Three things you need to know as the UK financial markets open, from Tony Cross.
#1. Aviva’s approach for Direct Line confirmed – and rejected
After last night’s market close, it was confirmed that Aviva had made an unsolicited offer to buy Direct Line LON:DLG in a part cash, part shares offer. The approach was worth 250p per share, a 60% premium to the closing price on the 18th November, the day before media speculation first began to emerge. Direct Line management noted that the offer was highly opportunistic and undervalued the business, in turn rejecting the deal.
#2. Loungers set to fold to private equity bid
The all-day bar and dining operator Loungers LON:LGRS has this morning advised that it has reached terms with private equity operator Fortress to be bought out. An all cash offer of 310p per share has been tabled, equivalent to a 30% premium to last night’s closing price. This comes alongside today’s half year results where revenues added 19% and pre-tax profits jumped by just over 50% but management clearly believe that the price is right and Fortress’ experience in the sector can add further value.
#3. Headwinds persist at Dr Martens
Iconic shoemaker Dr Martens LON:DOCS issued a half year update today, with revenues off 18%, the interim dividend cut almost in half (as previously guided), a slight increase in the pre-tax loss and a 20bps erosion in gross margins. On a more positive note, direct to consumer sales continue to trend higher and management note that since the start of the Autumn/Winter season, trade has been encouraging even before the peak sales period arrives.
