Meggitt receives fresh takeover approach from TransDigm
US bidder would offer more than Parker Hannifin has agreed to pay
Aerospace and defence group Meggitt has become the latest UK listed company to become the subject of a bidding war, after it received a takeover approach from US competitor TransDigm.
The UK company had already agreed a deal with Parker Hannifin, another US-based defence group.
The FTSE 250 company said on Wednesday that Cleveland-based TransDigm had suggested a possible cash offer of 900p per share, which would trump its rival’s proposal by 100p and would be almost double the company’s undisturbed share price.
The proposed takeover of the British defence company by Parker has come under scrutiny from the UK government, despite a list of commitments set out by the buyer to protect jobs, R&D and investment in the country.
The directors of Meggitt said they would continue to recommend the offer by Parker and it expects to send documents to shareholders on Monday next week.
Meggitt’s board added that it would assess Transdigm’s commitments to the government and staff against those made by Parker.
TransDigm, a large aircraft parts supplier, is listed in New York but describes itself as having a “private equity-like capital structure and culture”. No firm offer by the company has yet been made.
The company has a presence in the UK and existing relationship with the UK government, adding Marlow-based Cobham Aero Connectivity to its footprint earlier this year.
TransDigm did not immediately respond to a request for comment.
Thyssenkrupp says no to steel spin-off until spring
German conglomerate has been exploring an independent listing for division that employs 26,000 people
Electric vehicle sales surge in China as Tesla demand tumbles
US group suffers sharp fall in cars sold in country after series of scandals
Electric vehicle sales in China surged in July as drivers flocked to local auto brands in the world’s largest car market, while those of Tesla plunged after the US group was swept up in a string of scandals in the country.
Wholesale deliveries of new energy vehicles — including battery-powered, plug-in hybrid and hydrogen fuel-cell cars — jumped 164 per cent year on year last month to 271,000 units, the China Association of Automobile Manufacturers (CAAM) said on Wednesday.
The latest rise meant that electric cars took up 10 per cent of total auto sales in China from January to July. Total wholesale auto deliveries in July fell 12 per cent year on year to 1.9m units, CAAM reported.
But EV market leader Tesla sold only 8,621 cars in China last month, according to data from the China Passenger Car Association (CPCA) released on Tuesday. That was a 69 per cent drop month on month and a 26 per cent fall year on year, marking the first annual decline since Tesla opened its Gigafactory in Shanghai in January 2020.
The slowdown for the company, whose Model 3 sedan was China’s best-selling electric car last year, suggested “pretty anaemic” demand, said Tu Le, founder of Sino Auto Insights, a Beijing-based consultancy.
During the month, Tesla also exported 24,347 China-made cars to Europe.
In recent months, Tesla has been hit by scandals and negative press in China ranging from customer accusations of quality problems to government concerns that the vehicles’ on-board cameras might threaten data privacy and national security.
Chinese electric carmakers and established global auto brands have intensified their efforts to dethrone Tesla in China by launching dozens of new models in the country.
New energy vehicle sales from BYD, a Warren Buffett-backed automaker that was an early mover in China’s electric car market, more than tripled year on year in July to 50,492.
Chinese EV rivals XPeng and Li Auto reported record sales figures of 8,040 and 8,589 units, respectively, during July.
Cui Dongshu, head of the CPCA, said in an article published on Monday in the state-backed Securities Times that he expected NEVs to account for 13 per cent of total car sales in China this year.
The CPCA forecast in June that 2.5m electric cars would be sold in China this year, but Cui added that the estimate was likely to be revised upwards because of stronger than expected demand.
Gapping down
In reaction to earnings/guidance:
- WW -23.7%, ONTF -20.9%, EPAY -11.1%, PRGO -9.5%, WIX -9.4%, NARI -7.6%, POSH -7.2%, GO -5.4%, BLI -4.1%, LUV -2.4%, PLBY -1.7%, ATC -1.3%, GOOS -1.1%
Other news:
- GTES -6.1% (stock offering)
- FGEN -2.3% (FDA has issued a complete response letter regarding the New Drug Application for roxadustat for the treatment of anemia of chronic kidney disease)
- HCAT -0.8% (prices offering of 4,245,283 shares of common stock at $53.00 per share)
- APAM -0.6% (reports July AUM)
- MRKR -0.5% (files for $300 mln mixed securities shelf offering)
Analyst comments:
- ARCT -5.9% (downgraded to Sell from Neutral at Goldman)
- BHLB -1.9% (downgraded to Neutral from Overweight at Piper Sandler)
- DRNA -1.7% (downgraded to Neutral from Buy at Goldman)
- CHMI -1.1% (downgraded to Mkt Perform from Mkt Outperform at JMP Securities)
Gapping up
In reaction to earnings/guidance:
