Yahoo Finance Trending tickers: THG | Sega | Rovio | John Wood
A look at the stocks making headlines on Monday
THG Plc (THG.L)
Shares in THG soared nearly 40% in afternoon trade on Monday after the e-commerce group said it had received a takeover bid from Apollo.
The company, which owns websites Myprotein and Lookfantastic, did not disclose the terms of the offer.
THG said in a statement that Apollo must make its intentions clear by 15 May or walk away, according to the Financial Times.
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The retailer had previously been subject to takeover interest from other investors, including from Belerion Capital and King Street Capital Management.
Apollo’s bid for THG is the latest in a string of private equity groups seeking to take UK companies private.
Sega Sammy Holdings (6460.T)
Shares in Sega Sammy Holdings dropped on Monday following news that it is making an offer to acquire the maker of Angry Birds, Rovio Entertainment, for €706m (£625m, $775m), or €9.25 a share.
It represents a 19% premium to Friday’s closing share price of €7.775.
“Shares in the Japanese gaming giant behind Sonic the Hedgehog shed over 4% during the overnight session in Asia, with shares pricing in the premium offer made for Rovio,” Victoria Scholar, head of investment at Interactive Investor, said.
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Russ Mould, AJ Bell investment director, noted that although Sega struck gold with Sonic the Hedgehog, a shared fascination with animals doesn’t guarantee future success.
“Sega might be able to further milk Rovio’s existing intellectual property but very few titles can be regurgitated into successful new games and spin-off activities such as films and merchandise ad infinitum,” he said.
Rovio Entertainment Oyj (ROVIO.HE)
Meanwhile, shares in Rovio got a boost following the Sega acquisition news.
“In November, Israel’s Playtika (PLTK) made an offer for Rovio which was subsequently sweetened in January. However talks ended in March but there was speculation that another buyer could come to the table. M&A hopes have kept Rovio well supported in recent months with shares rallying by around 33% over the past six months to Friday’s close. Today’s announcement has lifted Rovio by a further 17.8%,” Scholar said.
However, while Angry Birds has been a success, Rovio has struggled to replicate this with another blockbuster franchise, raising concerns about how the company plans to grow moving forward.
“Plus, a disappointing share price performance last year attracted potential bidders, hoping to swoop up the company at a discounted valuation. Sega Sammy is hopeful of successful synergies thanks to its similarities in terms of target customers, style of games, and brands,” Scholar added.
John Wood Group (WG.L)
Shares in John Wood Group climbed 7.13% to 226.90 after the oil services expert indicated there could be merit in its latest takeover proposal from private equity firm Apollo. As a result it is opening up its books to the suitor so the latter can undertake proper due diligence.
Mould said: “Everything is up for sale at the right price and given the uncertain economic outlook it seems that boards are minded to support takeovers as long as shareholders are not being messed about by unrealistically low offers. That situation might be a lot different in a stronger economic environment.”
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John Wood Group had previously rejected four offers from Apollo.
Scholar said the fifth proposal has been submitted at a final price of 240p per share in cash, valuing the engineering services company at £1.66bn.
“The deadline for a firm offer from Apollo has been extended from 19 April until 17 May. Speculation of a takeover has supported Wood’s shares this year, which are up over 49% to Friday’s close with shares up a further 7% today,” she added.
Watch: Sega to buy Angry Birds maker Rovio for $776m
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