Johnson Matthey shares soar after US conglomerate buys stake

theguardian.com:

Shares in chemicals producer Johnson Matthey have jumped by a fifth after a US industrial conglomerate bought a stake in the struggling British company, in a move that immediately prompted takeover speculation for one of the UK’s most venerable large businesses.

Shares in the company, listed on London’s FTSE 250 index, soared by as much as 30% on Friday after New York-based Standard Industries took a 5% stake. Shares retreated to an 18% gain at midday in London.

Johnson Matthey has a 205-year history in Britain’s chemicals sector, but it has struggled in recent years. In November, it abandoned an effort to become a leading producer of batteries for electric vehicles, to the dismay of the UK automotive industry.

The company’s roots go back to testing precious metals in 1817. It later became one of the world’s main suppliers to the automotive industry as rising awareness of pollution risks prompted the introduction of catalytic converters.

The catalytic converters business made it into one of Britain’s biggest companies, but it was demoted from the FTSE 100 index of blue chips in December after investors questioned what it would do when sales of vehicles with internal combustion engines are replaced by electric cars with no exhaust emissions.

Its share price hit a high of £25 on Friday, its highest since November, but still well below the £30 to £35 levels reached regularly since 2013, leaving it vulnerable to a takeover.

New York-based Standard is a privately held conglomerate with interests in specialty chemicals, building materials, property and investments. Last year it bought chemicals business Grace.

The Johnson Matthey investment will probably increase scrutiny on chief executive Liam Condon, who only started as Johnson