- UPST +20.9%, LPRO +16.1%, FUBO +13.5%, NVEE +8.9%, MRVI +7.9%, TDUP +7.3%, PUBM +7.1%, SKIN +6.7%, JAMF +5%, TASK +4.8%, DOCS +4.6%, RPRX +4.3%, WEN +3.9%, MCFE +3.7%, COIN +2.7%, SHCR +2.7%, TBLA +2.6%, THRY +2%, FLYW +1.9%, DAR +1.7%, OLO +1.6% (also to team up with GRUB to integrate digital orders), U +1.2% (also to acquire Parsec for $320 mln in cash)
Other news:
- FULC +11.3% (stock offering)
- BCRX +9.7% (withdraws its proposed public offering)
- CRNX +8% (stock offering by selling shareholders; also files for mixed securities shelf offering)
- AKUS +7.8% (announces European Commission designation of AK-OTOF for the treatment of otoferlin gene-mediated hearing loss as an Orphan Drug)
- EYES +4.5% (announces a new NIH grant supplement for its Orion study)
- AGFY +4.4% (announces second TTK partnership with True House Cannabis)
- NLOK +3.5% (to acquire Avast)
- CHPT +1.7% (Humacyte announces that laboratory and preclinical data demonstrating the potential to engineer a biovascular pancreas as a method to transplant pancreatic islet cells for the long-term treatment of type 1 diabetes have been published in the Journal of Tissue Engineering)
- RIOT +1.5% (provides July production and operations updates)
- MESA +1.4% (reports July block hours increased 92.1% yr/yr)
Analyst comments:
- DHT +3.1% (upgraded to Buy from Hold at Stifel; upgraded to Buy from Neutral at H.C. Wainwright)
- BBWI +1.2% (upgraded to Outperform from Neutral at Robert W. Baird)
Early premarket gappers
- Gapping up:
- UPST +21.5%, LPRO +18.2%, FUBO +10.7%, BCRX +9.2%, NVEE +8.9%, TASK +8.5%, CRNX +8%, TDUP +7.3%, SKIN +6.6%, MRVI +6.5%, PUBM +6.2%, JAMF +5%, MCFE +4%, DOCS +3%, COIN +2.5%, EYES +2.4%, SGFY +1.9%, DAR +1.7%, NLOK +1.4%, RIOT +1.2%, LRN +1%
- Gapping down:
- WW -27.2%, ONTF -17.4%, EPAY -11.1%, WIX -7.9%, POSH -7.5%, GTES -6.5%, NARI -5%, GO -3%, BRSP -1.2%, FULC -1.1%, REGN -0.8%, HCAT -0.8%, APAM -0.6%, SMCI -0.5%
>>> Up
* IAG Raised to Buy at Liberum; PT 215 pence (+)
* ING Raised to Reduce at AlphaValue/Baader
* MTU Aero Raised to Overweight at Barclays; PT 241 euros
* Sixt PT Raised to 150 euros from 130 euros at Hauck & Aufhaeuser (+)
* Wallenius Wilhelmsen Raised to Buy at Pareto Securities (+)
>>> Down
* Coloplast Cut to Hold at Kepler Cheuvreux; PT 1,144 kroner (+)
* JDE PEET'S CUT TO HOLD VS BUY AT BERENBERG, PT EU32
* Technotrans Cut to Hold at M.M. Warburg (+)
* Virgin Galactic Cut to Underweight at Morgan Stanley; PT $25
>>> Initiation
* Corp Acciona Energias Renovables Rated New Buy at Stifel
* M&G Cut to Hold at Berenberg; PT 250 pence
* Strix Rated New Buy at Liberum; PT 460 pence
* Wise Rated New Underperform at Autonomous Research; PT 700 pence (+)
>>> Call
* Ahold’s Strong Results Led by U.S. Consumer Strength: Jefferies (+)
*Daetwyler’s Strong 1H Tops Sales, Earnings Expectations: ZKB (+)
* Duerr Upgraded at Berenberg on Homag’s Positive Momentum
* JDE Peet’s Cut to Hold on Commodity Price Pressures: Berenberg
* Lanxess Results, Guidance Uplift Underpin Positive View: Baader (+)
* NortonLifeLock-Avast Deal Should Help Drive Revenue Growth: RBC
* Uniper’s 2Q Weakness Expected and Temporary, Commerzbank Says (+)
* Vestas Misses Ests. as Turbine Costs ‘Rocketed:’ Handelsbanken (+)
Deliveroo orders double in first results since IPO
Food delivery group narrows six-month pre-tax loss as sales pick up 82%
Deliveroo narrowed its pre-tax losses by almost a fifth to £104.8m in the first half, as revenue rose 82 per cent to £922.5m and orders doubled, the food delivery company said in its first results since March’s initial public offering.
The London-based company delivered 148.8m meals and groceries in the first six months of 2021, twice as many orders as in the same period a year ago. Monthly active consumers increased 81 per cent year on year to 7.8m people.
While food delivery services have been a big beneficiary of pandemic lockdowns, Deliveroo said it had seen “no material impact” from the UK lifting most of its Covid-19 restrictions. Gross transaction value, which is a measure of the total value of goods ordered including fees, in its largest market rose 110 per cent compared with the first half of last year. Its UK expansion is “well ahead” of its target and its services can now reach 72 per cent of the population.
Gross profit margin improved by 100 basis points to 7.8 per cent.
Ahead of the figures, shares in Deliveroo had risen around 12 per cent this week to 363p, after German rival Delivery Hero disclosed a 5 per cent stake on Monday. However, Deliveroo has yet to return to the 390p price at which it initially went public, after falling by more than a quarter on its first day of trading.
“We are seeing strong growth and engagement across our marketplace as lockdowns continue to ease. Demand has been high amongst consumers,” said Will Shu, chief executive and co-founder of Deliveroo. “We have widened our consumer base, seen people continuing to order frequently and we now work with more food merchants than any other platform in the UK.”
Deliveroo upgraded its growth outlook last month but Shu reiterated that the company expects “consumer behaviour may moderate later in the year”.