 | Advisers enjoy £280m fee bonanza on London Stock Exchange Group (LSE)-Refinitiv deal. Costs set to surge with financing as takeover navigates shareholder and antitrust hurdles |
 | Lombard – Marks & Spencer Group (MKS) mixed bag shows too few signs of changing. Food was up but clothing down and the businesses do not look a good fit |
 | Lex – Intu Properties (INTU)/UK retail: jump scare. Mall landlord may already have joined the ranks of UK’s zombie businesses |
 | Jupiter Fund Management (JUP) names fund veteran Nichola Pease as new chair. Former JO Hambro chief is married to Crispin Odey who has recently taken short positions in group |
  | Virgin Media to ditch BT Group (BT.A) mobile network for Vodafone Group (VOD). Blow to BT as it comes under pressure to spend billions upgrading full-fibre capability |
| Marks & Spencer Group (MKS) shows signs of progress despite fall in clothing sales. Margins slip after stock availability problems but food business returns to growth |
| Marks & Spencer Group (MKS) 300,000 private shareholders were hit with more woe yesterday as profits plunged and the dividend was slashed. On another bleak day for investors, the high street stalwart said half-year profits fell 17% to £177million as clothing sales dived 5.5%. The firm, which plans to close 110 stores by 2022, also confirmed a 40% cut in the interim dividend from 6.5p to 3.9p per share. One bright spot was the 0.9% rise in food sales. Russ Mould, investment director at AJ Bell, said: ‘The disappointments are piling up for Marks & Spencer like unsold sweaters and cardigans on its shelves.’ Total sales fell by 2.1% to £4.86billion in the six months to September 28, weighed down by the ailing clothing and home business. Rowe said that efforts to turn the clothing and home section around were 18 months behind schedule, adding: ‘The headline numbers aren’t where we want them to be. The thorn in the shoe is clothing and home.’ He added: ‘Our transformation plan is now running at a pace and scale not seen before. For the first time we are beginning to see the potential from the far-reaching changes we are making. ‘The food business is outperforming the market. In clothing and home we are making up for lost time. We are clear on the issues we need to fix.’ |
 | Veteran fund manager Nichola Pease has taken up the prestigious post of chairman at investment firm Jupiter Fund Management (JUP). A former chief executive of JO Hambro Capital Management, who has more than 30 years’ experience in the financial services industry, 58-year-old Pease takes over from Liz Airey next March. She will stand down immediately from the board of rival fund manager Schroders (SDR), where she has been a director for seven years. But embarrassingly for Pease, her husband, renowned hedge fund manager Crispin Odey, has been betting against Jupiter all year. Odey Asset Management first revealed in February that it held a short position in the company. |
| Virgin Media’s three million mobile phone customers will be using the Vodafone Group (VOD) network from 2021, after the companies agreed to a five-year deal. The agreement, which will run until 2026, will see Vodafone supply wholesale mobile network services, including voice and data, to Virgin Mobile and Virgin Media Business. It will replace Virgin Media’s current arrangement with BT Group (BT.A) which ends in late 2021 and is estimated to be worth around £200million to BT. The deal is known as the Mobile Virtual Network Operator (MVNO) agreement and will allow Virgin Media, which is owned by Liberty Global, to have full access to all of Vodafone’s current services and future technology, such as its 5G network. MVNOs allow mobile operators that do not own their own wireless network infrastructure to lease wireless telephone and data spectrum from a mobile network operator. Most MVNOs in the UK use either BT-owned EE, Three or O2 as their host network. |
 | Redrow (RDW) has suffered a shareholder revolt over pay and the controversial choice of its new chairman. Nearly a third of investors opposed its pay report at an annual general meeting in London, with a similar number opposing John Tutte’s appointment. It followed moves by the company to lower targets for its long-term bonuses, making it easier for bosses to earn big payouts. Former boss and founder Steve Morgan, 66, will still be entitled to bonuses, even though he has retired. He has a 20% stake in the company worth £422million. There has also been anger at former chief executive Tutte, 63, becoming executive chairman, in breach of City rules for best practice in the boardroom. |
 | Breedon Group (BREE) sank after a major investor disposed of its stake. M1 Cement, a top-five shareholder, has sold almost 140m shares in the Leicestershire-based group at a price of 59p each. These shares formed a stake of about 8%. M1 Cement has netted £82.4million from the sale. Shares plunged 7p, to close at 58.4p. |
 | Cybersecurity group Sophos Group (SOPH) swung to a loss of £1.2million in the six months to September 30, down from profit of £20.2million in the same period of the year before. It comes just weeks after the Abingdon-based group announced it will be taken over by US investment firm Thoma Bravo for £3billion. Sophos was stung by one-off costs, including £5.5million making staff redundant in Germany. |
