ASX 200 rises, TWE jumps, Zip sinks

The S&P/ASX 200 Index (ASX:XJO) rose today. The Treasury Wine Estates Ltd (ASX:TWE) share price jumped on takeover rumours.

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The S&P/ASX 200 Index (ASX: XJO) went up by 0.4% today to 6,740 points.

There were a number of movers today in the ASX 200, including the Zip Co Ltd (ASX: Z1P) share price which fell 6.7%.

Here are some of the highlights from the ASX:

Treasury Wine Estates Ltd (ASX: TWE)

The Treasury Wine share price rise more than 6% today on rumours that it's the potential target of a takeover.

According to reporting by This is Money, there is talk that the large French business Pernod Ricard is thinking about launching a takeover offer for Treasury Wine Estates.

Pernod Ricard could want to buy some, or all, of Treasury Wine Estates.

Reportedly, there is an offer $15.67 per share, though the reporting couldn't say if the offer was from the French business or a US private equity group.

Treasury Wine Estates may already have said no to Pernod Ricard, which may decide to buy up to a third of the ASX 200 share.

Santos Ltd (ASX: STO)

The Santos share price went down 2.5% after news that its biggest shareholder had decided to sell a large portion of shares. 

ENN Group told Santos that it has sold around 107 million shares, meaning just over 5% of the business, at $7.33 per share.

Santos said that the sale process was oversubscribed and received strong support from existing and new institutional shareholders.

ENN said that it's still completely supportive of Santos' strategy and future direction and is excited to remain Santos' largest individual shareholder.

It will no longer have board representation of the ASX 200 share.

ALS Ltd (ASX: ALQ)

The testing and certification business gave a trading update today and announced an acquisition.

The ALS share price ended the day higher by 0.6%.

ALS said that the group continued to trade resiliently in its third and fourth quarters, despite the COVID-19 pandemic's effects.

Management remain committed to matching the cost base to client demand, whilst managing capex and maintaining a focus on key growth opportunities.

The company said that life science volumes have been stable with laboratories providing their essential services to clients in major markets.

ALS revealed that the commodities division is starting to benefit from the improving cycle. Geochemistry sample flows increased by 13% in the third quarter of FY21, with that momentum carrying on into the fourth quarter. Major miners as well as junior and intermediate miners have contributed to this growth, although it's proportionally unchanged from late in the second quarter of FY21.

In the industrial division, tribology has seen an improvement in the third quarter of FY21, whilst the trading environment for asset care remains challenging.

The ASX 200 company said it has more than A$600 million of liquidity.

ALS' acquisition is called Investiga, which it is buying for 11x adjusted FY20 earnings before interest, tax, depreciation and amortisation (EBITDA) on a deferred basis, paid from existing debt facilities with no shareholder approval needed. Key management will remain with the business.

Investiga is a pharmaceutical testing business with operations in Brazil and the USA. It was founded in 1993 and it generated A$20 million of revenue in FY20. Investiga specialises in the cosmetic and personal care market, providing services to a range of major global clients.

It will be integrated in the existing ALS life sciences network, with a particular focus on growing in the US, which represents over a quarter of the global market.

Managing director and CEO Raj Naran said:

Growing the life sciences division is a key part of the ALS strategy and Investiga significantly increases our presence in the pharmaceutical market.

We have a strong track record of integrating acquisitions into our existing life sciences network and Investiga provides us with the platform to grow our cosmetic and personal care offering, particularly in the USA.  

Tristan Harrison has no position in any of the stocks mentioned. The Motley Fool Australia's parent company Motley Fool Holdings Inc. owns shares of ZIPCOLTD FPO. The Motley Fool Australia owns shares of and has recommended Treasury Wine Estates Limited. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

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