MARKET REPORT: Bidding war hopes sends shares in Amigo soaring

Hopes that a bidding war could be brewing have sent Amigo soaring.

The controversial lender, which has been branded a ‘legal loan shark’ by MPs, has been approached by several potential buyers after putting itself up for sale three weeks ago.

Founder James Benamor, who owns a 61 per cent stake through his Richmond Group, said he was willing to sell all or parts of the company as it faces pressure from regulators who have serious questions about its business model.

Bidding war: Amigo, which has been branded a ‘legal loan shark’ by MPs, has been approached by several potential buyers after putting itself up for sale three weeks ago

Amigo is the UK’s largest guarantor lender, meaning it lends money to people who have a poor credit rating but can offer family and friends as a back-up to guarantee any missed repayments.

The Bournemouth-based group’s possible suitors have entered into non-disclosure agreements with Amigo, meaning that it can begin sharing confidential information about its books.

Amigo jumped 8.4 per cent, or 4.1p, to 52.9p as traders settled into a comfortable seat to watch a potential bidding war play out. 

But it has yet to recoup the losses it racked up in late January when it announced the sale, with its stock down 20 per cent so far this year.

Investors piled into water companies after JP Morgan put out an upbeat report on the sector, saying the last few weeks have put ‘significant regulatory and political risks behind us’.

Stock Watch – Crimson Tide 

Tech minnow Crimson Tide has won a clutch of contracts in the rail sector that will generate at least £600,000 of long-term revenue.

Two firms will use its mobile software, which allows businesses to schedule and record tasks such as logging cleaning activities or deliveries.

Chiltern Railways has expanded its subscription to the software to cover safety and procurement, and a deal has been done with Crossrail. 

Shares jumped 11.1 per cent, or 0.25p, to 2.5p.

Water regulator Ofwat has recently finalised its price controls over the next five years, and Boris Johnson’s landslide win in the election has averted nationalisation under a Labour government.

Severn Trent rose 1.3 per cent, or 34p, to 2650p as its rating was hiked from ‘underweight’ to ‘neutral’, while Pennon Group climbed 0.9 per cent, or 11p, to 1176p as its price target was upped from 760p to 1125p. 

But it was United Utilities that made a splash, up 2.6 per cent, or 26p, to 1036.5p, as it was labelled JP Morgan’s top pick.

London’s premier index, the FTSE 100, slid into the red, losing 0.69 per cent, or 51.24 points, to close at 7382.01, as shares in heavyweight banking stock HSBC fell 6.6 per cent, or 38.8p, to 551.9p. 

The bank said profits plunged by a third last year and is now planning to cut around 35,000 jobs, or 15 per cent of staff.

The FTSE 250 also closed lower, shedding 0.7 per cent, or 147.88 points, to finish at 21678.46.

Imperial Brands’ finance boss Oliver Tant could receive as many as 102,739 shares in the cigarette maker, worth £1.9million at current prices, in coming years if a number of targets are met. It closed 0.3 per cent, or 4.6p, up to 1803.2p.

Flutter Entertainment shares rose 1.1 per cent, or 92p, to 8618p after Australia’s regulator, the Competition and Consumer Commission, waved through the gambling giant’s merger with Canadian poker heavyweight Stars Group.

Shares in Britain’s biggest private sector landlord Grainger, which builds homes to rent, shed 0.4 per cent, or 1.4p, to 335.8p after it said that it will buy a 348-home site in Nottingham from Blocwork for £56million.

Petrofac, which provides oilfield services such as training and engineering to energy companies, bagged two contracts worth a combined £1.3billion to work on a gas project near Abu Dhabi. It edged 1.1 per cent higher, by 4p, to 369p.

Sirius Minerals recovered some ground to rise 1.5 per cent, or 0.07p, to 5.1p, after it fell to 4.8p in early trading yesterday.

But the closing price still remains below a 5.5p per share takeover offer put forward by Footsie-listed Anglo American (down 2.3 per cent, or 49p, to 2054.5p) to save it from almost certain collapse. 

It comes after Sirius chief executive Chris Fraser, through the Yorkshire Post paper, urged investors to vote for the Anglo takeover on March 3.


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