| Beleaguered luxury car maker Aston Martin Holdings (AML) edged lower ahead of its third-quarter results today. Amid warnings that it will sell fewer cars this year, rescue financings and mounting debt, the City will be keen to hear more about Aston’s first SUV, the DBX, the much-extolled vehicle that could be its saviour. | |
 | The Competition and Markets Authority gave the all-clear to Unite Group (UTG) £1.4billion takeover of fellow student accommodation provider Liberty Living, which is currently owned by the Canadian Pension Plan Investment Board. |
 | Carpetright (CPR) told shareholders that Investec Asset Management has also pledged to vote in favour of the possible rescue offer by the retailer’s lender, Meditor. This means around holders of 28 per cent of the shares will back Meditor’s proposed cut-price takeover. |
| Foreign investment firms are leading a $152bn blitz on the London Stock Exchange as they take advantage of the weak pound and City short-termism to snap up a string of unloved British companies. Tens of billions of dollars of cash is sitting in the coffers of private equity funds that can be used to takeover undervalued listed UK businesses which require long-term investment their current owners are unwilling to provide. Bookie William Hill and hotelier Whitbread are seen as prime candidates for a takeover. Among firms to spot an opportunity is the world’s largest private equity player Blackstone. | |
 | Rolls-Royce Holdings (RR.) the legendary British engineering company is turning to Germany to make a hybrid-electric engine for small planes which it hopes to have flying within two years. The business has teamed up with German aerospace design company APUS and Brandenburg university for the project, which uses a hybrid power system in which a jet engine generates electricity to power motors which then turn propellers. Research to develop the environmentally-friendly aircraft is being funded by the Brandenburg state government and European Union regional development funds. Experts said the decision to pick German over the UK is a sad indictment of British appetite for engineering projects. |
| Intu Properties (INTU) has warned it is likely to seek extra cash from shareholders as the shopping centre firm battles falling rental income and struggles to sell assets. The Lakeside and the Trafford Centre owner is preparing to tap up the stock market for vital funds – but analysts said Intu’s tumbling share price could make it impossible to raise enough cash. Intu may need to raise between £1bn and £2bn, Kempen analyst Max Nimmo said. He added this would seriously reduce the percentage of the firm owned by existing shareholders, saddling them with major losses. Deutsche Bank warned there is a heightened risk Intu may not be able to raise enough money from investors to pay down its debts. |
| The chairman of Marks & Spencer Group (MKS) poured cold water on suggestions that its top brass could split its food and clothing and home business after a slump in half-year profits at the retailer. Archie Norman, the retail veteran who revived Asda’s fortunes in the Nineties, said: “Look, no, that’s not our plan. Nothing is forever, but if you take it too far, you’re going to lose a lot of cost and a lot of brand value in the business.” Chief executive Steve Rowe, who is an M&S lifer, has made the executives running the two divisions more responsible for their performance. However, he ousted Jill McDonald, the clothing boss, in July after the retailer was left out of stock in February. |
 | City bankers who fought off a hostile bid for the London Stock Exchange Group (LSE) will share in a bumper payday of up to £280m if its merger with Refinitiv is approved later this month. A string of top firms including Goldman Sachs, Morgan Stanley and Barclays (BARC) will get a cut of the cash, which has been set aside by LSE and Refinitiv bosses to pay fees for their £22bn tie-up. LSE shareholders will meet on Nov 26 to decide whether or not to approve the merger with data company Refinitv. It comes after a failed attempt by rival Hong Kong Exchanges and Clearing to crash the bid earlier this year. |
| A top hedge fund manager known as one half of the City’s “Posh and Becks” has been appointed as chairman of a fund house her husband Crispin Odey has been betting against. Nichola Pease – whose family helped found Barclays Bank, where her brother-in-law John Varley was formerly chief executive – will take over at Jupiter Fund Management (JUP) next March. The 58-year-old is married to Brexit-backing hedge fund chief Mr Odey, who was short-selling Jupiter’s shares as recently as Oct 31 when he had a bet against 0.66% of the stock, according to filings with the Financial Conduct Authority watchdog. |
| It was a poor session for companies exposed to the UK’s shaky retail industry yesterday, as a sharp fall for Intu Properties (INTU) sent shock waves through the wider sector. The shopping centre operator shares fell after warning it expected a hit to rental income. The predicted fall came after a slew of retailers launched company voluntary arrangement (CVA) processes in order to renegotiate their rents. Deutsche Bank analysts warned the impact from CVAs had been “worse than expected”. |
