The five best-performing shares this week

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The five best-performing shares this week

Takeover news has dominated this week and has led to large gains for a number of companies. But it's Cape PLC (CIU) who take the top spot.

The industrial services company has agreed today to a takeover bid from Altrad Group to the tune of £332.2 million. On the news, shares jumped some 46% on Thursday's close and are up 41.1% this week.

Shareholders will receive 265p per share, representing a large 46% premium on its closing price of 181p on Thursday.

Cape, a leader in the provision of critical industrial services to energy and natural resource sectors, will join forces with construction equipment giant Altrad, whose shrewd acquisitions of a number of UK industrial companies has facilitated their rise to becoming a market leader in industrial services.

Mohed Altrad, chairman of Altrad Group, said: "We believe the proposed acquisition can bring together our respective strengths to create a powerful global platform with a strong competitive edge to meet customers' requirements."

Cape, which has been heavily affected by the falling price of oil, gave a mixed trading statement in June, suggesting 2018 would "be a more challenging year for them". Perhaps the takeover bid has come at the right time.

The five best-performing shares of the week
Rank Company Ticker Market Cap (£bn) Performance (%)
1 Cape CIU 0.32 41.1
2 Oxford BioMedica OXB 0.30 30.5
3 Novae NVA 0.45 24.4
4 Worldpay WPG 7.36 17
5 Virgin Money VM. 1.33 12.4
Source: Sharepad from close 30/06/2017 to close 07/07/2017

Oxford Biomedica (OXB) has taken second place. The gene and cell therapy company benefited from speculation regarding a new contract with multinational pharmaceutical company Novartis (NVS).

The contract, which was officially announced on Thursday, is an agreement to supply Novartis with "lentiviral vectors used to generate CTL019 and other undisclosed Chimeric Antigen Receptor T products". Effectively, Oxford Biomedica will supply lentiviral vectors, which is used to generate a treatment for a type of leukaemia.

This could earn Oxford Biomedica over $100 million (£77.6 million) in three years, in the form of $10 million up front and royalties from the sales. CEO John Dawson said on the news: "The new deal with Novartis will strengthen the group's balance sheet immediately and will support the group's continued growth over the next three years."

Having been considered an unstable company, highlighted last week when the group financed its debt, investors are bound to be encouraged by the news of a large contract, and as a result shares are up 29.9% this week.

Third on the list comes reinsurer Novae Group (NVA). Shares were up 24.3% this week on the news of a takeover bid from Bermudan insurer and reinsurer Axis Capital Holdings Ltd.

The 700p per share offer values the company at £467.6 million and represents a premium of 20% on their previous close of 582.5p.

John Hastings-Bass, chairman of Novae, said on the news: "Axis is a substantial and successful business which represents an excellent partner for the Novae business."

The takeover was not liked by everyone. Neptune Investment Management, who hold a stake in Novae, believe the 700p per share bid to be undervalued. It is true Novae has had a rough ride over the past year, with the share price plummeting over 30% since December 2016.

The deal means only three insurers would remain listed on the London Stock Exchange.

Worldpay Group (WPG) were also subject of a potential takeover this week, and come in at fourth place.

Initially JP Morgan (JPM) and payment giant Vantiv (VNTV) had flirted with a potential offer, with this speculation leading to a 30% rise in share prices on Tuesday.

However, by close on Wednesday, JP Morgan had ruled out making a formal takeover offer and Worldpay agreed preliminary terms with their rival, Vantiv, in a deal worth £9.1 billion. As a result, shares slumped just over 9% on Wednesday alone, giving a total rise for the week of 14.8%.

Last but not least, Virgin Money (VM.) was a big gainer, with shares up 11.4%.

This was due to the Bank of England releasing its review on credit card lending, where milder recommendations were given than first feared.

On release of the news, the bank released a statement saying it "has a high quality credit card book and does not lend in the unsecured personal loan or motor finance markets".

This article is for information and discussion purposes only and does not form a recommendation to invest or otherwise. The value of an investment may fall. The investments referred to in this article may not be suitable for all investors, and if in doubt, an investor should seek advice from a qualified investment adviser.