Budget airline Flybe has soared higher after more than a month in the doldrums. Reports that British Airways owner IAG might join Virgin Atlantic in bidding for the troubled business gave shares a lift. After climbing 71.3 per cent on Friday when it confirmed it was in talks with Virgin, Flybe shot up another 33.5
Budget airline Flybe has soared higher after more than a month in the doldrums.
Reports that British Airways owner IAG might join Virgin Atlantic in bidding for the troubled business gave shares a lift.
After climbing 71.3 per cent on Friday when it confirmed it was in talks with Virgin, Flybe shot up another 33.5 per cent, or 5.55p, to 22.1p as weekend reports cited industry sources saying IAG may make an offer. IAG and Flybe declined to comment.
Flybe put itself up for sale earlier this month, just weeks after a profit warning wiped £29m off its market value. The company told investors that full-year losses were expected to reach £22m, far higher than analysts had predicted.
A bidding war for Flybe would reignite old tensions between Virgin Atlantic’s Sir Richard Branson and IAG’s boss Willie Walsh.
The two business titans have previously traded verbal blows, with Walsh placing a bet back in 2012 that Virgin would not exist in five years.
When that period came to an end last year, Branson called on Walsh to pay £1m to Virgin’s crew.
Southend Airport’s owner Stobart Group (up 1.5 per cent, or 3p, to 202p) is also rumoured to be considering a bid, potentially with the help of a private equity firm. Easyjet (up 2.6 per cent, or 31p, to 1238p)has ruled itself out.
The FTSE 100 edged up 1.2 per cent, or 83.1 points, to 7036 after Theresa May’s Brexit deal was approved by the rest of the EU.
The agreement helped lift shares in companies which generate most of their earnings in the UK, as a deal for leaving the EU would put the UK’s economy on firmer footing. But Russ Mould, investment director at AJ Bell, said the rise was not large enough to suggest that investors are now hungry for UK stocks after a long downbeat period.
He added: ‘The fact that EU leaders have agreed the UK’s exit deal ultimately isn’t enough to convince the market that Brexit will be conducted smoothly.
‘Getting the deal approved by Parliament is the real hard task, so UK equities are likely to remain volatile until the vote in mid-December.’
On the FTSE 250, Premier Oil was the largest riser as the price of oil edged up slightly and investors grew hopeful that it may become a bid target. Shares climbed 11.2 per cent, or 7.3p, to 72.1p.
Clydesdale and Yorkshire Bank owner CYBG rose 10.5 per cent, or 20.3p, to 213p as it recovered from a slump last week.
The banking group’s shares had plummeted 16.9 per cent on Tuesday as it revealed it had taken a bigger hit than expected from mis-sold payment protection insurance.
Telecoms company TalkTalk edged up as its executive chairman, Sir Charles Dunstone, bought 379,593 shares in the company for 117.4p each.
The businessman, who is also raking in cash from US burger chain Five Guys, which he brought to the UK, now owns a 28.6 per cent stake in Talk Talk, worth £397m at yesterday’s closing price, which had risen 2.5 per cent, or 3p, to 121.1p.
On London’s junior market AIM, confectionery company Cake Box crept up 2.6 per cent, or 4.5p, to 180.5p on the back of its first half-year results as a listed company.
The cake-making franchise, which charges bakeries to use its name and product know-how, saw revenue jump 44 per cent to £8.3m for the six months ending in September. Pre-tax profits, disregarding the costs of its stock market float in June, jumped 34 per cent to £2m.
Pharmaceuticals company Vectura, on the other hand, dropped 10.2 per cent, or 7.95p, to 69.65p as its treatment for severe asthma failed a late-stage test. The firm said it would write-down the value of the treatment to zero, which will hit full-year profits by £40m.