MARKET REPORT: Johnson Matthey shares jump on takeover talk

Johnson Matthey stormed to the top of the FTSE 100 leaderboard amid takeover speculation after an industrials investor doubled its stake.

The chemicals giant, which will be booted out of the blue-chip index later this month, soared 9.9 per cent, or 160.5p, to 1790.5p yesterday as Standard Latitude Master Fund increased its holding from 5.2 per cent to 10.1 per cent, according to a stock market filing.

The move means New York-based Standard Industries is now the largest shareholder in the London-listed firm.

It first bought into Johnson Matthey in April last year.

Lacie Midgley, analyst at UK-based investment bank Panmure Gordon, said Standard Industries has a track record of active investment in the chemicals sector.

Takeover speculation: Johnson Matthey soared 9.9 per cent, or 160.5p, to 1790.5p

The firm bought WR Grace, a major process catalyst producer, for £5.6billion in July 2021.

Midgley added that Johnson Matthey could not be ruled out as a takeover target given the ‘current share price fundamentally undervalues the sum-of-the-parts’. Michael Hewson, chief market analyst at online trading firm CMC Markets UK, added that the move could also mean that ‘pressure will build for a partial break-up of the business’.

The London-listed firm earlier this year signed a three-year strategic partnership with the Norwegian hydrogen company Hystar.

The FTSE 100 rose 0.3 per cent, or 25.41 points, to 7464.54.

But the FTSE 250 slipped 0.4 per cent, or 68.8 points, to 18536.9.

Oil prices rose 1 per cent as Brent Crude edged above $87 a barrel.

The gains lifted BP 3 per cent, or 13.3p, to 500.8p and Shell added 1.4 per cent, or 33p, to 2444.5p. Dettol maker Reckitt Benckiser said Kris Licht will join as chief executive on October 1.

The consumer goods group – which also makes Durex and sore-throat-sweet Strepsils – announced Licht’s appointment at the end of April.

He has served as president of Reckitt’s health business, and will replace Nicandro Durante, who took over last October.

Shares rose 0.1 per cent, or 8p, to 5710p.

Frasers Group raised its stake in online retailer Boohoo for the second time this week.

Mike Ashley’s retail empire, which owns Sports Direct, Jack Wills and Flannels, increased its holding in the fashion brand from 9.1 per cent to 10.4 per cent.

That means Frasers is in control of more than a tenth of Boohoo and Currys (up 0.3 per cent, or 0.15p, to 50.2p) and almost a fifth of Asos (up 2.6 per cent, or 11.4p, to 449.8p).

Boohoo gained 6.1 per cent, or 2.16p, to 37.81p and Frasers Group added 0.2 per cent, or 1.5p, to 808p.

Johnson Service Group bought the largest healthcare linen supplier in Ireland for £27m (€31.5m).

The London-listed group said Celtic Linen, like many businesses within the textile services, was left reeling by the impact of Covid.

Shares yesterday gained 4.2 per cent, or 5p, to 123.8p.

Kinovo, a property services firm, dashed hopes over a possible takeover bid spearheaded by the owner of its top shareholder.

The group last month was approached by private equity firm Rx3, which counts the American comedian Kevin Hart and High School Musical actress Vanessa Hudgens among its advisors, with a 56p-per-share cash offer.

Rx3 is owned by Tim Scott, who holds a 30 per cent stake in Kinovo through his investment company Tipacs2.

But the AIM-listed group yesterday said if the offer was formally tabled then it would not recommend it to shareholders.

Rx3 has until September 21 to decide whether it wants to make an offer, or walk away.

Shares rose 6.1 per cent, or 3p, to 52p.