Dairy Crest Takeover Comes After Stock Surge on Heavy Volume
(Bloomberg) -- The 975-million-pound ($1.3 billion) takeover of Dairy Crest Group Plc comes after a five-day surge in the stock that lifted the price by 17 percent on heavy volume.
The shares jumped as much as 13 percent on Friday after the announcement that Canadian cheese-maker Saputo Inc. agreed to buy Dairy Crest for 620 pence a share. The stock was trading at 625.5 pence at 9:27 a.m. in London.
Before the deal was made public, the stock finished a five-day winning streak on Thursday with a 5.9 percent gain on a trading volume of 2.4 million shares, compared to the three-month daily average of 358,000 shares.
Analysts have been mystified by the reasons behind this week’s increase before Friday, with some citing reduced short positions by money managers or benefits that Dairy Crest might enjoy from the failure of the Sainsbury-Asda merger.
“I don’t think I can comment on that, really,” Dairy Crest Chief Executive Officer Mark Allen said when asked about this week’s stock surge on a call Friday with journalists. “The shares have had a good run really since the first of January.”
Asked if Dairy Crest will be investigating the trading patterns or speaking to the market regulators about them, he said, “No, we won’t.” A spokeswoman for the U.K’s Financial Conduct Authority declined to comment.
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