Chip Hornsby, Wolseley’s chief executive, has had a busy week. On Sunday it emerged the building materials giant had appointed Deutsche Bank, Lehman Brothers and UBS to fend off a takeover bid.
This was after a credit crunch-fuelled profit warning last Thursday that saw its share price drop 2% to 525p. It also wiped about £70m off its market cap, turning our imaginary £100 stake in the company into £84.
But the takeover chatter meant shares were up 4% to 547p by Tuesday afternoon, leading some in the City to wonder about the convenient timing of the appointment of the big-hitting banks. As one pointed out: “Two of the three are already its advisers and there is no suggestion whatsoever that it has actually been approached.”
Either way, our £84 became £88.
Elsewhere Taylor Wimpey’s shares dropped below the £1 barrier to close at 96.5p on Friday, reducing our original £100 stake by almost half to £56. Nasty.