MARKET REPORT: Aviva Shares Surge as Takeover Speculation Mounts
Aviva, the renowned UK household name, has found itself at the center of takeover rumors, causing its shares to soar. Reports suggest that three overseas bidders, including Germany’s Allianz, Canada’s Intact Financial Corporation, and the Scandinavian group Tryg, are considering making an offer. Speculation in the City continues to grow, with some believing that Aviva could be the next takeover target in the FTSE 100.
Investment director Russ Mould of AJ Bell stated, “Aviva is one of many stocks on the UK market that appear undervalued but have the potential for long-term value generation. As the company has focused its efforts and undergone a turnaround program, it has become a stronger business, making it an attractive prospect for potential suitors.”
Earlier this week, Aviva garnered confidence from the City after Jefferies raised its rating to ‘buy’ and increased the target price. This positive sentiment has filtered through the market, with other insurance peers such as Legal & General, Prudential, Beazley, and Phoenix experiencing gains. The FTSE 100 rose 0.6%, while the FTSE 250 gained 0.8%.
Despite a turbulent week, oil prices stabilized, and this possibility of lower fuel costs had positive implications for airline stocks. Easyjet, IAG, and Wizz Air all saw increases. Furthermore, Shell saw gains after reporting improved third-quarter trading conditions for its gas business.
De La Rue, the banknote printer, also provided a boost for investors by raising its profit forecast for the six-month period ending in September. However, SRT Marine Systems and Petra Diamonds experienced losses due to various factors affecting their respective industries.
The telecommunications sector faced challenges as well, with Spirent Communications falling after issuing a profit warning and stating that its largest customers were reducing spending. Deutsche Bank Research subsequently reduced its target price for the company.
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