Telit Communications leapt on London’s junior market amid City rumours that a takeover battle for the troubled Tesla supplier is about to break out between its mysterious Chinese top shareholder and private equity firms.
The bombed-out shares of the “internet of things” firm, which has secured a purchase order to supply parts in Tesla’s Model 3 cars, make it an enticing proposition for shareholder Run Liang Tai Management, which has been aggressively building its stake.
Its shares crashed 52pc in a week in August after its boss Oozi Cats took a leave of absence amid allegations that he is wanted for a 25-year-old fraud case in Boston, and its interim boss Yosi Fait warned that full-year profits and sales will be lower than expected in September.
Hong Kong-based Run Liang Tai Management already holds a 14pc stake in Telit, which is heavily shorted by hedge funds, and built up its position rapidly in September, according to regulatory filings. Although little is known about the Chinese investment vehicle, it is believed to have the capital capabilities to take Telit private, just months after a Chinese private equity firm snapped up fellow British tech minnow Imagination Technologies.
Private equity firms are thought to be keeping an eye on the Aim-listed firm with a bidding war expected to push the takeover price towards the 300p mark, a hefty premium on its current value but a snip compared with the 371.8p it hit just over six months ago. Swirling chatter lifted Telit up by as much as 5.8pc before its shares settled 6.3p, or 3.7pc, higher at 174.5p.
Elsewhere, satellite giant Inmarsat initially took off, climbing 8.5pc on its expectations beating revenue, but sentiment quickly reversed and the FTSE 250 firm nosedived 43p to 517p. The company’s “backwards looking good news is just flattering to deceive” and investors will take issue with the outlook, Jefferies analyst Giles Thorne explained.
Housebuilders trailed the FTSE 100 for a second consecutive day after Redrow’s slowdown intensified concerns about the sector’s outlook after Persimmon’s own disappointing figures on Wednesday. Peer Barratt Developments slipped 23p to 612p while Persimmon tumbled a further 110p to £26.62.
Fashion house Burberry fell 198p to £17.87 and weighed heavily on the FTSE 100 as investors shunned its shift in strategy while mining stocks plunged despite stronger-than-expected Chinese inflation data. Stocks across the globe dived on a turn in investor sentiment, taking their cue from poor corporate figures and a volatile Japanese session overnight. The FTSE 100 escaped the worst of the retreat, however, closing just 45.62 points lower at 7,484.10.