By Barbara Kollmeyer
Deal news put the London property sector in the spotlight on Friday, with shares of Urban & Civic soaring on a buyout offer, while insurers rose after acquisition news for insurer RSA .
Shares of property group Urban & Civic /zigman2/quotes/208772039/delayed UK:UANC -0.43% soared 64% after the company announced it had agreed to a £506 million ($664 million) buyout offer by charitable foundation, the Wellcome Trust. The offer represents at 63% premium over Urban & Civic’s closing price on Thursday, noted Kieran Lee, an analyst at Berenberg, in an email comment.
“While this bid offers significant immediate upside to the prevailing share price we forecast a material ramp-up in the performance of Urban & Civic over coming years,” partly as strategic land sites shift from infrastructure investment to cash realization and further plans are added, said Lee.
“As such we would envisage materially higher upside for investors able to take a long-term view,” he said.
Elsewhere, in the real-estate sector, shares of Persimmon /zigman2/quotes/206444744/delayed UK:PSN +0.75% rose 1% and those of Bellway /zigman2/quotes/208360300/delayed UK:BWY -0.58% rose 0.8%, though some names were lower, such as British Land /zigman2/quotes/210491538/delayed UK:BLND -1.16% whose shares fell 2.9%.
“The Wellcome Trust’s bid for Urban & Civic had positive read-across to real-estate stocks, making investors sit up and question if there was underappreciated value elsewhere in the sector,” Russ Mould, investment director at AJ Bell, told clients in a note.
Elsewhere, deal news was not boosting shares of insurer RSA /zigman2/quotes/207445981/delayed UK:RSA -0.12% , which received a £7.2 billion ($9.2 billion) joint bid from two overseas rivals — Canada’s Intact Financial /zigman2/quotes/207409220/delayed CA:IFC +0.71% and Denmark’s Tryg TRYG /zigman2/quotes/204234534/delayed DK:TRYG +0.40% . RSA shares fell as investors took the view a better deal might be possible.
But the sector overall appeared to benefit, with Aviva /zigman2/quotes/210517151/delayed UK:AV -0.57% and Legal & General /zigman2/quotes/201125471/delayed UK:LGEN -2.50% shares up 2.8% and 0.7%, respectively.
The FTSE 100 index /zigman2/quotes/210598409/delayed UK:UKX -0.97% bucked an overall weaker trend across Europe, and gained 0.4% to 5,934.45. It was poised for a 6.4% gain for the week, which would represent the best such return since the week ending June 5.
Mining stocks provided the best support for the index on Friday, with Anglo American /zigman2/quotes/201381512/delayed UK:AAL -5.31% shares up 3%.