| The chairman of Marks & Spencer Group (MKS) has ruled out breaking up the retailer, saying that it would be completely impractical to split the clothing and food divisions. Archie Norman made the comments as M&S said that a fall in sales for its struggling fashion department had dragged down profits. The retailer suffered a 17.1% drop in adjusted pre-tax profits — which strips out the cost of its restructuring programme to shut more than 100 shops — to £177 million. Total sales for the six months to September 28 fell by 2.1% to £4.86 billion. The retailer said that the benefits of its turnaround plan were beginning to be seen in its food division, with total sales up by 1.2% and like-for-like sales rising by 0.9% as it outperformed supermarket rivals. |
| Jupiter Fund Management (JUP) has hired a former Northern Rock director as its chairwoman without requiring any regulatory approval, raising eyebrows among shareholders burnt by the failure of the bank in 2007. Nichola Pease, who sat on the board of Northern Rock as a non-executive director from 1999 until its collapse, was named as successor to Liz Airey at the FTSE 250 asset manager, which looks after £46 billion of small investors’ savings. Northern Rock directors, including Ms Pease, 58, were criticised by MPs on the Treasury select committee for their “high-risk, reckless business strategy” and for failing to act as a restraining force on executives. They also were indirectly criticised in an internal report by the Financial Services Authority, which said that boards of financial institutions were ultimately responsible for financial soundness. |
| European countries must work together to prepare for a severe economic shock because the central bank is out of ammunition and risks are rising, the International Monetary Fund has warned. “Given elevated downside risks, contingency plans should be at the ready for implementation, not least because the scope for monetary policy action has diminished,” the global economic watchdog said. “A synchronised fiscal response could become suitable.” Last month the IMF cut its euro area growth forecasts to 1.2% this year and 1.4% next, from 1.3% and 1.6%, respectively. The biggest downgrade was to Germany, Europe’s economic powerhouse, where the growth estimate for 2019 was cut from 0.7% to only 0.5%, its weakest in four years. | |
| BT Group (BT.A) was dealt a blow yesterday when Virgin Media said that it was ditching the EE mobile network when its contract expires and would move its three million-plus mobile customers to Vodafone Group (VOD). The loss of the deal, worth up to £200 million a year, sent shares of BT lower. Virgin Media’s agreement with BT Enterprise, which has been in place for almost two years, will end in late 2021, at which point its mobile offering will switch to Vodafone, although Virgin will launch 5G services on Vodafone earlier. Customers will not have to change Sim cards. Analysts described the sharp fall in the BT share price as an overreaction, with Jerry Dellis, at Jefferies, the broker, pointing out that the lengthy winding down of its contract “gives BT plenty of time to mitigate the issue by adjusting investment plans”. He estimated a hit of £100 million to its free cashflow from 2023. |
| Intu Properties (INTU) the indebted owner of vast shopping centres in Essex and Manchester is preparing to raise equity and sell stakes in its best-known retail malls next year. Intu is trying to reduce its £4.5 billion debt and thus lessen the risk of it breaching its debt covenants because of falling property valuations, which have pushed its debt-to-asset ratio up to 57.7%. The landlord said in July that a cash-raising effort was on the table and that prospect has increased as uncertainty over the worth of retail property has made it difficult to sell shopping centres. It sold only £21 million of assets in the third quarter. |
 | AstraZeneca (AZN) is to set up a new research and development centre in China and will jointly establish a $1 billion fund to invest in healthcare innovation companies in the country. The pharmaceuticals group said that it would more than double its research and development staff in Shanghai to about 1,000 people with the new centre. It would focus on “diseases that are prevalent in China, home to around a quarter of world’s disease burden, as well as other parts of Asia”, it said. Astrazeneca said that it was also establishing a healthcare industrial fund jointly with China International Capital Corporation, the Chinese investment bank, with a target size of $1 billion. This will back domestic and international companies seeking to establish a presence in China. |
| Advisers on the London Stock Exchange Group (LSE) purchase of Refinitiv hit the jackpot, scooping total fees of £281 million, the two sides revealed. Goldman Sachs, Morgan Stanley and Robey Warshaw for LSEG and Evercore, Canson Capital Partners and Jefferies for Refinitiv are thought to be the main beneficiaries. The London exchange is paying about $27 billion in newly issued shares for Refinitiv, the financial data group carved out of Thomson Reuters in 2018 and now part-owned by Blackstone. LSEG shareholders will vote on the deal on November 26. |
| Almost a third of Redrow (RDW) shareholders have revolted over executive pay and the reappointment of John Tutte as chairman. The rebellion at the housebuilder came after ISS and Glass Lewis, the investor advisory groups, urged a vote against the re-election of Mr Tutte, 63, citing his defiance of corporate governance guidelines by moving from the position of chief executive to chairman in April. ISS also raised concerns about the pay of Steve Morgan, 66, the founder, who stood down this year as chairman after carrying out a farewell tour, using his helicopter to visit every Redrow regional office. The advisory group raised the alert about Mr Morgan still being entitled to long-term incentive payments, while Glass Lewis took issue with the board’s bonus targets being lowered. |
