Movers of Monday 21 June 2021

Francesca Morgan
Market Report
15:30, 21st June 2021

Wm Morrison Supermarkets (MRW) shares soared 33.39% to 238.15p after £5.5bn offer 

Shares in the UK's fourth-largest supermarket chain soared on Monday after Clayton, Dubilier & Rice, a US private equity firm, made an offer to buy the business for £5.5 billion.  

In response, the Board of Morrisons has rejected the offer, stating that it has "significantly undervalued" the business as well as “its future prospects". Under the current UK takeover rules, CD&R has until 17 July 2021 to either announce a firm intention to bid or walk away. 

MRW price chart

 88 Energy (88E) shares jumped 15.91% to 1.275p as it enters new $18.7m sale agreement 

The Alaskan-focused explorer has entered into an agreement that will facilitate the sale of all the Alaskan Oil and Gas Tax Credits, currently held by Accumulate Energy Alaska, Inc, a 100% owned subsidiary of 88E, for US$18.7m in cash. The sale is anticipated to occur within the next few weeks, subject to Alaskan Department of Revenue approvals and processes.   

The deal accelerates the timeframe of 88E’s value realisation from the Tax Credits, which under current estimates wouldn’t have been fully paid out by the Alaskan State until 2026. 

The majority of the proceeds from the sale are to be applied towards full repayment of 88 Energy's current outstanding debt of US$16.1m with FCS Advisors, LLC which was due to mature on 30 December 2022.  Early repayment penalties have been waived by FCS. 

MD, Ashley Gilbert, said: "This is a transaction which accelerates the realisation of value of the Alaskan Oil and Gas Tax Credits and the early repayment of outstanding debt due to be repaid by the end of 2022.  As a result of the transaction, the Company is now set to be debt free with reduced annual overheads of over US$1 million in associated finance costs." 

88E price chart

 Hurricane Energy (HUR) shares rose 14.27% to 1.345p following development approval 

On Thursday the UK based oil and gas company announced the approval of the Lancaster Field Development Plan Addendum (the "FDPA") by the UK's Oil and Gas Authority. 

At the time, Hurricane said the FDPA approval, together with associated production, flare, and vent consents, would enable production with the flowing bottom hole pressure up to 300 psi below the bubble point pressure of the fluid (1,605 psia at 1,240 metres TVDSS), subject to the Company ensuring that no incremental liberated gas is produced to surface. 

The initial consent is for a three-month period from 16 June to 15 September 2021 while production, flare, and vent consents will be issued on a three-monthly basis, it reported. 

The approval of the Lancaster FDPA satisfies a key condition of the Company's proposed financial restructuring, as originally announced on 30 April 2021, Hurricane told investors. 

HUR price chart

 Zephyr Energy (ZPHR)shares jumped 11.76% to 5.7p as it expects ‘significant activity’ 

Last week, in an operational update on its assets in the United States, Zephyr Energy said that “significant activity” is expected across the group’s asset portfolio in the coming weeks.   

Addressing shareholders, Colin Harrington, Chief Executive of the Rocky Mountain-focused oil and gas company said Zephyr Energy has a “great deal of activity” going on across its project portfolio and that he was “delighted” with how everything is progressing to date.   

At the Williston Basin, the S-Bar wells have been placed into production, ahead of forecast schedule, and the Feehan wells are expected to be placed into production this month.    

The company highlighted that it intends to update shareholders on production rates ‘in the coming weeks’, once the wells have cleaned up and reached a peak initial rate, it noted.   

At Zephyr’s flagship project in the Paradox Basin in Utah, U.S, preparations continue ahead of the drilling of the State 16-2LN CC lateral appraisal well (the "lateral") which is scheduled to spud in July and which will target Zephyr’s first production from the Paradox project.   

The company informed investors that final permitting is expected shortly and that vendor negotiations (including the rig contract) are expected to be finalised in the coming weeks.   

ZPHR price chart

Dr Martens (DOCS) shares fell 6.11% to 396.4p after pre-tax profits fall by 30%  

Shares in the shoe brand have fallen by over 15% in value over the past week. In its first set of results as a publicly listed firm released last week, the retailer said sales in the year to March 31 saw a 15% rise to £773m from FY19 with particular growth in its online business.  

Despite reporting solid sales, pre-tax profits fell by 30% to £70.9m, largely as a result of the group’s £80.5 million costs associated with its stock market listing on LSE in January 2021.   

Addressing shareholders, the company noted that its guidance set out at the time of the IPO remains unchanged, for both FY22 and over the medium-term. In FY22 it expects high teens revenue growth year-on-year, as it laps the Covid-19 impact experienced in FY21.  

The footwear brand highlighted that trading since the year end has been in line with its expectations. It added that the Board expects to begin paying a dividend later in FY22.  

DOCS price chart

Disclaimer & Declaration of Interest

The information, investment views and recommendations in this article are provided for general information purposes only. Nothing in this article should be construed as a solicitation to buy or sell any financial product relating to any companies under discussion or to engage in or refrain from doing so or engaging in any other transaction. Any opinions or comments are made to the best of the knowledge and belief of the writer but no responsibility is accepted for actions based on such opinions or comments. Vox Markets may receive payment from companies mentioned for enhanced profiling or publication presence. The writer may or may not hold investments in the companies under discussion.

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