MARKET REPORT: Specialist insurance firm Novae Group rises to its highest value this year after announcing it will be bought for £468m
Specialist insurance firm Novae Group rose to its highest value this year after announcing it will be bought for £468m, despite opposition from its biggest investor.
Novae, one of few remaining listed Lloyd’s insurers, saw £83.1m added to its value after announcing that it will be purchased by Bermuda-based Axis Capital.
Axis will pay 700p per share for Novae, which is a 20 per cent premium to its share price, in a deal which will see just three specialist Lloyd’s insurers remaining on the London market – Beazley, Hiscox, and Lancashire.
Shares in Novae, which offers protection on properties and against casualties, rose 22.2 per cent, or 129p, to 710.5p following the deal’s announcement.
But Neptune Investment Management, which owns 16 per cent of Novae, was far from impressed, with fund manager Mark Martin arguing the offer undervalues it.
Brokers responded more positively, with Peel Hunt claiming the deal will allow Novae to continue to invest and grow its insurance business, giving it an ‘add’ rating and a price target of 665p.
The FTSE 100 fell 0.4 per cent, or 30.32, to 7337.28, despite strong performance from housebuilders following resilient results from Bovis Homes. Shares in rare disease specialist Shire were among the top performers in morning trading after it submitted an application for a new drug to treat haemophilia, which stops the body being able to clot blood, to the US Food and Drug Administration.
But shares sank in afternoon trading, closing down 1.8 per cent, or 76.5p, to 4257p. Great Portland Estates rose after it said that it had increased its exposure to the upcoming Crossrail project in London by buying properties near upcoming stations.
The company, which develops office and retail buildings in London, has bought two properties in Whitechapel for nearly £50m.
Over the quarter to June 30, the firm agreed 20 new lettings and dismissed concerns its London focus leaves it prone to a Brexit-driven slowdown in the commercial property market. Shares rose 0.4 per cent, or 2.5p, to 595p.
Oxford BioMedica, the Oxford University cell therapy spin-off which has seen shares jump 87pc in the last month, announced a new tie-up with drug giant Novartis yesterday.
After being paid £7.7m up front, Oxford could get more than £77m over three years for supplying Novartis with material for its ‘blockbuster’ cell therapy, a new kind of treatment for leukaemia.
Oxford already had a deal with Novartis and has seen shares soar in anticipation of the treatment being approved by US health authorities later this month. Yesterday, shares rose 0.4 per cent, or 0.04p, to 9.89p.
IT firm Microgen shot up to an all-time high after reporting ‘exceptional growth’ in its technology designed to make finance bosses’ lives easier. It said revenue from its software used to help with number crunching, forecasting results, and accounting grew 42 per cent to £15m since June last year.
As a result, Microgen said financial performance for the whole of 2017 is like to be significantly ahead of expectations.
Brokers at Investec reinstated their ‘buy’ rating for the stock and upgraded their price target from 330p to 400p. Shares rose 18.2 per cent, or 57.5p, to 374p.
Myanmar-based social media firm MySquar fell after launching its own news portal to plug what it perceived to be a gap in the local market for news – shares fell 6.2 per cent, or 0.3p, to 4.52p.