| A leading shareholder in Breedon Group (BREE) sold its stake and amid rumours that another big investor might cut its holding. M1 Cement offloaded its 8.3% stake in Breedon, pocketing £82.4 million as it sold the shares at 59p apiece — a small discount to the prevailing share price. The group quickly reassured investors that Amit Bhatia, its chairman, was not involved with M1 and retained his sizeable interest in the business. It did not help that Davy trimmed its forecasts for the company, citing weaker British construction activity in September and October. There also was a rumour among City traders that Invesco, Breedon’s biggest shareholder with a 17.2% stake, may be looking to reduce its holding. The investment group first bought Breedon shares in the days of Neil Woodford, the former star stockpicker, whose successor, Mark Barnett, has held on to the investment. Breedon declined to comment on the gossip, while Invesco, which is understood to have last met the company’s bosses in September, could not be reached. |
 | Ultra Electronics Holdings (ULE) was on investors’ radars after a bullish trading update. The company, formed in a buyout from the old Dowty defence group in the 1990s, said: “Our major markets are growing and our strong technology base is positioning us well on existing and potential future programmes.” In August it signed a joint venture with Sparton, of the United States, to win a billion-dollar contract for its marine listening devices. |
 | Frontier Developments (FDEV) caused a commotion when it launched Planet Zoo, which lets players build and run their own park. Critics loved it, one describing it as its “undisputed game of the year”. Investors also bought into the hype and the shares zipped up 94p to £12.14, valuing the company at almost £475 million. |
 | Mothercare (MTC) enjoyed its best day for almost 20 years, surging by 3p to 12½p as the market got behind its turnaround plans. Administrators at PWC confirmed that all 79 stores in the UK would be subject to a “phased closure”, putting 2,800 jobs at risk, but Mothercare has more than 1,000 stores in more than 40 countries, which will be the focus as managers target a return to profitability by the end of 2021. |
| Tempus – BT Group (BT.A): Avoid. Pressures on cash flows at a company that has been struggling to find growth cast too much doubt over dividend |
 | Tempus – Hill & Smith Holdings (HILS): Hold. Well placed to benefit from intrastructure spending, but shares are volatile |
 | At least three Ryanair Boeing 737s have been grounded due to cracks between the wing and fuselage but this was not disclosed to the public, the Guardian can reveal. The budget Irish airline is the latest to be affected by faults in the “pickle fork” structure, which has sparked an urgent grounding of 50 planes globally since 3 October. While other airlines, such as Australia’s Qantas and America’s Southwest, have disclosed the number of their planes affected by the cracks, Ryanair Holdings (RYA) – which operates the largest fleet of 737s in Europe – has previously refused to confirm how many of its planes have been affected. |
 | The £4bn takeover of British defence manufacturer Cobham (COB) by the US private equity firm Advent has hit a new delay after the business secretary said she needed more time to consider the deal’s national security implications. In a parliamentary written statement published on Tuesday, Andrea Leadsom wrote that she needed “further full and proper consideration of the issues”. The new delay may mean that a potentially controversial decision on thetakeover is not made until after the general election on 12 December. Leadsom’s statement said: “The full legal process will continue to be followed throughout the general election period.” |
  | The UK betting industry has devised five safer gambling commitments, as the embattled sector attempts to avoid having new regulations imposed on it by central government. The announcement comes in the same week that shares in UK gambling firms lost nearly £1.2bn in value, after the Guardian revealed that MPs had recommended curbs on online casino games worth more than £2bn a year to the industry. It also follows years of criticism that betting companies have failed to take seriously the risk their products pose to some customers. Chief executives of 10 of the UK’s best-known gambling groups – including Bet365, William Hill (WMH) and the Ladbrokes and Coral owner GVC Holdings (GVC), said the commitments represented “the most comprehensive set of measures from a wide group of leaders across the sector to support the UK Gambling Commission’s national strategy to reduce gambling harms”. |
| Mothercare (MTC) is to close all of its 79 UK stores and its online business with the potential loss of 2,800 jobs after calling in administrators from PricewaterhouseCoopers on Tuesday. The administration will not include Mothercare’s profitable overseas operations, which have more than 1,000 stores in more than 40 countries – all run via franchise agreements. Only 50 UK head office staff will remain to deal with running the international business. Zelf Hussain, the joint administrator and PwC partner, said Mothercare’s stores would be closing over the coming “weeks and months” with the loss of 2,485 retail jobs. The administration also affects 384 head office and distribution staff and there could be further job losses at the retailer’s outsourced warehousing and call centres. |
