 | Chinese state media has seized on the rejection by the London Stock Exchange Group (LSE) of an unsolicited £30bn takeover bid by the Hong Kong bourse. The People’s Daily, a Communist Party mouthpiece, published a scathing commentary giving a laundry list of reasons as to why the LSE would rebuff Hong Kong Exchanges and Clearing (HKEX), given “persistent worries” over ongoing political unrest, a lack of strategic vision, and a lowball bid. LSE’s rejection is a sign that Hong Kong cannot break away from the mainland and develop on its own without the support of a China brimming with opportunities, according to the piece. It also praised the LSE for identifying its existing tie-up with the Shanghai Stock Exchange as its preferred way to access the market in China. The LSE “won’t worry about Shanghai … as long as China continues to rise, so will Shanghai”. |
 | Eddie Stobart Logistics (ESL) added to a lorry-load of woes by warning that profits would be “significantly below” expectations. The trucking operator also raised the spectre of tapping investors for cash after drawing down “more heavily” on its bank loans. The company’s shares have been suspended since last month after failing to publish its half-year results in time. Boss Alex Laffey quit with immediate effect as an accounting review was launched after a £2m error in its 2018 profits was identified. Last week, major investor DBAY Advisors made a preliminary approach to buy the company. On Monday Eddie Stobart, which was spun-off from Stobart Group as a separate listed company in 2017, said it had failed to deliver against “an ambitious budget” and had been forced into exiting a “problematic” contract. |
  | The global oil market after a devastating drone attack on Saudi Arabian production facilities dominated markets yesterday, sending European equities tumbling and ending a five-day winning streak for the continent’s top indices. The price of Brent crude spiked in the early minutes of Asian trading, but pulled back quickly to stand around 10% up throughout London trading. Saudi Arabia lost around half its production capacity – about 5% of the global supply – as a result of the attack, which the US has blamed on Iran. Even after surging, oil still stood around its mid-August levels, reflecting the steady drop it experienced throughout a summer period wracked by trade war doubts. Oil giants gained from the price increase BP (BP.) and Royal Dutch Shell ‘B’ (RDSB) rose 20.2p to 524.6p and 43p to £23.22 respectively. |
 | BT Group (BT.A) managed to also find a spot among the top risers, after chief executive Philip Jansen bought just under £1m worth of shares in a show of confidence in the business. |
 | Almost a fifth was wiped off software company Alfa Financial Software Holdings (ALFA) value after it warned profit would be “significantly below” earlier expectations due to customers stopping spending on “optional upgrades”. Alfa said that while its revenue looked set to dip to £31m in the first half of 2019, from £32.9m in the same period last year, its operating profit would plunge to £5m from £8.6m. This, together with one-off legal costs it expected to incur in the second half and pay hikes to ensure it could ward off attempts to poach talent, meant it would take the profits hit. The company said it was suffering with delays in a number of its projects as well as customers spending less on non-critical work and upgrades amid broader uncertainty. |
 | Questor: yes, a no-deal Brexit could knock Grafton Group Units (GFTU) – but these worries are in the price. Questor share tip: the valuation now looks tempting, especially in view of the builders’ merchant’s strong dividend record. Hold |
 | The founding family behind Cobham (COB) has renewed its call for the government to intervene in the £4 billion takeover of the British defence and aerospace company after failing to persuade shareholders to block the deal. While some small shareholders attacked Cobham’s board for striking the deal, their criticism was fruitless and came after almost all the voting had taken place by proxy last week. About 93.2% of shares that were voted were in favour of the deal, surpassing the 75% threshold that Advent needed. It was a blow to Lady Cobham, who has opposed the takeover and wrote to leading investors urging them to vote against the deal. |
 | Thomas Cook Group (TCG) has been given extra time to secure agreement on a crucial rescue deal now worth £1.1 billion — up from an original sum of £750 million. The travel group confirmed yesterday that tomorrow’s critical bondholder vote would now be held next Friday, with a court approval hearing being held on the following Monday. When the restructuring was announced on July 12, it envisaged an injection of £750 million in new funds led by Fosun International, of China. In August that was lifted by £150 million to ensure that the company had enough liquidity to see it through the winter. |
