunt noted there have been 30 bids for UK companies at over GBP100 million market value year-to-date with a total value of GBP25 billion.
At the same time there has been just one initial public offer offer year-to-date of more than GBP100 million, he pointed out.
"Companies in the UK seem to be far more attractive to acquirers than investors. The root cause is the consistent outflow of capital from domestic markets. If we want the UK equity market to thrive, an urgent rethink is required to ensure that UK capital backs UK companies," Hall said.
"The scale of M&A and lack of IPOs is resulting in a material reduction in the number of UK listed growth companies. It is essential that action is taken to ensure the health of the ecosystem and enable companies to grow, scale and stay in the UK. We believe this can be done through reform of pension funds, ISAs, and stamp duty," Hall added.
In New York, the Dow Jones Industrial Average was down 0.2%, the S&P 500 climbed 0.1% and the Nasdaq Composite sat 0.3% higher at the time of the closing bell in London.
The yield on the US 10-year Treasury was quoted at 4.49%, stretching from 4.48% on Friday. The yield on the US 30-year Treasury was quoted at 4.96%, widening from 4.94%.
After a round of talks in Geneva last month, the US and China will sit down at the negotiating table in London on Monday to attempt to preserve a fragile truce on trade, despite simmering tensions.
US Treasury Secretary Scott Bessent, Commerce Secretary Howard Lutnick and Trade Representative Jamieson Greer will lead the US delegation, President Donald Trump announced Friday.
Chinese Vice Premier He Lifeng – who led Beijing's negotiating team in Geneva – will also lead the team in London, the foreign ministry announced at the weekend.
On the FTSE 100, M&G rose 3.2% as UBS upgraded to 'buy', but WPP fell 2.8% after it said Mark Read will step down as chief executive officer at the end of 2025 after seven years leading the company.
Read has spent over 30 years at the company and took on the role of CEO in September 2018, following the abrupt departure of founder Martin Sorrell.
In London, shares in Cordel plunged 12% after it warned full-year revenue will be lower than forecast.
The London-based company, which uses artificial intelligence to supply transport corridor analytics, expects to report revenue in the range of GBP4.7 million and GBP5.0 million for the financial year to June 30. It would represent growth of up to 12% from GBP4.4 million a year prior.
But Chief Executive John Davis said it will be "lower than forecast", despite the firm making "excellent strategic progress" in the financial year.
Broker Cavendish lowered its financial 2025 revenue forecast to GBP4.8 million from GBP6.2 million.
CEO Davis said economic uncertainty, particularly in the US, has "unfortunately led to protracted sales cycles and delayed revenue, which has impacted our normally strong second half revenue".
Elsewhere Dunelm fell 3.9% after RBC Capital Markets downgraded to 'sector perform' from 'outperform'.
"We view Dunelm as a high quality business. It's cash generative, has executed well in recent years and expansion potential has stepped up. But we think this is now more reflected in its valuation," the broker said in a research note.
Meanwhile, Trustpilot slid 5.8% as Panmure Liberum slapped a 'sell' rating on the company.
Analyst Sean Kealey thinks Trustpilot finds itself "at the foothills of a complex multi-year" business transition.
He argued that the current valuation assumes "perfect execution" over a "multi-decade time horizon despite near-term macro risks and medium-term business profile uncertainty."
The biggest risers on the FTSE 100 were Melrose Industries, up 16.80 pence at 484.60p, Spirax, up 190.00p at 5,940.00p, M&G, up 7.40p at 251.20p, JD Sports Fashion, up 2.04p at 82.60p, and Fresnillo, up 32.00p at 1,374.00p.
The biggest fallers on the FTSE 100 were WPP, down 15.40p at 543.40p, Hiscox, down 33.00p at 1,318.00p, Aviva, down 11.80p at 615.00p, Marks & Spencer, down 6.90p at 359.80p and Haleon, down 7.40p at 397.80p.
Brent oil rose to USD66.88 a barrel late in London on Monday afternoon, from USD66.21 late Friday. Gold was quoted slightly lower at USD3,329.84 an ounce against USD3,330.06.
Tuesday's economic calendar has UK unemployment and average earnings data and the BRC retail sales monitor overnight.
Tuesday's UK corporate calendar has a trading statement from housebuilder Bellway, and transport operator FirstGroup.
By Jeremy Cutler, Alliance News reporter
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