 | Primark is to step up expansion in the US and move into Poland after reporting a rise in annual sales that defied a difficult period for clothing retailers around the world. The cut-price clothing chain, which does not sell online, said sales were up 4% and it planned to open 19 stores around the world in the year ahead. They include a 65,000 sq ft store in the former Bhs outlet in Manchester’s Trafford Centre and its first shop in Poland. George Weston, the chief executive of Primark’s owner Associated British Foods (ABF), said the retailer had signed up to open four more stores in the US – including in Florida, Chicago and Philadelphia – and was in negotiations on several more. He said the group, which has opened nine stores in the US since 2015, was confident it had the right store format, product range and management team in place across the Atlantic. “We’ve earned the right to open more stores,” he said. “We’re hoping to open a handful a year over the next few years.” |
| Lex – Associated British Foods (ABF)/Primark: Weston union. The conglomerate’s family owners provide a stability that investors should welcome |
 | Former Royal Bank of Scotland Group (RBS) exec recalls ‘tensions’ over toxic loans in court. Property developer claims bank placed him under ‘unlawful’ pressure to transfer assets |
 | Inmarsat (ISAT) rejects activist effort to thwart $6bn takeover. Oaktree accuses UK satellite group of ignoring US spectrum value in deal price |
| Royal Bank of Scotland Group (RBS) plans ‘social bond’ to boost regional UK economy. Bank will use proceeds to back lending in areas of high unemployment |
| Associated British Foods (ABF) expects Primark to benefit from pound’s recovery. Conglomerate had previously warned that stronger dollar would hit margins |
| Shares in Trainline Plc (TRN) skidded lower after the cost of the travel booking firm’s stock market float pushed it £89million into the red. Stock dipped after it revealed its listing on the London Stock Exchange resulted in a £91.5million bill. This was made up of about £21.1million in ‘transaction costs’, which included adviser fees and staff bonuses, and around £70.4million in one-off expenses. Without the steep bill, Trainline said that it would have booked a £2million profit for the six months to August 31. That was after ticket sales rose to more than £1.8billion, up from £1.5billion during the same period a year ago. Clare Gilmartin, 44, the firm’s chief executive, said the strong growth in ticket sales was partly due to more people buying via their mobiles. | |
| The £4billion sale of Cobham (COB) has hit a bump in the road after the Business Secretary said she needed more time to scrutinise the takeover. Andrea Leadsom said she would speak to fellow ministers to decide whether the deal poses a threat to national security. Leadsom received the CMA’s report last week. In a Parliamentary statement she said that the purdah period, when Parliament is dissolved ahead of an election, will not interfere with a decision. |
| The former head of the toxic restructuring arm at Royal Bank of Scotland Group (RBS) has told how the lender was put under pressure by a Government agency to push its small business customers into financial distress. Appearing in court for the first time, Derek Sach described the fraught relationship between the bank and the Asset Protection Agency (APA) in the wake of the financial crisis. The 71-year-old, who ran the Global Restructuring Group (GRG) at RBS, was called as a witness by Oliver Morley, a property developer who is suing the bank over claims it placed him under economic duress and sold some of his properties for its own benefit. |
| Associated British Foods (ABF) profits at its sugar division tanked 79% to £29million on the back of lower prices in Europe, though bosses forecast they would rise again this year. But things were rosier at its grocery business, which includes Ovaltine and Dorset Cereals, where sales grew 2% to £3.5billion in the year to September 14. And at budget fashion chain Primark, profits rose 8% to £913million on £7.8billion of sales. Primark has bucked the gloom on the High Street, even though it does not offer online shopping, and ABF said a weaker dollar and tighter stock management offered the biggest boosts last year. Profits across ABF rose 2%. to £1.4billion. |
 | Crackdowns on vaping in the US knocked sales in the Americas at Imperial Brands (IMB) new products division, which sells e-cigarettes. Sales in the US arm of its ‘next generation products’ business dived 26.5 per cent to £111million. Overall sales edged up to £31.6billion in the year to September 30, up from £30billion the year before, though pre-tax profits tumbled 7% to £1.69billion. In a separate announcement, Imperial said senior independent director Therese Esperdy will take over from Mark Williamson as chairman from January 1. |
 | Fisher (James) & Sons (FSJ) floundered after it was the victim of a cyber attack. It was scant on details but said it has launched an investigation and has taken the targeted systems offline. |
