Ryanair boss Michael O’Leary infuriated his rivals last night by predicting a series of takeovers that he believes will soon leave just five main airlines operating in Europe. In a provocative interview with The Mail on Sunday, O’Leary suggested that London-listed Wizz Air Holdings (WIZZ), Norwegian Air, Alitalia and Air Portugal will all fall into the hands of larger peers in the next five years. He said many other firms would be forced out of business as they contend with steep fuel prices, Brexit uncertainty and another summer of delays and cancellations caused by strikes. ’Leary claimed the only big survivors would be easyJet (EZJ), Germany’s Lufthansa, Franco-Dutch giant Air France KLM, International Consolidated Airlines Group SA (CDI) (IAG) – the FTSE 100-listed owner of British Airways – and Ryanair Holdings (RYA). ‘You are going to see more failures and more consolidation,’ he said. ‘I think in Europe… five major airlines will control over 80% of the traffic. ‘Everybody else in the next five years is either going to be taken over by, become a partner of, or be subsumed into one of those groups.’ Flybmi, Germania, Primera Air and Cobalt of Cyprus have all gone bust recently, while Norwegian Air and Thomas Cook Group (TCG) airlines arm have been the subject of takeover rumours this year. O’Leary added: ‘The obvious developments, as we would see it: I think IAG will eventually buy Norwegian; I think that would lead to Lufthansa probably buying Wizz; I think it’s inevitable eventually that when the Italian government stops screwing around with Alitalia they will finish up back in the Air France KLM family; Tap [Air Portugal] will finish up as part of IAG.’ An industry source last night described O’Leary as a ‘Machiavellian’ and a ‘troublemaker’.
Big banks including HSBC Holdings (HSBA), Barclays (BARC) and Bank of Ireland Group (BIRG) could face a bill of up to £11billion for their roles in tax avoidance schemes used by wealthy celebrities, The Mail on Sunday can reveal. Lawyers and tax experts last night said they were building a war chest to sue a number of banks for creating the schemes or offering loans to investors who took part. Newport Tax Management and CFS Capital, which are managing a class action against the advisers behind the Eclipse 35 film scheme, claim HSBC, Barclays and Bank of Ireland – along with other major banks – gave an air of respectability to more than a dozen schemes that were set up to avoid tax.
The bosses of an Aim-listed miner controlled by property tycoon Nick Candy are set for crunch talks with lenders to avert its collapse. Metals Exploration (MTL) owns the Runruno gold and molybdenum mine in the Philippines, but the firm has been hit by the country’s crackdown on mining. The company, 46% owned by Candy, agreed with its banks last month that it would raise $20million (£15.3million) by issuing new shares this month so loan repayments of $63.3million are delayed. But Candy and second-largest shareholder Runruno Holdings have now said they will not put up the money, having previously backed the firm financially.
Video firm Frontier Developments (FDEV) hopes it’s game over for Aim short-sellers. There’s an online petition doing the rounds calling for short-selling of Aim-listed stocks to be banned. The petition, which has so far amassed more than 3,000 digital signatures, may seem a desperate attempt by a disgruntled Aim punter to stop his personal portfolio falling further, but it has won backing from a surprisingly high-profile name. David Braben, chief executive of video games firm Frontier Developments, took to Twitter to claim that short-selling on Aim is ‘very damaging and subject to abuse’, urging his followers to sign the parliamentary petition. Braben is an unlikely supporter of such a ban given his company’s shares have soared from £39million to nearly £350million in less than six years and it barely has any shares out on loan to short-sellers.
It’s ‘time to face the music’, according to number-crunchers at JP Morgan Cazenove, who reckon a dividend cut at Centrica (CNA) may be on the way. Last month, under-pressure chief executive Iain Conn said the British Gas owner would pay its 12p-a-share dividend for 2018 despite murmurs that he might give the dividend a trim and his warning of the impact of the Government’s energy price cap. JP Morgan Cazenove’s analysts now think Conn will cut the dividend to 8p. That may be a cut of a third but, as they point out, would still mean a 7% yield.
Domino’s Pizza Group (DOM) chief executive David Wild will face tough questions from shareholders on Tuesday when he reports annual results. Franchisees have threatened to cut back on store openings until Wild gives them a bigger chunk of profits. And, according to analysts at Liberum, they are sticking to their word – only three outlets have opened this year. The company prepared investors for bad news at the end of January by warning that profits would be at the lower end of guidance. So analysts have already pencilled less dough into their forecasts.
Software giant Micro Focus International (MCRO) faces a shareholder rebellion over a move to give bosses an extra year to hit targets which could allow them to share a £268million bonus bonanza. The FTSE 100 company’s remuneration committee is accused by Glass Lewis of having ‘not fulfilled’ its duties. The influential shareholder advisory body has urged investors to vote against the re-election of committee chairwoman Amanda Brown and the three other members – Darren Roos, Silke Scheiber and Karen Slatford – at the annual meeting on March 29. It has also recommended investors vote against the remuneration report.
Two challenger banks are in advanced discussions about a £1.6billion merger that would create a lender with a larger market value than Metro Bank, it emerged yesterday. A deal, if agreed, could be announced within a fornight, Sky News reported. OneSavings Bank (OSB) specialises in lending to buy-to-let landlords, but is also a commercial lender and offers savings accounts. It has just six branches and primarily offers its services online. Charter Court Financial Services Group (CCFS), which listed on the stock exchange in 2017, is also a specialist mortgage lender and offers savings accounts online.
Non-Standard Finance (NSF) has formally tabled its £1.3billion takeover offer for embattled doorstep lender Provident Financial (PFG). In a bid backed by star fund manager Neil Woodford, NSF has offered Provident shareholders 8.88 new NSF shares for each share in Provident Financial. Provident has rebuffed the offer from NSF, which is run by John van Kuffeler, formerly CEO and then chairman of Provident. It said the bid undervalued the business and that NSF had a ‘track record of value destruction’.
Debenhams (DEB) is racing to overhaul its debt – possibly by the end of the month – despite an attempt by billionaire sportswear tycoon Mike Ashley to usurp control from the board of directors. The beleaguered department store chain has been in talks with lenders on a plan to refinance £150million of borrowing under new terms in a major step forward for the business. The reorganisation is being led by acting chairman Terry Duddy, who previously ran Argos and Homebase owner Home Retail. An attempt by Ashley to install himself as chief executive was swept aside last week by lenders. It is understood that Ashley failed to convince lenders he had a workable plan to turn the business around. City sources said Ashley would also need to convince creditors and other investors that he could bring in a viable board to help him revitalise the business and keep it separate from House of Fraser acquisition.
MIDAS SHARE TIPS: Here’s a hot tip… – the fund seeking to profit from sun. Midas verdict: The US Solar Fund offers UK investors access to a fast-growing renewable energy market, with a robust long-term outlook. An attractive investment, despite President Trump’s antipathy.