| The ambitious £32 billion takeover bid for London Stock Exchange Group (LSE) by its Hong Kong-based rival is under close scrutiny from the financial services industry watchdog. Andrew Bailey, chief executive of the Financial Conduct Authority, said yesterday that both LSE Group and Hong Kong Exchanges and Clearing had been “in close touch” with the regulator over their plans. “We’re listening, we’re observing,” Mr Bailey said, although he insisted that the watchdog had not yet formed a view of the potential deal. “If we do have to take a position, and of course we do have formal powers in that area, it can only be based on a firm proposition.” |
| The European Union is bracing itself for further tariffs from the United States within weeks as Washington prepares to launch the latest blow in a dispute over aircraft subsidies. American officials are understood to have received approval from the World Trade Organisation to impose retaliatory duties on a vast array of European exports as a result of the bloc’s subsidies for Airbus. The decision is due to be officially announced in a fortnight. While the EU’s own complaint regarding American subsidies for Boeing is also being examined at the WTO, this was lodged nine months later than the US complaint. The case has been in litigation at the WTO for well over a decade. | |
 | The former chief executive of Deutsche Bank is to replace Lord Livingston of Parkhead as chairman of Man Group (EMG). Lord Livingston, 55, said that he had taken a “personal decision” to stand down at the world’s largest listed hedge fund and that it was the “right timing” for the company. His replacement, John Cryan, was chief executive of Deutsche Bank until he was ousted last year amid infighting about how to restructure the bank. Investors reacted with uncertainty to the shake-up of the board. |
 | The unrest surrounding St James’s Place (STJ) spread from its clients to its investors yesterday after it emerged that the wealth manager would review perks such as cruises for its advisers. Its shares fell by 28p to close at £10.03 amid shareholder concerns that a radical shake-up to the rewards system and exit fees for customers may harm profitability, that clients could turn their back on the firm and that advisers frustrated at losing perks could leave for other wealth managers. Ian Gascoigne, its managing director, had told more than 700 of its advisers on a call last week that such benefits were up for review because there was a public perception that they could not be justified. |
 | Petra Diamonds Ltd.(DI) (PDL) reported a 22% fall in profits yesterday amid a sluggish market for the gems and “uncertainty” caused by US-China trade tensions. Richard Duffy, 55, who became chief executive of the group in February, said that the diamond market was at its weakest since the 2008 financial crisis. He said that the outlook for the market would be affected by further escalations of the trade battle between the United States and China, in which the two countries have impose tariffs on goods worth billions of dollars over the past year. “The diamond market gets impacted by global GDP growth and this is one of the macroeconomic factors that plays into the current negative narrative,” Mr Duffy said. Recent unrest in Hong Kong and concerns surrounding growth in some of the world’s leading economies are also among the wider headwinds facing the diamond market, the group said. |
| Profits are set to crash at Eddie Stobart Logistics (ESL), with Britain’s best-known trucking company seeking to raise cash from its bankers or investors. Share trading in Eddie Stobart has been suspended for more than three weeks after an internal row over the company’s accounting. That meant that it could not file its half-year accounts by a deadline at the end of August and led to the shock departure of its chief executive. Alex Laffey, 58, a former head of Tesco distribution, had been running Eddie Stobart for the past four years. With no sign of those interim results, which its guidance suggests will be 50% lower than had been expected, Eddie Stobart has warned that its full-year results to the end of November will be “significantly” down on forecasts of £63 million. |
 | Shares in Tullow Oil (TLW) surged by 8.4% after the explorer struck again off the coast of Guyana. The group said that its Joe exploration well had encountered high-quality oil-bearing rocks deep beneath the seabed off the coast of the South American country, which is a hotspot for the industry. The discovery comes on the back of Tullow’s success at the Jethro well off, also off Guyana, last month. The company has a stake in a third well due to be drilled nearby this month. Angus McCoss, its exploration director, said: “I am pleased that we have made back-to-back discoveries in Guyana and successfully opened a new, shallower play in the Upper Tertiary age of the Guyana basin with our second well.” |
