Serious doubts about Hong Kong’s £32 billion offer for the London Stock Exchange Group (LSE) grew on Thursday just one day after the daring bid emerged. Investors say the deal could fail over price, regulatory and political concerns even in the unlikely event that the LSE’s management backed the offer. The first opportunity investors in Hong Kong Exchanges and Clearing (HKEX) had to react to the deal saw the shares fall more than 3%, taking $1 billion off the value of the company. With growing talk in the City that HKEX is in effect controlled by the Chinese, the LSE is widely expected to formally reject the deal.
The boss of Morrison (Wm) Supermarkets (MRW) today struck a bullish tone as the food industry digested the government’s chaotic Operation Yellowhammer warnings. The government was last night forced to release its no-deal Brexit planning documents, which predict supplies of fresh food will decrease, a reduction in choice of products, disruption of fuel distribution and huge delays to Dover-Calais crossings. Morrisons chief executive David Potts said: “We have prepared for all eventualities. It’s important we can keep the goods flowing to provide the goods shoppers have got used to receiving.”
Metro Bank (MTRO) shares took a tumble today as hedge funds and Goldman Sachs ganged up on the challenger bank. Regent Street-based Ena Investment Capital increased its short position by 11% to 3.4 million shares, or 2% of the company’s stock. Ena follows Marshall Wace, Odey Asset Management and Connor, Clark & Lunn Investment Management, who have also made moves over the past week, stats from the ShortTracker website show. Goldman Sachs also stuck the boot in, downgrading the stock. The bets come as Metro is set to crash out of the FTSE 250 this month and in the wake of Vernon Hill stepping down as chairman. It tops what has been a torrid year for Metro after the group admitted in January that many commercial loans had been incorrectly classified in an accounting error. It was then forced to ask investors for £375 million to bolster its balance sheet.
Brown (N.) Group (BWNG) showed that PPI doesn’t just affect the big banks. The retailer provides credit to its customers and had been selling PPI. This session it said it would take another £30 million hit from the scandal, sending its shares lower. John Stevenson at Peel Hunt said: “In keeping with the wider financial services sector, N Brown has seen a surge in claims volumes ahead of the deadline, with volumes up tenfold.”
British American Tobacco (BATS) new boss on Thursday outlined plans to cut 2300 jobs as the firm tries to adapt to customers ditching traditional cigarettes for vaping. The owner of brands such as Benson & Hedges and Lucky Strike said the lay-offs are expected to complete by January 2020. BAT, which employs some 55,000 people, of which just under 2500 are in the UK, gave no breakdown of where the cuts will happen. However, it said there will be a “focus on simplification and removal of management layers”. It is expected over 20% of senior roles will be affected.