 | Weir Group (WEIR) was on the up despite issuing a warning on profits in its oil and gas division, and revealing it has cut a fifth of its US workforce on the back of difficult trading in America. Shares in Glasgow-based Weir edged higher as it pledged to focus its attention on its other businesses. |
 | Investors were nonplussed by figures from serviced office provider IWG (IWG) that showed revenues rose 9.4% to £692million between July and September. Shares in IWG, which added 66 new sites to its portfolio, were almost flat. |
 | TI Fluid Systems (TIFS) rallied after it added Tim Cobbold, who was the chief executive of money printer De La Rue between 2011 and 2014, as the company’s senior independent director on Monday. |
 | Gem Diamonds Ltd. (DI) (GEMD) tweaked its full-year guidance after it sold 10% fewer carats of diamonds in the third quarter, becoming the latest miner in the sector to report difficult trading. The Lesotho-focused miner estimates it will sell between 111,000 and 113,000 carats in 2019, down from previous forecasts of 115,000 to 119,000. |
| Mike Ashley has put his crusade to conquer the high street on hold after failed bids to buy Debenhams and Goals Soccer Centres, and a disastrous takeover of House of Fraser. The tycoon said he will not step in to rescue any more collapsed retailers as the UK arm of Mothercare fell into administration, putting 2,900 jobs at risk. It calls time on a frantic buying spree launched by Mr Ashley through Sports Direct as he sought to take advantage of the high street crisis to build a retail empire, a campaign which has left him in control of a string of major brands. Mr Ashley said he will do nothing to save Mothercare, whose 79 British stores are now thought likely to shut. | |
| Two major City firms are seen as frontrunners to take over disgraced fund manager Neil Woodford’s third investment fund ahead of a decision on whether to wind it up. BlackRock and Schroders (SDR) are thought to be leading candidates to take charge of the £253m Income Focus Fund following the collapse of Mr Woodford’s empire. Income Focus savers have been blocked from withdrawing cash out of Income Focus by Link Fund Solutions, a company tasked with making sure fund managers follow the rules which took over temporarily after Mr Woodford ducked out. Link is now seeking a company to take over and keep Income Focus operating. |
| The former boss of Royal Bank of Scotland Group (RBS) scandal-hit restructuring arm has suggested it came under pressure from the government to maximise revenues by seizing small companies’ assets instead of helping them stay afloat. In his first public grilling since a bruising appearance in front of MPs five years ago, Derek Sach told a packed courtroom on Tuesday that the Asset Protection Agency (APA), a division of the Treasury, produced “an extra pressure” on his Global Restructuring Group (GRG). He said that after RBS’s £45bn bailout during the financial crisis his division had to follow rules from the APA that “overrode everything except the rule of law”. |
| Inmarsat (ISAT) $3.4bn (£2.6bn) takeover at the hands of US private equity could face a delay after several prominent shareholders said the business was considerably undervalued. Oaktree Capital Management, owned by billionaire Howard Marks, hit out against the deal on Tuesday, arguing that Inmarsat could be worth significantly more if Ligado recovers its license which would allow it to roll out a 5G network. Inmarsat has an agreement in place to lease spectrum to the US mobile network which relaunched in 2016 after years of bankruptcy protection. |
| Rugby player turned financier will be among the biggest losers from the collapse of Mothercare (MTC). Richard Griffiths is the largest shareholder in the failing toys and baby clothes chain, with a 19.7% stake owned through his investment firm Ora Capital. Mothercare managed to protect thousands of staff and former workers from pension cutbacks by shifting responsibility for pensions from the UK business to the international operation. The ailing retailer’s international business is profitable and will be unaffected by the administration. |
| Insurers have been warned to set aside millions of pounds of extra cash by the Bank of England amid fears over a raft of claims from the US opioid crisis. Firms were told to bolster their reserves ahead of an expected $50bn (£38bn) compensation charge for the scandal, in which powerful prescription painkillers are said to have contributed to 400,000 overdose deaths over the past 20 years. Drugmakers landed with vast bills are expected to seek pay-outs from their insurance companies. |
| The government pressured Royal Bank of Scotland Group (RBS) to foreclose on business customers and acquire their properties, according to the executive who ran the bank’s disgraced restructuring unit. Derek Sach, former head of RBS’s Global Restructuring Group, told the High Court yesterday that a Treasury agency had tried to influence many of the decisions taken by the division. In his first public appearance in five years, Mr Sach, 71, said that the government’s asset protection agency, which insured RBS’s toxic loans after the financial crisis struck, had no interest in customers and would have preferred the bank to have “flogged” businesses to secure the government’s objectives. |