 | Next (NXT) shares were in fashion yesterday after analysts at Credit Suisse took a more upbeat view on the clothes and homewares retailer before its half-year results later in the week. Credit Suisse upgraded its rating on Next to “neutral” and its target to £60 on the back of their sales performance, saying that the company had “consistently exceeded our expectations”. Yet the Swiss bank’s chin-strokers are reluctant to give much credit to Simon Wolfson, chief executive, and his team, preferring to point to the faults of rivals. “Collections have no doubt improved since the issues of 2017,” they said. “However, we also believe that the better retail performance and market share gains over the past two years is as much due to peers such as M&S, Debenhams and Arcadia underperforming and downsizing. This may well continue through the second half, given the financial pressure on some peers.” |
   | Airlines hit turbulence in the face of a possible rise in fuel prices and International Consolidated Airlines Group SA (CDI) (IAG), the British Airways owner, took a 12¼p blow to its share price, which fell to 445p, despite analysts’ claims that it was the most insulated from changes in fuel prices. Wizz Air Holdings (WIZZ) shares shed 177p to £33.72, easyJet (EZJ), the rival low-cost carrier, dipped 21½ points to £10.36. The surge in oil prices also raised fears of a global slowdown, leaving markets around the world lower. |
| Philip Jansen has taken advantage of BT Group (BT.A) depressed share price to pick up shares worth £1 million. The 52-year-old boss of the giant telecoms group snapped up 584,000 shares at 171p apiece, taking advantage of a stock price that hit eight-year lows a couple of weeks ago. |
 | Tempus – HGCapital Trust (HGT): Hold. Consistently strong returns underpinned by the high quality of its private equity investment manager |
 | Tempus – BBA Aviation (BBA): Hold. A leader in its field but the wider market is difficult |
| HKEX to woo London Stock Exchange Group (LSE) with appeal to shareholders. Asian exchange to launch three-week charm offensive to persuade board to soften stance |
 | Kingfisher (KGF) struggles to offload lossmaking units. Chief executive is unlikely to secure a sale before stepping down later this month |
| The American predator on the brink of snapping up British defence giant Cobham (COB) has slashed hundreds of jobs and extracted millions of pounds from other UK companies it has bought, The Mail on Sunday can reveal. Documents analysed by this newspaper show Advent International cut nearly 800 jobs last year at British firms – all within its first year of ownership – and paid itself a $300 million (£240 million) dividend from another firm. The revelations will spark fresh fears about Advent’s plans for Cobham on the eve of a crucial vote to determine the fate of the historic defence company. Advent, a US private equity giant, is trying to convince shareholders and critics including Lady Cobham – the daughter-in-law of Cobham’s founder – that it will be a responsible owner, preserve jobs and invest in the firm. But last night, Lady Cobham, who has urged Defence Secretary Ben Wallace and Business Secretary Andrea Leadsom to intervene, said The Mail on Sunday’s revelations about Advent’s recent track record should be a ‘deafening alarm bell’ for the Government. |
  | The investor made famous by the Hollywood movie The Big Short has placed bets against British banks Standard Chartered (STAN) and HSBC Holdings (HSBA) in a bid to cash in on the Hong Kong crisis. Eisman, who made his name betting that the US housing market would crash just before the financial crisis of 2008-9, said both were bets on the ‘risks in Hong Kong’ and rising violence in the former British colony. His newly formed Absolute Alpha Fund has taken out a short position worth about £1.4 million against Standard Chartered, according to analysts at short-selling expert Breakout Point. It is one of the fund’s largest short positions – a trading tactic where investors borrow shares from another for a fee, sell them, and hope to buy them back later at a lower price, pocketing the difference before they are returned to their original owner. |
 | Small shareholders have been urged to try to oust the chairman of the only large public firm never to have had a woman on its board. Three influential advisory bodies have told investors in Daejan Holdings (DJAN) to vote against chairman Benzion Freshwater at Tuesday’s shareholder meeting. But Daejan said investor discontent ‘doesn’t really make too much difference’, because the founding family controls 79.5% of the stock. Daejan is locked in a bitter row with Government diversity tsars, who say its top table is effectively ‘closed to women’. The number of FTSE350 boards without a woman on them has fallen to almost zero, having stood at 150 in 2010, yet the Government’s Hampton-Alexander Review body has found it impossible to convince Daejan to act. |
 | Barclays (BARC) boss Jes Staley will meet Edward Bramson this week for the first time since the corporate raider’s failed bid to secure a seat on the bank’s board. Staley is understood to be keen to try to persuade Bramson to sell his 5.5% stake in Barclays and leave the bank in peace. The meeting is likely to be tense after Bramson – a 68-year-old London-born investor who owns luxury homes in New York and Connecticut – branded Staley’s strategy ‘destructive’ last week. Bramson has repeatedly urged Barclays to scale back its investment bank in a move he claims would boost profits and the share price. Staley has resisted, insisting Barclays should retain an investment banking arm alongside its retail and corporate banking interests. |
