Budget airline easyJet is expected to return to the FTSE 100 this week after its shares rose sharply following a recommended £5.7 billion takeover offer from US private equity firm Apollo Capital Management.
The airline is currently on course to regain its place among Britain’s largest listed companies during the latest index reshuffle. Ithaca Energy, the North Sea oil and gas producer, is also expected to move into the FTSE 100.
The changes would see gambling group Entain and housebuilder Persimmon move down to the FTSE 250. Aston Martin Lagonda, meanwhile, is expected to leave the FTSE 250 entirely and enter the FTSE SmallCap index.
The changes have not yet been confirmed. FTSE Russell’s indicative review was based on market prices recorded on 21 August, while the final assessment will use closing prices from 1 September. The confirmed changes are due to be announced after markets close on 2 September.
Under FTSE Russell’s rules, companies can be removed from the FTSE 100 at a quarterly review if they fall to 111th place or lower when ranked by full market capitalisation.
For easyJet, the expected promotion represents another return to the UK’s leading share index after several periods in and out of the FTSE 100. The move comes despite challenges facing the airline, including pressure from price-sensitive passengers and heavy losses during the previous winter.
Its future position could depend on the progress of the proposed Apollo takeover. Regulatory scrutiny and approval of the ownership structure in Brussels could determine how long easyJet remains in the index if the transaction goes ahead.
Ithaca Energy has also benefited from a strong rise in its market value, which has reached about £4.5 billion. Its shares have gained around 64% this year, supported by stronger financial results, higher oil and gas prices and investor interest in its growth plans.
Entain faces the opposite direction. Its shares have fallen about 30% this year after the UK increased remote gaming duty from 21% to 40%. The higher rate applies to accounting periods beginning on or after 1 April.
Persimmon has also suffered a decline of about 13% this year. The housebuilder is dealing with weak housing demand, mortgage affordability concerns, uncertainty ahead of the October Budget and higher operating costs.
Aston Martin’s expected move out of the FTSE 250 follows a difficult period for the luxury carmaker. The company announced plans earlier this year to cut around 600 jobs after its net losses widened to £493.2 million.
Pinewood Technologies Group and Volex are expected to replace companies leaving the FTSE 250, giving both businesses a place among Britain’s mid-cap stocks.
