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FirstGroup and Darktrace Share Prices Diverged. What Next?

FirstGroup and DarkTrace share prices diverged sharply as the merger and acquisition trends in the UK took different turns. DarkTrace stock has surged by more than 30%, while FirstGroup has dropped to the lowest level since May. 

FirstGroup and DarkTrace M&A

FirstGroup is a leading transport company with over 856 million pounds market cap. It provides public transport like buses and trains. According to its website, the firm’s rail carries over 550k people every day. It has over 17,500 employees and a fleet of 3,800 rail vehicles. At the same time, the company’s bus carries over 887k people using its over 4,900 buses.

The FirstGroup share price crashed after a private equity company terminated its pursuit. I Squared Capital Advisors said that it will walk away from a deal to buy the firm for about 1.2 billion pounds. FirstGroup said that the offer undervalued the company substantially. This announcement came a few months after the company sold its school bus business for $4.6 billion.

The Darktrace share price surged after rumours that the company will soon be taken private by Thoma Bravo. According to the Financial Times, the company is being advised by Jefferies and Lazard. DarkTrace has a market cap of over 3.65 billion pounds, making it one of the biggest cybersecurity companies in the UK. 

The acquisition will come a few weeks after regulators approved the acquisition of Avast, a cybersecurity company by NortonLifeLock. As such, analysts believe that the Darktrace purchase will be approved by UK regulators. 

FirstGroup share price forecast

The daily chart shows that the FirstGroup share price reached a peak of 145.5p on May 26th. The stock then made a strong bearish breakout and dropped to the lowest level since May 26th after the suitor walked away. The shares moved below the 25-day and 50-day moving averages while the MACD has moved below the neutral point.

Therefore, the shares will likely continue falling as sellers target the next key support level at 100p. A move above the resistance point at 121p will invalidate the bearish view.

FirstGroup share price

Darktrace share price forecast

The daily chart shows that the Darktrace share price has been on a slow recovery path in the past few weeks. The stock rally accelerated this week as M&A rumours continued. It rose to a high of March 3rd. It rose above the 25-day and 50-day moving averages while the MACD moved above the neutral level. The stock will likely remain in this range in the near term.

darktrace share price