| Unresolved issues have prevented the clearance of the £4 billion takeover of Cobham (COB) by an American private equity firm. On the day that parliament was dissolved, Andrea Leadsom, the business secretary, indicated that she had been unable to make up her mind whether to intervene in Advent International’s takeover of Cobham in a deal already agreed by the British company’s shareholders. The minister is sitting on a report from the Competition and Markets Authority into the proposed takeover that was filed a week ago. She has yet to divulge the contents of that report. |
| has said it will not rescue any more distressed retailers until politicians introduce better protection for shareholders facing losses from collapsed companies. A spokesman for Sports Direct said: “While there continue to be retailers in distress — with the latest example being Mothercare — Sports Direct currently has no intention of looking at saving any of these retailers while there is a lack of protection for shareholders/owners, because unscrupulous politicians are more interested in their own PR than doing what is right.” The comment was issued as part of a spat with Rachel Reeves, chairwoman of the Commons’ business, energy and industrial strategy committee. | |
 | Dixons Carphone (DC.) has been rebuked by the competition watchdog after mystery shoppers said that the electrical retailer had misled them on product warranties. Alex Baldock, Dixons Carphone’s chief executive, has made boosting the retailer’s financial division by increasing its customer credit offer a key part of his revival efforts. “Paying by instalment also facilitates the add-on sale of other services. We see higher warranty, insurance, protection and repair product penetration going along with credit customers than we do with cash,” the company said in June. However, Dixons Carphone has been reprimanded by the Competition and Markets Authority, which said that a quarter of staff at Currys could not provide accurate information on its warranties. |
| More than 2,800 jobs are under threat and 79 shops will close after Mothercare (MTC) finally called in administrators for its British business yesterday. PWC was appointed to wind down the maternity and baby goods retailer’s loss-making UK retail and online operations. Its profitable international business, comprising 1,010 franchised stores in 40 countries, will be unscathed. The administrator said that all of Mothercare’s 79 UK stores “will be wound down over the coming weeks and months”. It is expected to lead to the loss of 2,485 retail jobs, of which 500 are full-time, and a further 384 roles in head office and distribution. |
| The £2.6 billion takeover of Inmarsat (ISAT) has been cast into doubt after a trio of hedge funds staged a late attempt to squeeze more cash from the buyer. Oaktree Capital, a Los Angeles-based fund with 2.8% of the satellite operator, said that the deal should be delayed by a month so that the board could renegotiate. Its demand won the backing of Rubric Capital and Kite Lake, with respective holdings of 2.2% and 3.8%. Inmarsat agreed in March to be bought by a consortium of investors including Warburg Pincus and Apax Partners. The acquisition has been approved by shareholders and regulators and is scheduled to be rubber-stamped in the High Court next week. |
| Strong sales at its store in Brooklyn, New York, have given Associated British Foods (ABF) the confidence to press ahead with an expansion programme for its Primark fashion chain in the United States. Primark’s sales rose by 4.2% to £7.9 billion in the year to September 14, while operating profits increased by 8%. “The positive reception by US consumers to Primark, combined with our profitable store model, gives us confidence for further expansion,” George Weston, 55, ABF’s chief executive, said. He added that rather than claiming to have cracked the notoriously difficult American market, the retailer had “earned the right to keep going in the US.” |
| The impact of America’s crackdown on vaping was laid bare yesterday when Imperial Brands (IMB) announced a 26.5% slide in annual US revenues from next-generation products. The decline in the United States in the year to September to £111 million — amid bans by some American states and by Walmart, the giant retailer — was in stark contrast with an increase in sales of vaping products of more than 100% to £131 million in Europe. Worldwide growth in next-generation products slowed to 52.4%, worse than had been expected. |
| Racking up more than £70 million of exceptional costs during its recent stock market listing has sent Trainline Plc (TRN) deeper into the red. The initial public offering in June unlocked a £65 million share payout for executives and senior managers, which resulted in a £50 million charge in Trainline’s accounts. The company also incurred £21 million in float fees and a further charge relating to stock awards for minority investors. All that pushed Trainline to an £89 million pre-tax loss in the six months to the end of August, compared with an £11 million deficit last year. Revenues rose 29% to £129 million, while adjusted underlying profits doubled to £42 million. | |
| Weakening conditions in the North American shale market could hit profit from the oil and gas division of Weir Group (WEIR) by more than 40%, analysts have warned. The engineer said that orders in its third quarter were up by 4% as a result of a strong performance from its minerals division, but oil and gas orders were down 32% year-on-year as capacity in US shale basins is cut back. Weir is making £30 million of cost savings in oil and gas, with 450 jobs going across the division in America. Oil and gas was only “moderately profitable” in July to September and that is not expected to improve in the final three months of 2019, it said. |
