It was hard not to notice the two FTSE 100 Supermarket in yesterday’s trading session. The J. Sciencebury (LSE: SBRY) The share price was the highest in Monday’s trading, rising 3.4%. Morrison (LSE: MRW), on the other hand, showed the exact opposite trend. The company’s share price fell about 4%.
And according to media reports, there is a link between these two trends.
Morrison purchase progress
It so happened that Clayton, Dublier & Rice (CD&R), a private equity firm that initially tendered for Morrison, finally won the deal awaiting shareholder approval. The price to be paid now is a whopping 61% higher than initially offered. But perhaps 1 paise narrow margin, it got the deal, could be some comfort. It offers a price of 287p per share, while a consortium led by Softbank-backed Fortress Investment Group offers a price of 286p. The share price of the supermarket has been hovering around 200 paise for the last one month. Thus the price reduction is explained by the difference between the final price and its previous level.
Morrison explains the piece in this story. But why was Sciencebury stock up?
Speculation around Sciencebury
It is thought the losing bidder at Morrison Bay could now turn his attention to Sciencebury, some reports say. Sciencebury recently received the offer. In late August, it received one from the US-based Apollo Management Group, pushing its share price to a multi-year high. Apollo also bid for Morrison, so it’s not too far-fetched to think Fortress might be interested. Moreover, the UK supermarket space seems particularly attractive to investors. Assad was sold to a private equity fund earlier this year.
What will I do about the FTSE 100 stock now
If I wanted to make quick money in the short term, the latest developments might tempt me to buy Sciencebury stock. After all, Morrison’s shares were significantly bid. But then there is no way to know what is actually going to happen. Will the castle really make a bid for Sciencebury? I do not know. If it is, will a sale actually happen? No one knows!
My point is, there are a lot of unknowns at the moment. I’m not a ‘quick buck’ investor. There could still be a case for buying stock if I was a believer in its fundamentals. I think it would make sense to buy it for its strong credentials. If there is a sale, I can still make a good profit in a short time and if it is not, I will keep a good stock. But I don’t think that’s the case. For the year ending March 6, 2021, the company’s revenue has just increased from the previous year and it has also gone into loss.
I won’t buy Sciencebury now, and Morrison is close to selling now, so I don’t think it’s a good idea to consider it.
Manika Premsingh has no position in any of the shares mentioned. Motley Flower UK has recommended Morrison. The opinions expressed in the companies mentioned in this article may differ from those of the authors and therefore the official recommendations we make on our subscription services such as Share Advisors, Hidden Winners and Pro. Here at The Motley Flower we believe that considering a variety of insights makes us a better investor.