Fri City brief: £25 a share Weir bid speculation grows
Shares in Weir Group rocketed as traders noted speculation that a US-based private equity consortium may be preparing a bid for the engineering firm. General Electric has also been mentioned as a bidder.
The shares rose 4.26% or 74p to close at 1,813p following a 2.8% gain yesterday. Reports suggest a bid in the region of 2,500p might be forthcoming as potential bidders take advantage of a recent slump in the price. The shares peaked last September at 2,848p.
Weir has risen strongly in recent years as it has confirmed its status in the pumps and valves market, but it was thwarted last May in its attempt to buy a Finnish company Metso for £3.7 billion. Shares in Weir at the time were trading at 2,600p.
The company warned last month that profits would be hit by the recent fall in the oil price and the fall in its shares meant it came close to be ejected from the FTSE100.
The index closed 0.71% or 49.31 pts lower at 6,911.80, following last night’s record close of 6,961.14 set and its intraday record high of 6,974.26 on Monday.
Over in the US, employers took on more employees in February and the jobless rate fell to a six-year low of 5.5%, which could put pressure on the Federal Reserve to raise interest rates in June.
David Lamb, senior dealer at the forex specialists, FEXCO, comments: “Goldilocks just got burned. For months US jobs growth has successfully walked a tightrope between too hot and too cold.
“But that cosy equilibrium has been upset by today’s scorching number. Such a blockbusting rate of job creation will encourage the Fed to be more aggressive, and increase the prospect of an imminent interest rate rise.
“With the unemployment rate tumbling and wages growing steadily, Janet Yellen could begin notching up interest rates within months.
“Such macroeconomic bullishness will be catnip for Dollar buyers – driving the Greenback to new highs.
“The ECB’s confirmation that the Eurozone will begin money printing next week had already put the Euro-Dollar rate on the ropes – this number will send it sprawling on the canvas.”