| Fisher (James) & Sons (FSJ) has become the latest to suffer a data breach, adding its name to a list that includes Talktalk, British Airways and the NHS. There were few details about the incident, with the company refusing to divulge any more than it had to, including what data might have been stolen and how much it could cost. All that the management was willing to confirm was that hackers had gained access to some of its computer systems and that “forensic cybersecurity experts” had been brought in to figure out what had happened and how. |
| Dixons Carphone (DC.) shares slid after analysts at RBC downgraded the electronics retailer. They reckoned that “very warm weather” over the August bank holiday weekend had knocked sales during a key period for retailers, while they also expected margins to have come under pressure amid price cuts in computing. As a result, trading in the second quarter, which ran until the end of October, probably would have been “softer” than expected, giving the executives “more work to do” if they are to hit their annual profit target of £210 million. RBC doesn’t think Dixons will make any changes to that guidance in next month’s half-year results. “[The] valuation is less compelling following a recent move up in the shares; hence, our downgrade to ‘sector perform’,” its analysts said in a note to clients. |
 | GAN (GAN) — a gaming software provider that works with companies such as Flutter Entertainment, — rose 11p to 126p. The company, listed on Aim, expects revenue to more than double this year, boosted by soaring demand in the United States as more states move to legalise sports betting. |
 | Investors in Filta Group Holdings (FLTA) had their fingers burnt as its shares fell 43p to 150p. Filta is taking longer than expected to bed-in one of last year’s acquisitions, while it has had to push back some work and hire staff to help it to catch up with an order backlog. As a result, its underlying earnings for the second half of 2019 will be similar to those delivered in the opening six months of the year. |
 | Tempus – Essentra (ESNT): Hold. Well placed to benefit from improvements since 2017 and this should gradually push the share price higher |
 | Tempus – Future (FUTR): Avoid. Impressive and efficient but shares don’t come cheap |
| Mothercare (MTC) UK business has become the latest high-profile victim of the high street crisis as the baby and maternity retailer said it was entering administration, putting 2,500 jobs at risk. The company said it expected its 79-shop UK chain and online business, which lost £36.3m last year, to be wound down by administrators as it had become clear it could not return to profitability. The administration will not include Mothercare’s profitable overseas operations, which have more than 1,000 stores in over 40 countries. The company, which opened its first store in 1961, said the UK administration filing – which is expected as soon as Tuesday – was a “necessary step in the restructuring and refinancing of the group” after failing to find a buyer. |
 | Shares in UK gambling firms lost nearly £1.2bn in value after the Guardian revealed that MPs had recommended stringent curbs on online casino games worth more than £2bn a year to the industry.MPs from the cross-party group on gambling-related harm, who joined the successful campaign to cut stakes on fixed-odds betting terminals (FOBTs) to £2, recommended the same limit be applied to web-based slot machine games. The MPs, who include the former Conservative party leader Iain Duncan Smith, are understood to be hopeful they can convince policymakers in No 10 to include tighter controls on gambling firms in the party’s general election manifesto. Markets responded to the MPs’ recommendation by staging a mass sell-off of gambling stocks on Monday. The online-only casino firm 888 Holdings (888) was hardest hit, losing nearly 14% of its value in a day, a slump that cut its market value by £91m. The largest fall in sterling terms was suffered by Ladbrokes’ owner, GVC Holdings (GVC), whose 10.5% fall equates to nearly £547m in lost value, overshadowing the Isle of Man-based firm’s announcement of a new chairman. William Hill (WMH) registered a £230m decline, Paddy Power Betfair’s owner, Flutter Entertainment (FLTR), £217.5m, and GameSys, which makes online slot machine games, £78m. |
| Ryanair Holdings (RYA) has warned there is “a real risk” it will have no Boeing 737 Max planes flying next summer because of further delays to the delivery of the grounded aircraft. Europe’s biggest carrier is sticking to its plans to cut bases and pilot and cabin crew jobs and said it expected to receive its first 737 Max planes in March or April 2020, two months later than expected. The 737 Max remains grounded worldwide after two crashes in Indonesia and Ethiopia killed 346 people. Ryanair’s chief executive, Michael O’Leary, said: “We have now reduced our expectation of 30 Max aircraft being delivered to us in advance of peak summer 2020 down to 20 aircraft and there is a real risk of none.” Ryanair reiterated that this would more than halve its passenger growth rate next summer to 3% from 7%, with the airline carrying 157 million people over the year as a whole rather than 162 million as previously planned. |
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