 | MIDAS SHARE TIPS: Here’s a VERY hot tip – Filta fryer cleaner firm that reuses fat, and can cash in on chips! Midas verdict: Filta Group Holdings (FLTA) shares topped £2.80 a year ago. Last week, they closed at £1.56, partly reflecting market disillusion with smaller firms and partly reflecting concerns that the Watbio integration has taken longer than expected. The slump is overdone. Filta is an attractive business in a growing sector and the shares should rebound. Sayers himself owns 48% of the company so he is certainly motivated to make it work. The group even has a ‘green’ element. Buy. |
| Petrol prices are expected jump at least five pence per gallon in the wake of surprise missile attacks on crucial Saudi oil refineries, with further hikes in the pipeline if emergency engineering works cannot contain the threat to global energy supplies. Markets are braced for a spike in the cost of crude tomorrow, and analysts expect the costs of the crisis to be felt at the pumps almost immediately. Ashley Kelty, an oil and gas analyst at Cantor Fitzgerald, said he would expect petrol prices to jump “at least 5p per gallon in the coming days and further hikes to come as news comes out on the longer term impact of the Saudi outage”. Two crucial facilities run by state-owned Saudi Aramco were shut down by missiles launched from drones on Saturday. The loss of the Khurais oil field and nearby Abqaiq oil processing facility, which is one of the largest in the world, has cut the Kingdom’s production capacity by half. The strikes took out about 5.7 million barrels of oil per day of output, equal to around 5% of global supply. Figures released in August suggested Saudi Arabia’s total production stood at just under 10 million barrels per day. | |
| Thomas Cook Group (TCG) has secured an extra week to hammer out a £1.1bn rescue deal, as debt speculators pile pressure on the troubled holiday company. A meeting had been scheduled for Wednesday to agree terms but is set to be pushed back until next week as Thomas Cook battles to survive. The rescue deal needs the support of 75% of creditors to go ahead. Hedge funds are thought to control enough of Thomas Cook’s bonds to block the rescue and are pushing for a default unless their demands are met. Concerns are growing the world’s oldest tour operator could collapse, with hundreds of thousands of holidaymakers facing uncertainty unless it can strike a deal. Regulators at the Civil Aviation Authority are making contingency plans for what would likely be the biggest ever repatriation of British holidaymakers trapped overseas if an agreement cannot be struck. |
| The former business secretary Sir Vince Cable has attacked opponents of Hong Kong Exchanges and Clearing’s approach for the London Stock Exchange Group (LSE) as “bash the Chinese” enthusiasts, describing it as a “perfectly sensible proposition”. HKEX made a £32 billion unsolicited approach last week, sparking concerns about Chinese interference in critical market infrastructure and leading to comparisons with the controversy over Huaweii building 5G telecoms networks. Trillions of dollars’ worth of trades are made over LSE-owned exchanges. HKEX is 6% owned by the Hong Kong government, which appoints six of the 13 directors including the chairwoman. Don Robert, chairman of LSEG, said on Friday that HKEX’s “relationship with the Hong Kong government will complicate matters”. US regulators are watching closely because about 90 per cent of US interest rate swaps are cleared in London. |
| The price of oil surged to more than $70 a barrel last night after the attack on two oil facilities in Saudi Arabia. Brent crude rose 18% to $70.97 and West Texas Intermediate jumped 12% to $61.50 in one of the biggest moves in oil markets in years. Analysts believe that the attack on two oilfields in Saudi Arabia may harm the flotation of Saudi Aramco, the state-controlled oil giant. They also predicted that oil could hit $100 a barrel, throwing world energy markets into disarray if supply is significantly reduced as a result of the attacks on Abqaiq, the world’s largest oil processing facility, and the Khurais oilfield. The damage, thought to have been caused by drones, cut production by half and disrupted the daily global oil supply by up to 5%. | |
 | A major IT upgrade to help National Grid (NG.) to keep the lights on and cut costs to consumers is running six years late and is still not working properly. The energy company has spent more than £100 million on the electricity balancing system (EBS) that was due to start up in 2013. The new system was supposed to automatically instruct power plants to fire up when needed, replacing the “essentially manual” 1980s system. However it is still not fully functioning, raising questions about how effectively National Grid is managing Britain’s energy security. |
