One of the doyens of the City put his hand in his pocket yesterday to buy shares in the world’s biggest private jet servicing business, which he chairs, dampening takeover chatter in the process.
Shares in BBA Aviation rose after reports on a financial blog that PSP Investments, a Canadian pension fund manager, was considering an approach. No announcement was made to the stock market about the speculation, but by midday BBA had issued a filing declaring that Sir Nigel Rudd, the chairman whose portfolio also includes a non-executive role at Meggitt, had bought 1,750 shares and his wife 10,000 shares.
Traders chattered that the share purchase indicated that BBA was not aware of any interest from potential suitors. A spokesman for the company, which supports the business and general aviation market, said rather dryly that it did not comment on market rumour and speculation.
The share purchase also came after the expiry of a period preventing directors from buying shares. In the previous session BBA published full-year results, with pre-tax profits down 37 per cent to $95.3 million on group revenues 7 per cent lower at $2.13 billion, which Liberum, a seller, had said were in line with the market’s forecasts but “masked sharply divergent performances at the divisional level”.
Investec was more bullish yesterday reiterating its “buy” rating and raising its target price to 235p, from 225p. The broker was optimistic about BBA’s revenue synergy opportunities at Signature, which offers services such as refuelling and hangar and office rentals, after the $2 billion acquisition of Landmark, an American rival, last year from Carlyle, the private equity firm.
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All of which meant that shares in BBA outperformed the market, rising 15½p to 207¾p. Nonetheless, the FTSE 100 closed up 68.97 points, or 1.13 per cent, at 6,199.43, within about 50 points of where it ended last year, lifted by rallying mining stocks, which hit a four-month high. Indeed, with copper prices touching their highest in almost four months and oil prices stabilising above $38 a barrel in London, miners dominated the leaderboard. Anglo American jumped 59p to 592p, Glencore 17p to 160p, Rio Tinto 118p to £21.30 and BHP Billiton 72½p to 867¾p. The industry has vowed to slash costs and debt. Raising the target prices of BHP to 739p from 591p and Rio to £22.35 from £18.59, Investec said that recent cuts to the progressive dividends and spending and cost-cuts had “significantly improved financial positions”.
Better American jobs figures than forecast gave the Footsie a kick later on as investors overlooked concerns about a stronger US economy hastening the next rise in US interest rates.
Back with aviation, easyJet rose 67p to £15.52 as the airline announced a 9.8 per cent rise in passenger numbers last month.
Weighing on the FTSE 100 were housebuilders, which, after stellar share price growth, have been cooling this year amid uncertainty about the impact of Brexit (should it happen) on the housing market, particularly in London.
Berkeley Group, the upmarket builder targeted by short-sellers, led the industry lower, closing down 70p at £30.10. Barratt Developments fell 9½p to 554½p.
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The biggest fallers were hit after brokers cut forecasts in the wake of results in the previous session. Schroders slipped 114p to £26.24 after Citi downgraded to “neutral”, which it said was based on challenging markets and not a recent boardroom shake-up . Travis Perkins tumbled 66p to £17.83 after Stifel cut its target to £22.22 from £22.80. However, it remained a buyer, telling clients there was plenty of room for improvement.
Shares in Just Eat closed 18¼p up above 424p in the mid-cap index, despite it emerging shortly before the close that David Buttress, the chief executive, and Mike Wroe, the finance boss, had sold a large part of their holdings in the takeaway company for about £19 million.
Away from the main market, Petroceltic rose ¾p to 7½p as Skye Investments, the vehicle of Robert Adair and the Irish explorer’s second-biggest shareholder, came out against a 3p-a-share offer from Worldview, the activist Swiss hedge fund and its biggest shareholder.Stanley Gibbons, the stamp dealer, whose shares slid by a third last month after a profit warning, fell 3½p to 37½p despite saying that it was encouraged by shareholders’ interest in a planned fundraising.
Wall Street report
The Dow Jones industrial average broke the 17,000-point barrier thanks to a vibrantly upbeat jobs report, a rise in oil prices and hopes of an imminent rise in interest rates. At midday the Dow stood at 17,021.73 points, up 77.83.
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