Friday 28 July 2017

Takeover bid lifts Zodiac in weak market

Reuters

European stocks dipped yesteray, though Zodiac Aerospace's shares surged after a takeover offer by France's Safran. Moneysupermarket.com also jumped after it reported strong results.

Zodiac Aerospace rocketed 22.8pc after Safran offered $9bn to buy the aircraft seat manufacturer.

After an initial positive reaction, shares in Safran turned lower to end down 5.4pc. Some analysts warned such a tie-up is risky as Zodiac recovers from a nearly three-year cabin production crisis.

"To be taking on Zodiac, with its recent execution issues, is arguably doubling up on risk," Vertical Research Partners analyst Rob Stallard said in a note.

Earnings boosted shares in Moneysupermarket.com by 7.9pc to their highest level since May 2016 after the price comparison website reported better than expected fourth quarter and full year revenues.

Dutch-Belgian food retailer Ahold Delhaize also rose, up 5.9pc after posting strong fourth quarter sales figures.

Its strong gains helped Europe's STOXX Retail index rise 0.9pc, the biggest sectoral gainer on the day.

In Dublin, the Isdeq index was up 0.75pc at 6,590. In London, Royal Mail's results were badly received sending shares down 6pc, weighing on the blue chip FTSE 100 index, which dropped 0.5pc.

Analysts flagged further weakening in Royal Mail's UK letters business as a concern.

Traders said they welcomed that the ECB stuck to its super-easy policy as growth improved and viewed as a relief the fact that the bank did not discuss a tapering of its asset purchases. Draghi also played down a recent rise in eurozone inflation. Even so, European shares ended the day lower.

Irish Independent

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