| Michael Spencer, the City veteran and former Tory party treasurer, has put £5 million behind a disrupter wealth management business founded by Charlotte Ransom, a former Goldman Sachs banker. Riding the wave of companies such as Monzo and Pension Bee that are digitising how people bank, save and track their pensions, Netwealth, founded four years ago, is challenging older wealth managers such as Rathbone, a timber and cotton trader until 1912, and Cazenove, set up in 1823, by providing an online asset management tool that it claims boosts transparency in investing. Clients can log into Netwealth’s mobile app to track the performance of their individual holdings or meet an adviser. They can also club together in “networks” of up to eight friends or family members and pay lower collective fees; about 70% of Netwealth’s clients do so. Although the minimum investment is £50,000, Netwealth’s average asset size is £400,000. |
 | Ovo is set to become the UK’s second largest energy provider after it agreed to buy SSE’s retail business for £500million. SSE (SSE) is currently the third largest energy provider, supplying around 3.5million households across the UK. Ovo entered the market as a relative minnow, but has already grown to become the UK’s largest independent supplier, providing energy to 1.5million customers. After taking on SSE’s customers, it will have a customer base of around 5million people, making it second only to British Gas. The transaction is expected to be completed in late 2019 or early 2020 with SSE saying it will do everything to make sure it is a ‘smooth transaction’ for existing customers. |
 | Wetherspoon (J.D.) (JDW) said it had continued to perform well since the year end, with comparable sales up 5.9% in the six weeks to September 8. Wetherspoons chairman, Tim Martin claimed a no-deal Brexit could provide a massive boost to the pub industry as people go out to celebrate. He said: ‘I think sales will jump dramatically in our pubs if we leave the EU – even if we leave the EU without a deal on October 31. ‘People will be so pleased that we’ve left and I think even people who don’t want to leave will think “thank god we’ve left and can talk about something else”.’ Martin said: ‘Despite continuing political problems … Wetherspoon continues to perform well. Like-for-like sales for the six weeks to 8 September 2019 were up 5.9%. In a statement released along with the annual results, Martin claimed: ‘the UK is clearly in political deadlock, parliament having refused to carry out the pre-referendum promise… sent to every household which said: “The Government will implement what you decide.” ‘Democratic power in the UK in the last 30 years has been diluted by a political faction in parliament, the media and boardrooms, which has a quasi-religious believe in the undemocratic EU – with its unelected presidents, MEPs who cannot instigate legislation and an unaccountable court. Voters resent this loss of power – and distrust of politicians and the “elite” is the result.’ In its annual results, Mr Martin said: ‘Elite Remainers are ignoring the “big picture”, regarding lower input costs and more democracy, and are mistakenly concentrating on assumed short-term problems, such as potential delays at Channel ports – which are easier to extrapolate on their computer models.’ |
 | Sainsbury (J) (SBRY) mortgage business could fetch £1.3bn if the grocer finds a buyer. The supermarket chain is in talks with advisers as it explores a sale of its mortgage book. A review of the company’s financial services arm was kick-started by Martin Scicluna after he joined as chairman last November. The Sunday Telegraph revealed last week that the supermarket chain was examining a major overhaul of the bank as it prepares to lay out a new strategy to City analysts and investors on Sept 25. Tesco bagged £3.8bn for its mortgage book from Lloyds earlier this month, just £100,000 more than its actual value. An industry source, however, said that Sainsbury’s could struggle to sell because its costs are too high, something the supermarket chain rejects. Sainsbury’s, led by chief executive Mike Coupe, is under pressure to get back on the front foot after its merger with Asda was knocked back by competition watchdogs in the spring. Sainsbury’s Bank has been weighing on the supermarket chain’s profits and consuming cash for years. It made a loss of £34m last year, compared to a profit of £25m the year before. |
| The Hong Kong stock exchange is set to go hostile with its £30bn bid for the London Stock Exchange Group (LSE) after its offer was rejected on Friday. LSE said earlier it had concerns about the key aspects of Hong Kong Exchanges and Clearing’s (HKEX) proposal, which had “fundamental flaws” around its structure and value. Hong Kong quickly fired back, arguing that the proposed deal represented “a highly compelling strategic opportunity to create a global market infrastructure leader”. HKEX bosses said they hoped to enter into a “constructive dialogue” with the LSE board and were “disappointed” that it had “declined to properly engage”. |
