HomeFood and DrinksDiageo Sparks Excitement as Takeover Speculation Gains Momentum

Diageo Sparks Excitement as Takeover Speculation Gains Momentum

Drinks giant Diageo has become the latest household name to be labelled a takeover target.

The company behind the Guinness, Johnnie Walker and Smirnoff brands has suffered a torrid 12 months as sales slow.

Diageo, whose brands also include Captain Morgan and Baileys, issued a profit warning in November following problems at its Latin America and Caribbean arm.

And with shares at their lowest since October 2020, analysts believe it is a sitting duck.

Citi upgraded Diageo and said investors should buy the stock given it is undervalued. Shares rose 1.8 per cent, or 45p, to 2508.5p.

Deal talk: Guinness brewer Diageo has become the latest household name to be labelled a takeover target after suffering a torrid 12 months as sales slow

JD Sports fell 4 per cent, or 4.7p, to 112.9p after Barclays lowered its rating on the stock, fuelled by concerns over weak results from rival Nike.

British Airways owner IAG led the blue-chip index as investors remained optimistic that a bid to buy Air Europa will be cleared by the European Commission, which is probing the deal – amid growing consolidation in the industry, with Lufthansa winning approval to buy a 41 per cent stake in Italy’s ITA Airways for £275million.

IAG gained 5.5 per cent, or 9.05p, to 173.35p, helping lift main markets as the FTSE 100 rose 0.6 per cent, or 51.98 points, to 8173.18 and the FTSE 250 was up 1.1 per cent, or 222.69 points, to 20,417.16.

Consumer goods group Reckitt Benckiser has finished its £1billion share buyback but dipped 0.6 per cent, or 27p, to 4231p. 

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And clean energy firm Johnson Matthey launched the first half of its £250million share buyback programme, lifting it 3 per cent, or 47p, to 1625p.

Online advertising firm Baltic Classifieds added 4.4 per cent, or 10.5p, to 251.5p after revenues surged 19 per cent to £61million in the year to April 30 with profits up 32 per cent to £30million.

The company expects revenues to rise 15 per cent in 2025.

Topps Tiles reported a slump in sales as homeowners put off repairs and maintenance.

Revenues fell 6.9pc in the third quarter to June 29 and it dropped 2.7 per cent, or 1.1p, to 39.6p.

Drax hit its highest level since late May after analysts said the power firm should receive more biomass grants from a future UK government, sending it up 4.5 per cent, or 22.5p, to 522.5p Eneraqua Technologies, which advises clients how to be more energy efficient, warned it will be paid later than hoped as some customers have delayed spending decisions due to the election. 

Shares plunged 10 per cent, or 5p, to 45p.

Investors in Wood Group – down 2 per cent, or 4.1p, to 199.9p – must wait until the end of the month to find out whether the oil services engineer’s suitor has decided to make a formal offer or walk away.

In May, Dubai-based Sidara submitted its ‘fourth and final’ proposal of 230p or £1.59billion – and has been given an extra four weeks to finalise its bid.

AIM-listed Fintel, which provides services for the UK financial sector, bought its eighth business in a year after it snapped up Threesixty from fund manager Abrdn for £14.6million.

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Its shares climbed by 1.3 per cent, or 4p, to 310p.

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