London shares were mixed in Thursday's trading session, with the mid-cap FTSE 250 index edging higher on the back of a blockbuster takeover bid for Rotork plc, while the blue-chip FTSE 100 index declined, weighed down by weakness in technology and large-cap stocks.
The FTSE 250 index rose 77.92 points, or 0.33%, to 23,540.31, propelled almost entirely by Rotork's surge. Rotork shares jumped 66.85% to 485.3p after Swiss industrial group ABB Ltd offered £4.14 billion in cash, or 506p per share, a 73% premium to Wednesday's close. The move added approximately 132 points to the FTSE 250, masking broader weakness in mid-caps. Excluding Rotork, the index would have fallen by an estimated 54 points, or 0.23%.
In contrast, the FTSE 100 slipped 36.16 points, or 0.34%, to 10,479.76, as heavyweight stocks like Experian and RELX declined. Experian held annual guidance steady, disappointing investors, while RELX moved lower amid a broader tech sell-off.
ABB's offer values Rotork at 19.5 times its 2025 adjusted EBITDA, with ABB CEO Morten Wierod noting that expected synergies will bring the multiple down to the mid-teens. ABB shares fell 4% in Swiss trading as the market digested the acquisition. Wierod also indicated that ABB retains significant firepower for further M&A, with about $14 billion in remaining capacity.
The Rotork deal was not the only M&A activity in London. Gooch & Housego PLC received a 1,234.9p per share buyout offer, representing a 41.3% premium, including its interim dividend. KKR & Co raised its bid for DCC plc to £67.97 per share, factoring in a potential £1.25 per share from a Nexora unit sale, a nearly 7% premium to DCC's last close of £63.55.
On the economic front, UK GDP edged up 0.1% in May, matching the median economist forecast. Services output rose 0.3%, while production and construction both contracted. The data did little to drive broad-based buying in mid-caps, underlining the technical nature of the index move.
Investors should note that Rotork shares trade about 4% below the offer price, implying some residual risk. The deal is expected to close in the first half of 2027, subject to conditions. Any delays could widen the spread.
The divergence between the headline FTSE 250 gain and the underlying weakness in most mid-caps highlights the importance of looking beyond index-level moves for a true read on UK market sentiment.