| Ovo Energy is buying SSE (SSE) retail business in a £500m deal that will make it one of Britain’s biggest energy businesses, but the founder of the challenger company has refused to rule out job cuts. Set up just a decade ago, Ovo supplies 1.5m households with electricity and has 2,000 staff. It will take on another 3.5m customers and 8,000 staff from SSE. In total it will have about 6.5m accounts, with some customers having more than one account. The acquisition will make Ovo the UK’s second-largest energy company, beaten only by British Gas. |
 | FirstGroup (FGP) is poised to offload part of its bus business to its own managers amid mounting industry concern of a shake-up by politicians. A string of management buyouts are said to be the frontrunners vying for First’s bus operations in Bristol, Dorset, Devon and Cornwall. A similar swoop by managers is also being pulled together in East Anglia. First put its entire UK bus arm up for sale earlier this year alongside North American coach arm Greyhound, following pressure from its biggest shareholders. The largest of these, activist Coast Capital Management, launched a campaign over the summer to oust half of the board. While Coast failed to attract majority shareholder support, First’s chairman and two other directors would later step down. Some investors want the company to also exit UK rail and concentrate on more profitable operations in the US. |
  | Two of Britain’s biggest road builders are hurtling towards a £250m legal showdown with the taxpayer over one of the contracts that broke Carillion. Balfour Beatty (BBY) and Galliford Try (GFRD) have until December to strike a deal with Scottish highways authorities over the construction of the Aberdeen bypass or else issue legal proceedings under the terms of the contract. Industry analyst Stephen Rawlinson said: “I can’t see why either party would want to settle.” The Aberdeen Western Peripheral Route was supposed to cost £745m but quickly spiralled out of control with the final bill well in excess of £1bn after series of delays. It was originally contracted to Balfour Beatty, Galliford Try and Carillion. The two companies took on commitments left by Carillion after it collapsed in January 2018. “That particular venture could have put Galliford Try out of business,” said Galliford Try boss Graham Prothero, adding that the claim against Transport Scotland “would be in the hundreds of millions”. “You’d rather negotiate,” he added. “[But] we’re realists and it may have to go through the legal route.” A Transport Scotland spokesman said: “The cost of the project remains at £745m. To date, Aberdeen Roads Limited has yet to provide sufficient evidence to substantiate its claim.” |
 | Questor: despite tough markets, there should be more in the tank for Inchcape (INCH). Hold. Questor share tip: the car distributor is redirecting its cash to where returns are best, while there is a decent 4% yield |
| Hong Kong’s stock exchange will turn its fire on data provider Refinitiv in an attempt to bear-hug the London Stock Exchange Group (LSE) and win investor support for its hostile £32bn takeover. Hong Kong Exchanges and Clearing (HKEX) is understood to be planning to undermine LSE’s case for buying Refinitiv, owned by private equity giant Blackstone and Thomson Reuters, by branding it a low-growth utility saddled with debt. “We’re looking for shareholders to understand how bad the Refinitiv deal is,” said a source, adding that it would rubbish the rival deal. “Refinitiv is a desk-top service . . . it’s not a data acquisition, it’s a terminal acquisition.” The onslaught is a crucial part of HKEX’s game-plan under chief executive Charles Li and chairwoman Laura Cha, after it made a cash-and-share offer worth £83.61 per LSE share last week. |
| The aviation watchdog is making contingency plans for the possible collapse of Thomas Cook Group (TCG) as the tour operator races to secure a £1.1bn rescue package. The Civil Aviation Authority (CAA) is on alert over the health of the airline and tour business, which serves about 22m customers a year. Its planning is believed to include the possibility of having to repatriate hundreds of thousands of passengers stranded abroad. Thomas Cook’s Air Travel Organiser’s Licence (Atol), which allows it to sell package holidays, is due for renewal on October 1. The tour operator is understood to have lined up insolvency experts from advisory firm AlixPartners, which is on standby should rescue talks with Chinese conglomerate Fosun and a clutch of lenders fail. AlixPartners has been working with Thomas Cook on tackling its debt pile. |
