Shares Spread Betting: Invensys Surges on Surprise Sale of Rail Signalling Business
Equities have had their morning coffee today and the FTSE is on a charge, adding nearly 50 points to reach 5850 and three-week highs.
Having added 27% yesterday, they trade 12% better today. The prospect of a 76p return to shareholders has enticed buyers and caused a flurry of broker revisions this morning.
Conspiracy theories are out in force, as the value of the deal is roughly the same as Invensys’ market cap.
Are Siemens paying too much? Does this leave the potential for counter bids, as a portion of the Invensys business is seemingly available as a standalone entity?
We had seen them come under scrutiny as a target earlier in 2012, and paying nearly the full price of the firm for around a third of its business has taken the City by surprise.
The feeling seems to be that ‘the sum of the parts is worth more than the whole’, and this could leave the company vulnerable in the coming months.
US markets enjoyed a politically-induced rally as the Speaker of the House spoke optimistically of progress towards a fiscal cliff resolution, after talks with business leaders appeared to be fruitful.
Today’s talks keep the issue centre stage, but risk assets are trading in ‘solution mode’.
Currently we see another 65 points to go on top of yesterday’s 107-point Dow rally, with an opening call of 13,050.
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Financial Market Comments from Will Hedden, Sales Trader, IG Index.
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