Sierra Rutile Ltd (LON:SRX) shares boomed in the afternoon session after the minerals producer confirmed that its proposed takeover by Aussie-listed Iluka was back on.
Only last week, Iluka had threatened to walk away from the £215mln deal at the last minute, citing concerns with a couple of Sierra’s tailings dams.
But the two sides have now resolved the issues, and the merger is expected to become effective tomorrow (7 December) when Sierra Rutile’s shares will be de-listed from AIM.
Iluka is offering 36p for every SRX share so it’s no surprise that the price is hanging steady just below that at 35p – a 24% increase on where it began the day.
Package holiday specialist On The Beach Group (LON:OTB) was also sharply in the black today after a solid set of prelims excited investors.
On The Beach more than doubled its group operating for the year ended 30 September to £16.8mln, prompting its first dividend pay-out ever of 2.2p per share.
Despite the global uncertainty, the group added it is also confident of hitting expectations for the coming year.
11.15am...Drax shares power on after £340mln acquisition of Opus Energy
Shares in Drax Group (LON:DRX) continued to rise throughout Tuesday Morning after the power station company confirmed it will acquire business energy supplier Opus Energy.
The share price was up 18% to 328p as the London markets headed towards lunch.
The £340mln cash deal is subject to the European Commission approving the CfD Investment Contract awarded to Drax by the UK government – which the firm is confident will happen.
As it outlined in its interims back in July, Drax has been exploring options to “further improve earnings quality and deliver targeted long-term growth”.
Today’s purchase – which will be funded through a new £375mln debt facility – is an execution of that strategy.
Drax also announced an agreement to acquire four Open Cycle Gas Turbine (OCGT) development projects for electricity generation.
It said the initial purchase price for all four developments is £18.5mln, with the total consideration payable dependent on the clearing price in future capacity market auctions.
The company said the deals would allow it generate more “stronger, more predictable, long-term” financial performance.
The BMR Group PLC (LON:BMR) share priced also ticked higher after it updated investors on its Kabwe mine in Zambia.
BMR said the rise in the zinc and lead prices over the past twelve months have benefitted the economics of the project to the tune of more than US$500mln.
Recent estimates of the vanadium present in the tailings products have the potential to increase the total value of the assets due to be processed at Kabwe to around US$2bn.
BMR also added that the improved zinc price has also impacted favourably on its acquisition of Star Zinc – which it expects to complete in the near future.
Chief executive Alex Borelli said he thought “shareholders will be encouraged”, and he was right, with the share price zipping up more than 5% to 5.7p.
9.15am...Spread betting firms hit hard by FCA clampdown
A number of financial spread betting stocks plunged on Tuesday Morning on the news that the Financial Conduct Authority (FCA) is to impose tighter rules on the contracts for difference (CFD) market.
IG Group Holdings PLC (LON:IGG) and CMC Markets Plc (LON:CMC) were both down by around 25 in early deals, while Plus 500 Ltd (LON:PLUS) was the worst hit – down more than 30%.
The financial watchdog said it had identified a number of ‘serious concerns’ following a year-long consultation, while it also found that 83% of clients lost money when using CFDs.
It has unveiled a number of proposals which it hopes will “enhance consumer protection” by limiting the risks of CFD products and ensuring that customers are better informed.
A contract for difference is where you bet on the movement in an asset’s price without actually owning the underlying instrument, making money if the stock moves in the right direction and losing money if it goes the wrong way.
Shore Capital said that today’s news might “moderate the growth” of new clients in the coming months, while Numis added that the new proposals were “long overdue”.
LED lighting specialist Dialight Plc (LON:DIA) got off to strong start and was up 7% to 747p early on Tuesday.
It told investors that as a result of strong recent trading, it expects full year results to be materially ahead of expectations.
And wearable tech group CloudTag Inc (LON:CTAG) continued its recent surge and was up another 18% today.
The board was forced to address speculation on social media yesterday afternoon and confirmed that it expected to take delivery of the first batch of its health monitoring device later this month.