MARKET REPORT: Rothschild taps market for £140m Turkish deal

There has been little for traders to cheer in the City so far this year, with a dearth of merger and acquisitions as well as fundraisings.

But one man bucking the trend is the adventurous businessman Nat Rothschild, who revealed he is tapping the market for cash in order fund a takeover at Volex.

Raising funds for expansion is what the stock market was created for, but in recent years it has been used to line the chief executive’s pockets and hand back mammoth share buybacks.

Under Rothschild, the power cord maker has gone from strength to strength, supplying Tesla, the largest producer of all-electric cars, and Volkswagen.

Volex is looking to buy Murat Ticaret, a Turkish manufacturer of complex wire harnesses, for £137million. 

Fundraising: Nat Rothschild (pictured) has revealed he is tapping the market for cash in order fund a takeover at Volex

The deal will be funded in part by the share sale that will seek to raise £55million. The rest will be paid from existing cash on the company’s balance sheet.

Volex will sell 21,818,181 new, ordinary shares through a placing and retail offer at 275p per share. 

Executive chairman Rothschild said: ‘We believe this transaction is truly transformational for Volex, further diversifying our end market and customer exposure.’

A trader added: ‘It’s good to see a chief executive being adventurous for once. So many are overly cautious, terrified of the current climate. This is what the market is for, raising cash and taking a risk.’

Alongside the share sale, Volex also posted a 17.6 per cent rise in revenues to £565million in the last half year and dished out a 8.3 per cent increase in the final dividend.

Shares, however, dipped 0.9 per cent, or 2.5p, to 283.5p. There was little to cheer for investors as the FTSE 100 fell 0.8 per cent, or 57.15 points, to 7502.03. 

The FTSE 250 slid 1.3 per cent, or 243.48 points, to 18327.97. The Bank of England’s decision to raise interest rates by 0.5 per cent to 5 per cent drove the grim session.

Stock Watch – Mulberry  

There were nerves in the City as Mulberry announced its full year results have been delayed by around a week.

The British luxury company insisted that the results for the year to the start of April were only delayed ‘to allow the company’s auditors some additional time to complete its procedures’.

Mulberry ‘emphasises that the revised announcement date has not arisen as a result of any concerns’.

But investors were not so sure and shares fell 1.2 per cent, or 3p, to 252p.

Financials were hit including the usually reliable 3i, which lost 2.6 per cent, or 50p, to 1907p.

The private equity firm invests in a string of companies across Europe, including Action, a Netherlands retailer.

But investors were turning to safe havens instead, snapping up drinks giant Diageo, up 0.8 per cent, or 25p, to 3330.5p, and gold miner Antofagasta which gained 1.2 per cent, or 17.5p, to 1493p.

Energy giants BP and Shell were having an equally difficult time, down 0.9 per cent, or 4p, to 460p and 1.3 per cent, or 30p, to 2333.5p respectively. 

The falls were not helped by the Church of England, which is selling its investments in the oil giants. 

The church said it had taken the decision to sell down its holdings by the end of the year ‘after concluding that none are aligned with the goals of the Paris Climate Agreement, as assessed by the Transition Pathway Initiative’. 

Not even Premier Inn owner Whitbread could muster gains despite seeing hotel room bookings soar over the first quarter, particularly in London, where tourists flocked to see the King’s coronation. 

But shares fell as investors worried further inflation fears would soon bite. Shares slipped 1.1 per cent, or 37p, to 3355p.

GlaxoSmithKline’s vaccine trials for RSV, a contagious respiratory disease, proved successful, showing long-term protection for adults over 65.

The pharmaceutical giant revealed results from a clinical trial, which included 25,000 people. 

It found a single dose of the shot, called Arexvy, proved to be 67.2 per cent effective in preventing RSV-lower respiratory tract disease. 

RSV affects the lungs, usually causing cold-like symptoms and in bad cases pneumonia.

According to the pharmaceutical giant, every year in the US, RSV causes 117,000 hospitalisations and 14,000 deaths of those aged 65 and over. Shares fell 0.9 per cent, or 12.8p, to 1359p.