Vets shares fall, FTSE 100 up
Fast-growing vet business CVS was brought to heels today by the competition watchdog amid concerns about the impact a £20m acquisition could have on pet owners ‘animals.
The Competition and Markets Authority (CMA) has warned that the deal struck for eight firms Quality Pet Care, which operates as The Vet, has the potential to significantly lessen competition in five locations, including Bristol and Nottingham.
He gave CVS five days to come up with remedies that will obviate the need for further investigation. AIM-listed CVS, which has 467 veterinary practices and is worth £1.3billion amid the pandemic’s pet ownership boom, said it was disappointed with the decision.
CVS believes this is the first case in which the CMA has assessed local competition in the veterinary sector, adding that there are good reasons to believe that the case may be overturned if it chooses a full investigation. .
He also pointed out that there are around 5,300 registered veterinary practices in the UK, giving him a market share of 9% by number.
The shares fell 7% or 134p to 1740p, leaving CVS at a level last seen in March 2021 as the intervention raised fears it could be harder to close deals in the future.
Another company whose shares have fallen in recent months is Darktrace, the FTSE 250-listed cybersecurity stock undergoing a rollercoaster session today.
The shares fell to 306.8p, below the 330p they ended on their first day of trading in April. Darktrace topped 1,000p in September, but was undone by market sentiment and a City broker warning of a “disconnect” between valuation and earnings opportunity.
Shares then rose 11.2p to 331p as Darktrace today announced a multi-million dollar contract renewal with a major semiconductor company, which is using self-learning AI to protect itself cyber attacks and threats.
Other tech-focused companies remained under pressure, but the FTSE 100 index rose 14.37 points to 7,551.74 as investors welcomed talks between the United States and Russia next week in the goal of finding a diplomatic solution to the Ukrainian crisis.
Reckitt Benckiser topped the riser chart for a second straight day, rising another 2% or 141p to 6,293p amid a positive response to the consumer giant’s annual results on Thursday. Its former drugs division Indivior also continued its strong run, with shares up 2% to help the FTSE 250 index rise 11 points to 21,568.59.