Johnson Matthey, the chemicals giant, surged to the top of the FTSE 100 leaderboard amidst takeover speculation following an increase in stake by industrials investor Standard Latitude Master Fund. The investor’s holding in Johnson Matthey has risen from 5.2% to 10.1%, making New York-based Standard Industries the largest shareholder in the London-listed firm. This development comes as Johnson Matthey is set to be removed from the blue-chip index. The market reaction to the stake increase indicates the market’s belief that Johnson Matthey may become a takeover target. Lacie Midgley, an analyst at Panmure Gordon, highlights that Standard Industries has a history of active investment in the chemicals sector.
Takeover speculation: Johnson Matthey soared 9.9 per cent, or 160.5p, to 1790.5p
This move follows Standard Industries’ purchase of WR Grace, a major process catalyst producer, for £5.6 billion in July 2021. Considering the current undervaluation of Johnson Matthey’s share price, Lacie Midgley suggests the company could be an enticing takeover target. There is also speculation that this increased stake could lead to pressure for a partial break-up of Johnson Matthey’s business. It is worth noting that earlier this year, the London-listed firm signed a three-year strategic partnership with Norwegian hydrogen company Hystar.
In other market news, the FTSE 100 saw a 0.3% rise, reaching 7464.54 points, while the FTSE 250 slipped by 0.4% to 18536.9 points. Oil prices also witnessed a 1% increase, with Brent Crude surpassing $87 a barrel. As a result, BP’s shares rose 3% and Shell’s shares increased by 1.4%. Reckitt Benckiser, the consumer goods group, announced that Kris Licht will assume the position of chief executive on October 1. Meanwhile, Frasers Group raised its stake in online retailer Boohoo for the second time this week.
Johnson Service Group purchased the largest healthcare linen supplier in Ireland, Celtic Linen, for £27m (€31.5m). The impact of Covid-19 negatively affected Celtic Linen, as it did many textile services businesses. Finally, Kinovo, a property services firm, rejected a takeover bid from private equity firm Rx3, which was led by comedian Kevin Hart and actress Vanessa Hudgens. If the offer is made, Kinovo will not recommend it to shareholders. Rx3 has until September 21 to make a decision.
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