Investors today switched on to TV set-top boxes maker Pace’s £1.4 billion acquisition by US rival Arris, sending its shares rocketing to the top of the FTSE 250 mid-cap index.
Pace’s chairman Allan Leighton, the former Royal Mail and Asda boss who has taken on the chairmanship of the Co-op, presented the deal to shareholders at its annual meeting today, saying it “will create a platform for future growth above and beyond our standalone potential”.
Numis agreed, concluding that the commercial and financial rationale of the stock and cash offer makes good sense. It upgraded the stock to hold from sell and upped its price target to 443p.
Pace also released a first-quarter trading update that showed year-on-year growth in revenue and gross margins. Its shares jumped 106.3p to 438.15p.
On the FTSE 100, uncertainty over a deal between Greece and its creditors kept the index almost flat, after European Commission vice president Valdis Dombrovskis said an agreement was unlikely to be reached until May.
The blue-chip index edged up 9.3 points to 7037.54.
Utilities crowded out the top of the footsie leaderboard after Citi re-evaluated the sector.
The top two spots were taken by United Utilities Group and Severn Trent, which jumped 24p and 36p to 997.50p and 2187p, after the investment bank upgraded their target prices.
Back on the FTSE 250, engine-maker Senior was the biggest faller. The move came after the firm said a metal waste division had been hit by lower aluminium prices and reported a slowdown in the building of Airbus A330s.
The company maintained its full-year profit guidance but said its performance would be more heavily weighted towards the second half than usual. Senior slipped 20p to 325.20p.
AIM-listed Sweett Group jumped 1p to 23.5p after it revealed it had passed the findings of an internal investigation into allegations of impropriety by one of its former employees to the Serious Fraud Office.
It said its full-year results will include a £1.6 million charge relating to the probe.
The infrastructure and professional services provider also reported trading for the year to March 31 was in line with expectations and said a strategic review of its operations was complete.
