Watchdog blow to Sainsbury’s deal ‘leaves private equity eyeing Asda’. Asda on Wednesday became a prime target for a private equity bid after its £12 billion merger with larger rival Sainsbury (J) (SBRY) was dealt a huge blow. The competition watchdog demanded that one of the two brands or “significant” numbers of stores be sold, if the mega-deal were to have a chance of getting through by the April 30 deadline. The Competition and Markets Authority said the deal would mean higher prices and less choice for shoppers. But this could see other possible suitors for the UK’s third-largest grocer swoop in as its parent company Walmart is keen to offload it.
Telly addicts are watching closely as ITV (ITV) plots Britain’s answer to Netflix. Netflix has wound up rivals in the TV and film business by claiming it doesn’t see them as a threat. “We compete with, and lose to, Fortnite more than HBO,” it declared at its annual results when it suggested immersive computer games are more serious competition than any subscription TV or online video platform. “Our focus is not on Disney+ [Disney’s new planned streaming service], Amazon or others, but on how we can improve our experience for our members,” Netflix added. Meanwhile, ITV chief executive Dame Carolyn McCall is set to unveil a SVOD service at its annual results next Wednesday. McCall has been talking to the BBC about teaming up to create a “British Netflix”, along the lines of BritBox, their joint venture in the US. The fact ITV and the BBC might collaborate, with the blessing of regulator Ofcom, is a sign of just how much the global streaming giants have already disrupted British TV and changed viewers’ expectations, with potentially harmful consequences for homegrown content.
Flybe snubs late takeover deal to pump in £65 million and stay listed. Flybe Group (FLYB) has knocked back a last-minute takeover deal from a South African hedge fund and a regional US airline. Backed by Flybe’s second-largest shareholder Andrew Tinkler, Bateleur Capital and Mesa Airlines have teamed up and offered to make a capital injection of £65 million at 4.5p a share and keep the company listed. But Flybe’s board today said it was sticking with an offer from Connect Airways, a group made up of Richard Branson’s Virgin Atlantic, Stobart Air and venture capital firm Cyrus which has vowed to put in £100 million.
Glencore bows to climate change pressure to cap coal production. Commodity giant Glencore (GLEN) will cap thermal coal production following pressure from investors worried about climate change. The FTSE 100 giant, the world’s largest supplier of coal, on Wednesday said it would not exceed current production levels from now on. The company, which has ramped up production in recent years, churns out about 150 million metric tons a year. The move is part of a broader push to get onside with investors increasingly vocal about climate change. Glencore said investing in climate change-proof assets was necessary to “deliver a strong investment case”.
Intu shopping centres feel £1.4bn pain as dividend axed. Lakeside owner Intu Properties (INTU) laid bare the current pain being felt across the UK’s retail landscape on Wednesday as it wiped a whopping £1.4 billion off the value of its shopping centres. The firm — subject to two takeover bids last year — saw shares slump nearly 9% or 10.1p to 108.1p as it also scrapped its full-year dividend in the wake of several high-profile retail collapses including Toys R Us, House of Fraser, New Look and HMV. Its centres fell 13% in value last year but according to Goodbody analyst Colm Lauder, “in our view, this is only the start”. The firm is also looking at selling off some of its destinations to cut its £4.8 billion debt pile, although sales are likely to be a tough ask in the current uncertain climate.
Lloyds boss insists UK has bright future as shareholders get £4bn. Lloyds Banking Group (LLOY) on Wednesday insisted that the economy is in good shape as it defended plans to hand shareholders £4 billion. Britain’s biggest retail bank — regarded as a proxy for the UK economy — saw profits rise 24% to £4.4 billion in 2018. Some in the City say the rising profits are mostly a result of lower payment protection claims — it set aside another £750 million this time, taking the total to £19.4 billion, but that’s much lower than previously. Lloyds chief executive António Horta-Osório insists it is growing strongly and shrugged off fears the UK economy is heading for trouble, noting employment is high and interest rates low. The bank is upping the dividend by 5% to 3.21p a share and planning a share buyback of £1.75 billion — spending £4 billion in all.
