Market report: City chatter says Smiths is mulling bid for US firm Accelerate Diagnostics

Industrial technology firm Smiths Group has spent most of the past year offloading different businesses but the rumour doing the rounds in the City today was it could soon change tack.

On a quiet Friday, the hearsay was that the FTSE 100 company has its eye on Accelerate Diagnostics, a little-known US medical technology firm worth $1.3 billion (£1 billion) on Nasdaq.

The Arizona-based company is working towards commercialising technology which helps to diagnose infectious diseases sooner. Its shares rose 5% yesterday against a falling market with trading volumes much higher than normal.

Although Smiths’ name is in the frame for a potential tilt, larger US groups have a head-start on it, sources said.

Frontrunners for Accelerate are said to be Thermo Fisher Scientific and Boston Scientific — both are much larger and have far more firepower than Smiths, whose operations range from energy services to specialist medical devices. It has sold several non-core business over the past year to buoy the balance sheet.

After recent falls, Accelerate’s shares are now changing hands for only $23 a pop. Gossips said Accelerate and its directors, who control a large chunk of the company, would hold out for at least $35 a share.

Smiths and Accelerate said they do not comment on speculation.

Shares in Smiths were down 10.15p to 1553p, tracking UK stocks lower as investors digested the Barcelona terror attack and the increasingly chaotic nature of Donald Trump’s presidency.

Travel stocks bore the brunt of the sell-off as the FTSE 100 fell 63.45 points, or 0.9%, to 7324.42.

Airlines which fly to Barcelona were all lower. British Airways and Iberia owner IAG dropped 14.82p, or 2.4%, to 609.62p and easyJet fell 26.93p, or 2.1%, to 1274p.

Equipment hire group Ashtead, the proxy play on Trump given its exposure to the US infrastructure spending, slipped 30p, or 1.9%, to 1550p. Hopes are fading that the US president will fulfil his promises to spend $1 trillion on upgrading the transport network.

Pershing Square, the US hedge fund run by Bill Ackman which floated shares in London in May, sank 25.26p to 1081.74p after a poor first-half performance.

The fund has declined 1.7% so far this year, with losses including its bet against Herbalife, the nutrition drinks company Ackman has accused of being a pyramid scheme.

Insulation firm SIG fell 3.45p, or 1.9%, to 175p after Liberum said the recent surge, spurred on by the hiring of Meinie Oldersma as its new chief executive, was “too far, too soon”.

On AIM, Joules was off 11.12p at 303.35p after the posh wellies maker gifted options over shares worth £1.5 million to founder Tom Joule, chief executive Colin Porter, finance chief Marc Dench.

Doorstep lender Morses Club was unchanged at 117.5p as it unveiled a £15 million loan, which it said provides “the certainty of long-term funding”. It comes amid concerns about rising consumer debts.