Vistry in £1.25 billion takeover of rival housebuilder, Aston Martin offers shares at a big discount

“The FTSE 100 started the week lower as Russia’s decision to turn off Europe’s gas hangs over the continent like a grim shadow ahead of winter,” says AJ Bell investment director Russ Mould.

“Predictably, wholesale gas prices are soaring, raising the prospect of even higher energy bills for businesses and consumers and sending the pound and the euro to new multi-year lows against the dollar.

“The US is in the enviable position of having relatively high levels of energy independence which insulate it from Putin’s proxy battle in the energy market as he looks to punish Europe for its support for Ukraine in the current conflict.

“This step was not entirely unexpected and everyone will be looking for answers to the current crisis, however it seems unlikely investments in new sources of energy will bear much fruit in the short term.”

New Prime Minister

“This is the treacherous landscape into which a new UK Prime Minister will step later today as the result of the Conservative leadership election is announced.

“Liz Truss is widely expected to prevail, although given the challenges the country faces it feels like something of a poisoned chalice.

“Top of the agenda will have to be some kind of answer to the current energy crisis, with the protracted process of appointing a new leader leaving companies and consumers hanging for weeks after the alarming outlook for energy costs became clear.”

Vistry

“Housebuilder and regeneration specialist Vistry’s £1.25 billion takeover of Countryside Properties is a bold move given the current backdrop, with a spiralling cost of living crisis, signs of a weakening housing market and rising interest rates.

“The two businesses seem a decent fit given they both operate in the realm of partnerships with local authorities and housing associations to build affordable housing.

“Vistry’s – or Bovis Homes as it used to be called – acquisition of Galliford Try’s housing and regeneration arm also looked ill-timed when it was announced just before the pandemic. That deal looks rather better in hindsight and perhaps Vistry’s latest deal will appear similarly astute a few years down the line.”

Aston Martin

“For what’s meant to be a premium brand, Aston Martin is behaving like a desperate start-up company, going cap in hand once again to shareholders asking for more money. Its offering of shares at a 78.5% discount to last Friday’s closing price shows how desperate it is to secure new funds.

“While it says the new money should help it achieve strategic goals, this might simply be Aston Martin finding another piece of frayed rope to keep it afloat and avoid sinking completely into quicksand. The key question is for how long the rope will stay intact before the company needs help again.

“The car manufacturer has been a flop since joining the stock market and one has to wonder if it would be better off as a privately-owned company.”

These articles are for information purposes only and are not a personal recommendation or advice.