Latest Share Chat

Britain's FTSE boosted by an unsolicited bid for Smurfit Kappa

Tue, 06th Mar 2018 09:24

(For a live blog on European stocks, type LIVE/ in an Eikonnews window)

* FTSE 100 up 0.9 pct

* Smurfit Kappa jumps 17 pct on unsolicited offer

* Sector peers Mondi and DS Smith rise

* Just Eat set for worst trading day

By Julien Ponthus

LONDON, March 6 (Reuters) - An unsolicited bid for Irishpackaging group Smurfit Kappa from U.S.-based InternationalPaper lifted shares in the whole sector on Tuesday, providing aboost to Britain's top share index.

The FTSE 100 was up 0.9 percent at 7,180 points by0907 GMT, slightly higher than the European average as worldmarkets shrug off trade war fears or political risk concerns inItaly following its inconclusive general election.

Shares in Smurfit Kappa, Europe's largest producerof paper-based packaging, jumped 17 percent to 33.7 euros afterthe company said the offer from International Paperfailed to reflect its growth prospects and the industry'sattractive outlook.

"We believe an offer above 33 euros per share would berealistic" to start discussions between both groups, Jefferiessaid in a note where it saw a "positive M&A read" to packagingpeers DS Smith and Mondi MNDI.L>.

The two groups, also listed in London, rose 4.5 and 3.9percent respectively and were among the session's top gainers.

UK testing company Intertek Group secured thesecond-best position up 6.1 percent after publishing itsfull-year results.

Things went very differently for Just Eat, whichdisappointed investors with its 2018 core earnings forecast andwas set for its worst trading day ever, down 12.5 percent.

Just Eat said it would invest an additional 50 millionpounds to stay ahead of its food delivery rivals, a figure whichsurprised some investors.

"If we were honest we did not expect a figure for totalinvestment for 2018 to the magnitude of 50 million pounds,"Berenberg analysts said.

Another loser was Industrial equipment rental companyAshtead Group whose shares were down 4.9 percent afterit released third-quarter results.(Julien PonthusEditing by Peter Graff)