FTSE 100 latest: UK defence firm bucks transatlantic trend to buy up US rival

Nat Rothschild today showed deal-making in the defence industry isn’t all one way traffic after his Volex manufacturing business raided the US for its next big acquisition.

The Basingstoke-based company, which has Rothschild as its executive chairman, said its swoop for California’s Irvine Electronics should provide a significant boost to its North American profile in defence, military aerospace and medical markets.

The deal worth $16.4 million (£11.9m) turns the tables a little after US-based firms targeted leading UK defence industry suppliers including Meggitt and Ultra Electronics.

Shares in AIM-quoted Volex, whose services provide power and connectivity for complex machinery, rose 2% or 9.5p to 387.5p and have now rallied 18% over the past month, boosting the value of the 25% stake held by Rothschild as its biggest shareholder.

There was little else in terms of takeover activity to fire up the wider market, with investors on the sidelines ahead of a speech tomorrow by US Federal Reserve chair Jerome Powell.

His online address to the Jackson Hole economic symposium will be closely watched for clues on the tapering of financial support for the US economy.

The FTSE 100 index fell 39.02 points to 7,111.10, with Russian gold miner Polymetal International among those lower as improved first-half earnings were offset by higher capital expenditure guidance. Polymetal hiked its dividend 13% but shares slipped 29p to 1,494.5p.

There was also a fresh fall for shares in Sainsbury’s as the takeover speculation behind a 16% surge at the start of the week showed more signs of coming off the boil.

The FTSE 250 index, which closed at a record high last night after rising 17% in the year to date, was off 46.02 points at 23,940.35.

Transport stocks National Express and FIrstGroup were among the biggest fallers.