Direct Line lifted by upgrade, takeover bid for Franco Manco owner Fulham Shore

“The FTSE 100 is heading into Easter with a spring in its step despite weaker than expected data from the US,” says AJ Bell head of financial analysis Danni Hewson.

“Figures on job openings and factory orders are pointing towards a potential recession for the world’s largest economy, but the upside might be a pause in interest rates which would typically be a positive for stocks.

“The concern is the Federal Reserve might have to sound the retreat before its war on inflation is truly done. This could leave us with the worst of all worlds – the dreaded stagflation where the economy is shrinking but prices are continuing to surge higher.

“Insurer Direct Line bounced back on Wednesday as Citi moved its rating from ‘sell’ to ‘buy’ on the shares – the implication being that the shares have bottomed out after a torrid period marred by a cancelled dividend amid claims of inflation and bad weather.

“The shares remain down more than 30% on the level at which they started the year and it could take some time for investors who had got used to a steady stream of income from the stock to be won over.”

Fulham Shore

“Named after his father’s love of Fulham FC, David Page has scored yet again by attracting a takeover bid for his restaurant business, Fulham Shore. Japanese group Toridoll has swooped in, spying an opportunity to expand the group’s Franco Manco brand across the UK and overseas.

“For executive chairman Page, it’s the latest tick in the box for a career that has seen him build up a series of restaurant businesses and then sell them. He was a key figure in the roll-out of Pizza Express which subsequently was bought by private equity firm TDR Capital, and then again with Gourmet Burger Kitchen which was acquired by Nando’s owner.

“A good restaurateur spots a gap in the market, rolls out a proposition with a close eye on costs and getting good deals on leases, and then waits for it to build scale before selling the chain.

“One might argue that the 14.15p takeout price for Fulham Shore doesn’t fully price in its potential. Eighteen months ago, it was trading close to 20p a share, after all. But in an economically uncertain environment, the price on the table might seem reasonable given the circumstances and possibly the best deal that could emerge for some time.”

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