The Hong Kong stock exchange is facing an uphill battle to win backing for its London Stock Exchange Group (LSE) bid after investors failed to show support for the near-£30bn offer. Hong Kong Exchanges and Clearing’s (HKEX) shock announcement on Wednesday morning pushed shares in LSE up 9% initially before closing 5.9% higher at £72.06. That is some distance from the cash-and shares offer of £83.61, which marked a near-23% premium on Tuesday’s closing price, suggesting scepticism about the prospect of the deal going ahead. The potential tie-up, which is understood to have caught LSE bosses “off-guard”, could also pose a political headache for the Government as it struggles to quash concerns about the influence of China on British business following the Huawei row earlier this year. Business Secretary Andrea Leadsom’s comments that the Government would “look very carefully at anything that had security implications for the UK” were later echoed by the Treasury.
tycoon Mike Ashley faced a backlash from investors at its annual meeting over his role at the helm of the company amid fresh uncertainty about the retailer’s auditor. Almost a quarter of investors voted against Mr Ashley as chief executive after the billionaire’s own 62% stake in the business is stripped out. He was nevertheless re-elected to the board. Three influential City corporate governance bodies – Pirc, ISS and Glass Lewis – had called on Sports Direct’s shareholders to vote against the re-appointment of the tycoon. About 9% of investors followed suit, similarly to last year’s vote, to replace Mr Ashley. “Before anybody thinks anything, my wealth is in that strategy,” Mr Ashley said. “Not a fraction of it – 60% of that share price is one individual who, by the way, doesn’t get a dividend and doesn’t get paid and he’s bet the farm on this and he’s not going to back down until he wins.”
ITV (ITV) had a shaky day on the markets, holding moderate gains after a note by Berenberg analysts led by Sarah Simon said they were taking an “increasingly bearish” view of the broadcaster as the streaming market grows increasingly competitive. The company and the BBC are still preparing to launch their much-hyped collaboration, Britbox. The service will be born into an increasingly hostile world. On Tuesday night, Apple unveiled its own streaming service, priced to undercut rivals such as Netflix. That sent a chill through the share prices of other media companies. “Against this backdrop, Britbox’s proposed £5.99 a month price point looks uncompelling, particularly given the massive gap in terms of programming expenditure,” the analysts wrote. They added: “Against the backdrop of these well-funded services with aggressive pricing, we do not see a strong rationale for take-up of Britbox. The budget for original programming will inevitably be small (£100m) against multibillions for the US-backed services.” The analysts said the risks for ITV are “rising”, saying: “we believe Britbox faces a major challenge, akin to that which ITV Digital faced nearly 20 years ago: a David-versus-Goliath situation, in which Goliath (Sky) won the fight.” They speculated that failure in such a situation would likely result in Britbox being shelved, but kept a “hold” rating on its shares. There is the chance of a bigger shake-up, however. