MARKET REPORT: Mondi eyes rival DS Smith as takeover talk grips City

Two of the biggest paper and packaging firms listed in London are the latest to be swept up by takeover fever.

Just a day after housebuilders Barratt Developments and Redrow outlined plans to merge, FTSE 100 group DS Smith revealed it ‘received a highly preliminary expression of interest’ from blue-chip rival Mondi though no proposal has been made.

Mondi is weighing up an offer and must declare if it wants to proceed by March 7.

Shares in DS Smith soared 9.8 per cent, or 27.5p, to 308.6p, valuing the business at around £4.27billion. Mondi, worth about £5.9billion, fell 3.3 per cent, or 45p, to 1336p.

DS Smith has been listed since 1986 and makes products such as trays to carry cans and bottles, and packaging for food. 

Takeover fever: FTSE 100 group DS Smith revealed it ‘received a highly preliminary expression of interest’ from blue-chip rival Mondi though no proposal has been made

Mondi has 22,000 staff in more than 30 countries. It makes wooden containers, printing paper and boxes to store fruit and vegetables.

On the wider market, the FTSE 100 fell 0.4 per cent, or 33.27 points, to 7595.48 while the FTSE 250 inched down 1.81 points, to 19,102.72.

The Competition and Markets Authority is opening an investigation into Aviva, which agreed to buy the UK life insurance business of AIG last year for £460million.

The watchdog is concerned about ‘a substantial lessening of competition’. Aviva dipped 1 per cent, or 4.2p, to 420.7p.

On Britain’s High Street, Primark pledged to invest more than £100million in stores this year, and will open three sites. Shares in its owner Associated British Foods rose 0.3 per cent, or 6p, to 2247p.

Rolex seller Watches of Switzerland reported a 3 per cent slide in third-quarter revenues to £397million. Sales in the US rose 3 per cent but in the UK and Europe they were down 7 per cent. It fell 2.5 per cent, or 9.4p, to 372.4p.

Stock Watch – Sanderson Design 

luxury interior group Sanderson Design tumbled 13pc, or 16.5p, to 110p following a poor performance in the UK.

Sales fell 3.1pc to £108.5m in the year to the end of January while profits of £12m were slightly lower than the year before. Business was tough in the UK, its largest market, as revenue fell 11pc to £37.9m.

It warned trading is set to remain ‘challenging’ in the UK and Europe amid a ‘subdued consumer backdrop’, and expects similar revenues and profits for the next year.

Digital 9 Infrastructure – down 23.7 per cent, or 5.5p, to 17.7p – suffered a setback after the data centre and wireless network investor said the sale of its prized asset will be investigated by the Icelandic anti-trust authority.

The group agreed to offload Verne Global to Ardian France SA for around £465million in November. 

It expected the deal to be approved by the end of March but it could be cleared later than hoped.

Revenues at Compass, the world’s largest catering company, rose by 11.7 per cent in the three months to the end of December, as it maintained its forecast for the financial year.

It spent £280million in the period buying companies and last month agreed to snap up CH&CO in the UK for £477million. Shares lifted 2.8 per cent, or 61p, to 2211p.

Mining giant Anglo American reported a positive fourth quarter following strong copper production in Peru and record iron ore output in Brazil. Shares slid 0.9 per cent, or 15p, to 1739.6p.

Advertising giant WPP rose 0.2 per cent, or 1.6p, to 783.4p after it bought a minority stake in a new German agency OH-SO Digital.

Cosmetics firm Revolution Beauty wants to make £1billion of sales by 2030 and save £10million over the next three years but warned its revenues are likely to increase less than expected for the year to the end of February.

The shares dropped 8.9 per cent, or 2.85p, to 29.15p.

And technology company Nanoco – up 1.6 per cent, or 0.32p, to 20.18p – was paid the final proceeds from its £124million settlement with Samsung after it alleged patent infringement, claiming the South Korean tech giant used its ‘quantum dot’ technology without permission in televisions.

Nanoco yesterday said it was paid £58.8million in the second instalment and will return between £33million and £40million to shareholders and use some money to invest in commercial opportunity and expand R&D.

This post first appeared on Dailymail.co.uk