| Next (NXT) is expected to remain a bright spot in Britain’s battered retail sector as rising online sales counter tougher trading in shops. The high street bellwether is poised to post a 4% jump in full-price sales when it announces half-year results on Thursday. That rise will be underpinned by a 12% surge in online sales for the six months to July 27, with in-store non-discounted sales dropping 4% over the period. Shares in Next have soared 45% to £60.60 since the start of the year, valuing the chain at £8.1bn, as it has weathered the turmoil engulfing the retail sector better than its rivals. Chief executive Lord (Simon) Wolfson said in July that the decline in its bricks-and-mortar shops “hasn’t been nearly as bad as we thought”. |
 | Metro Bank (MTRO) has scrapped early termination fees for some commercial borrowers as it attempts to shift its lending towards residential property, after a mammoth accounting error sent its shares tumbling. The challenger bank is allowing commercial customers to pay off loans early, as it reduces exposure to corporate lending. In July, the bank sold back a portfolio of mortgage loans to Cerberus Capital Management for £521m. The challenger bank is seeking a new chairman after saying in July that 74-year-old American Hill would step down from the role. However, sources said his continued presence on the board could deter successors. Hill declined to comment. |
 | The American boss of Drax Group (DRX) has made several trips to Louisiana to investigate whether bagasse — a residue from sugar cane — could help fuel Drax’s power station in North Yorkshire more cheaply than the sawdust and tree thinnings that have replaced coal in four of its six turbines. His trips are urgent: the giant power station, which supplies up to 6% of the UK’s electricity, is dependent on subsidies that will end in 2027. While coal plants have been closing apace, Drax has clung on by swapping to wood chips. That may not last. The finite subsidies bring the business some £800m a year — a fifth of its £4.2bn revenue. One of its turbines is guaranteed £100 per megawatt hour (MWh), well above the current electricity wholesale price of £35 per MWh. “Biomass has a long-term role to play,” insists Gardiner, the former finance chief promoted to chief executive at the start of 2018, “but it has to be economically viable”. |
| The owner of Paddy Power and Betfair has defended itself over accusations that it groomed a problem gambler with football tickets and trips to the Grand National. Flutter Entertainment (FLTR) also said it was a “common occurrence” for deposits to be matched by bookmakers, after it was alleged to have put £20,000 into the account of a problem gambler to encourage him to bet more. Flutter is being sued in the High Court by Amarjeet Singh Dhir, a former business associate of Antonio Parente. Dhir claims he is owed £942,135. He alleges that Parente, a gambling addict, used money for property investments to feed his habit. | |
 | Activist fund Elliott Advisors faces a battle to convince investors of the merits of a break-up of insurer and cruise operator Saga (SAGA). The New York hedge fund took a 5% stake in the over-50s-serving conglomerate in July, and is understood to be pushing for the board to explore options that include selling either division. A source with knowledge of the situation said the insurance and travel arms “don’t need to stay together”. However, a top 10 Saga shareholder said a break-up was not the answer: “They need to stabilise the top line and invest in the brand. “They are in a very good population period. If they exploit the opportunities, that could be very powerful.” Analysts at Numis expect Saga to post a half-year pre-tax loss of £56.8m on Thursday, compared with a £106.8m profit last year. |
 | Distressed debt collector Arrow Global Group (ARW) has several hedge fund grizzlies shorting its shares, including Lansdowne Partners and Marshall Wace. A total of 8% of its shares are out on loan, according to Markit, making it one of the London market’s most shorted stocks. Among the weaknesses targeted by the bears is Arrow’s debt pile, with net debt levels 3.6 times adjusted earnings. Chief executive Lee Rochford has bowed to this pressure, committing to cut Arrow’s gearing by the end of the year to 3.5 times. The debt collector faces other challenges, including high costs and its attempt to broaden its business model. Arrow said last month that there is a “significant opportunity” for the group to grow in managing money for private equity and hedge funds, with European banks sitting on €800bn (£717bn) of non-performing loans. Analysts say asset management will yield lower profit margins but suck out less capital. The shorting is ominous, but cost-stripping and asset management growth provide hope for Arrow. Hold. |
| The group behind the London Stock Exchange has rejected the £32 billion takeover bid by its Hong Kong rival, calling it strategically flawed, unattractively structured and priced and with a strong possibility that it could be blocked by regulators. London Stock Exchange Group (LSE) said its board had unanimously rejected the approach from Hong Kong Exchanges and Clearing because of its “fundamental flaws”, adding that it “sees no merit in further engagement”. Don Robert, chairman of the London group, rebuked Laura Cha and Charles Li, chairwoman and chief executive of the Hong Kong group, for going public, in effect making their bid hostile. “We were very surprised and disappointed that you decided to publish your unsolicited proposal within two days of our receiving it,” he wrote in a letter alongside the rejection statement. |
