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TAKE PROFITS: Renold (RNO)

Close Renold (RNO) at market (80p)

We’re taking profits on both tranches of our Renold position with the shares now trading just 2p below the 82p offer price. That small discount reflects the risk premium for holding through to completion, not further upside. The board has unanimously backed the deal, it’s being implemented through a scheme of arrangement, and the 50% premium to the pre-offer price tells us this is as good as it gets. In short, the value has been realised, and the remaining risk is just noise.

The buyer, a US private equity firm, plans to bolt Renold onto its portfolio company Webster Industries to build a global player in automation and power transmission. That might be an exciting story in a few years, but it’s no longer our story. In this market, where bid premiums can evaporate and timelines can drift, we’re more than happy to bank the win and look for new opportunities.

Profit tranche 1 = 46.3%

Profit tranche 2 = 57.7%

RNO Daily Candle Chart