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FTSE Russell, the global index provider, its latest quarterly review on 1 September 2021, which saw two changes to the FTSE 100, and seven changes to the FTSE 250.

Wm Morrison Supermarkets plc (Morrisons) fell into the FTSE 250 in March 2021 (see: ) and six months later has found its way back into the FTSE 100. Morrisons has been the subject of private equity interest June 2021 (see: ) and has seen a foreign private equity (PE) battle breaking out, with a £7bn from US PE firm CD&R trumping the £6.7bn from a consortium led by another US PE firm, Fortress Investment Group LLC (see: ). Morrisons’ share price has continued to climb as a result of this interest, closing at £2.89 on 1 September 2021, a 71% increase since the £1.69 per share it closed at on 2 March 2021 when it was knocked off the FTSE 100. However, should the private equity backed takeover of Morrisons proceed to completion, Morrisons’ ascension into the FTSE 100 may not survive past the next quarter, with a delisting on the horizon, given that CD&R’s offer is expected to become effective by October 2021 (subject to satisfaction or waiver of certain conditions).

Aerospace and defence firm, Meggitt plc (Meggitt) has seen itself promoted to the FTSE 100. Meggitt is also the subject of takeover interest from two US aerospace companies, with Parker-Hannifin Corporation presenting a £6.3bn at £8 per share (see: ) and competitor TransDigm Group (TransDigm) with a £7.03bn at £9 per share (see: ). Meggitt’s shares have continued to trade above £8 per share since announcement of TransDigm’s proposal and closed at £8.30 on 1 September 2021, a 77% increase since the £4.69 it closed at on 30 July 2021 (one business day prior to the commencement of the offer period), giving it a market capitalisation of £6.5bn.

Morrisons and Meggitt will replace Just Eat Takeaway.com and Weir Group in the FTSE 100. Just Eat merged with Euronext Amsterdam-listed Takeaway.com in January 2020 and intended for Just Eat Takeaway.com N.V to be delisted from Euronext Amsterdam to allow the company to retain a sole premium listing on the London Stock Exchange (LSE). Delisting from Euronext Amsterdam however did not occur, and as by the company in July 2021, it is still considering the optimal listing venues for the company’s long term future. FTSE Russell the nationality of Just Eat Takeaway.com in August 2021 and reassigned the company to Dutch nationality, rather than British nationality, given that the company is incorporated in the Netherlands and listed on Euronext Amsterdam. This reassignment made Just Eat Takeaway.com ineligible for inclusion on the FTSE UK Index and has resulted in one of the few tech companies on the premium segment falling out of the FTSE 100. With listings on the LSE, Euronext Amsterdam and Nasdaq, Just Eat Takeaway.com’s hesitance to delist from Euronext Amsterdam places the attractiveness of the FTSE 100 for tech stocks into question.    

On the other hand, AI cybersecurity company Darktrace plc (Darktrace), is a tech listing that has made a splash with a promotion to the FTSE 250, a mere four months after its onto the premium segment of the LSE (see: ). Darktrace had a successful IPO of £2.50 per share, with the company being one of the few in H1 2021 to have a market capitalisation in excess of £1bn immediately following admission at the offer price (see: ). Darktrace’s shares closed at £6.44 on 1 September 2021, with a market capitalisation of around £4.2bn.

All changes will be implemented at the close of business on Friday, 17 September 2021 and take effect from the start of trading on Monday, 20 September 2021.