Construction supplier Tyman saw its stock jump sharply this morning after it seemed set to become the latest casualty of the Great Fire Sale of London. US peer Quanex tabled a cash and shares offer for the business which management were happy to recommend, giving a valuation of around £788m, around 35% higher than shares were trading on Friday night. The key argument here revolves around economies of scale and the fact this isn’t an all-cash offer is keeping the share price a little below par, but once again questions will be asked as to whether the London market is actually capable of valuing these businesses properly. Shares were 30% higher in early trade.




As London continues to wrestle with this valuations dilemma, Hipgnosis – the owners of significant music back catalogues – advised the market that following last week’s recommended cash offer, fund manager Blackstone has now tabled a new bid, increasing its valuation of the company by a further 7%. The fact a public bidding war is now in play here is notable and adds weight to the idea that the public market can’t currently recognise the true value of the stocks listed on it, Hipgnosis was up a further 11% just after 9am, suggesting that there’s belief this battle could last a while longer, yet.


Base Resources


And keeping with a theme, Base Resources jumped more than 100% in early trade before retreating slightly after the company announced it planned to merge with US based rare earths play Energy Fuels. The proposed deal based on an all share acquisition with a special dividend paid represents a 188% premium to Friday’s closing price. Support has already been secured from the two largest shareholders who between them own more than 50% of the stock and just over an hour into the day Base shares were trading around 80% higher.


Headlines we expect to see on Tuesday


Associated British Foods Interim Results

This time last year Revenue £9,560m, Adj operating profit £684m, eps 67p


Taylor Wimpey Trading Update

This time last year Order book £2,379m for 8576 homes, Net private sales rate Jan-Apr 0.75