| Cobham (COB) is on course to fall into the hands of its American suitor next week despite scepticism over the £4 billion offer. Sources said that the takeover by Advent International “looks set to go through” based on proxy voting before an extraordinary shareholder meeting on Monday. Some have been persuaded to accept the bid as Advent’s approach failed to flush out rival bidders. “We’ve voted for the bid, but with a heavy heart. We are surprised it didn’t prompt counter-offers,” a top ten shareholder said. |
| Aston Martin Holdings (AML) plans to tap the debt markets to bolster its battered balance sheet. The luxury carmaker wants to build up its cash buffers by issuing a junk bond. It is boosting its cash balance before the launch of its DBX sports utility vehicle next April. The financing, first reported by Bloomberg, is the latest setback for Aston Martin, which has lost 70% of its value since its £4 billion stock market debut. | |
| Ovo Energy has clinched a £500 million deal to acquire SSE (SSE) household supply arm, making it Britain’s second-largest supplier. The deal spells the end of the Big Six in their current form and continues the remarkable rise of Stephen Fitzpatrick, Ovo’s chief executive, who founded the upstart supplier a decade ago. Mr Fitzpatrick, 41, predicted the deal would form part of “a wave of consolidation and change across the whole of Europe” as utilities struggle to adapt to radical changes in the energy sector. Ovo will add SSE’s 3.5 million household customers to its 1.5 million. The Bristol company, which has 2,000 workers, will take on 8,000 SSE staff. Ovo is to pay £400 million in cash and £100 million in loan notes in the deal, which is expected to complete this year or early in 2020, subject to approval by the competition watchdog. |
 | Sir Charles Dunstone, executive chairman of TalkTalk Telecom Group (TALK), has increased his stake in the struggling telecoms group while its share price is at a near-record low. The billionaire is Talktalk’s largest shareholder, having spun it out of his Carphone Warehouse retail business a decade ago. After buying £10 million worth of shares in the past few days, he now owns 29.5% of Talktalk’s stock, taking him close to the threshold that would force him to make a formal takeover offer to other shareholders. |
| The Brexiteer chairman of Wetherspoon (J.D.) (JDW) renewed his attack on “elite Remainers” yesterday as he reported market-leading like-for-like sales growth for the full year but a fall in profits. Tim Martin announced a 7.4% rise in revenues to £1.81 billion in the year to the end of July, with like-for-like sales up 6.8%, which one analyst called “staggering”. Presenting the results he attributed the continuing strength of its like-for-like performance to myriad small measures, including bonuses for its staff, the design of its pubs, low food and drink prices and the introduction of coffee and breakfast. He also pointed to the impact of gin sales. “The bandwagon went past and we got on it — we now have 50 different gins.” he said. “Everyone is drinking gin. Even the guys from the building sites down the road are drinking pink gin with strawberries. It is quite a revolution.”Mr Martin compared the group’s prices with those of pub and restaurant rivals, saying that on a recent visit to a Pizza Express he was charged £13.95 for an American hot pizza and £7.55 for a bottle of Peroni. “In Wetherspoon it’s £6.49, including the Peroni!” |
 | Millennium & Copthorne Hotels (MLC) is to be taken private by its majority shareholder in a £2.23 billion deal, bringing down the curtain on its 23-year stint on the London Stock Exchange. Kwek Leng Beng, its Singapore-based chairman and 65.2% shareholder, declared his recommended 685p-a-share offer unconditional after securing backing from investors speaking for 58.3% of the shares that he does not already own. His offer, valuing the company at £2.9 billion, was launched in June, 18 months after an earlier bid pitched at 620p a share had been rejected by minority shareholders. |
 | Former HSBC Holdings (HSBA) forex chief loses appeal over US conviction. Case revolved around $3.5bn transaction for energy group Cairn Energy (CNE). |
| Hong Kong bourse eyes cash boost to London Stock Exchange Group (LSE) bid. HKEX is open to sweetening £32bn offer that also faces political obstacles |
 | Capita (CPI) to pay all employees living wage from 2020. Improvement comes as contractor seeks to overhaul image after profit warnings |
| Trainline Plc (TRN) driven by ticket sales on mobiles. Online booking group’s June IPO was second-largest in London this year | |
 | Morrison (Wm) Supermarkets (MRW) defies sales stalling with stronger than expected profits. Grocer’s earnings climb even as key measure of sales growth cools |
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