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FTSE Open: Takeover bids send London small-caps surging

London stocks were muted as the FTSE 100 rose 1.63 points to 7,488.54 while the midcap FTSE 250 dipped 25.89 points to 18,650.59. But smaller companies saw big share price moves after M&A announcements. Luxury …

London stocks were muted as the FTSE 100 rose 1.63 points to 7,488.54 while the midcap FTSE 250 dipped 25.89 points to 18,650.59. But smaller companies saw big share price moves after M&A announcements.

Luxury chocolatier Hotel Chocolat jumped to 365p as US confectionery giant Mars agreed to buy it for 375p per share, valuing Hotel Chocolat at £534 million. The offer is a hefty premium to Wednesday’s close of 139p.

Meanwhile, pub operator City Pub Group rocketed 30% as fellow AIM firm Young’s made a recommended 108.75p per share offer. The 46% premium values City Pub at £162 million.

The deal would expand Young’s managed pub estate by 50 sites to 279. Young’s expects “strategic, operational and financial benefits” from the tie-up. Its shares inched up 0.9% to 1,690p.

Among FTSE firms, Burberry plunged 10% to 1,245p as the British fashion brand warned full-year sales will likely miss guidance amid slowing luxury demand.

Industrial group Melrose Industries gained 1.8% to 155.05p after hiking its 2022 profit outlook on better trading.

Oil majors BP and Shell fell 0.7% and 1.3% respectively, amid downward pressure on oil prices. Brent crude slipped below $81 a barrel after a surprise increase in US stockpiles.

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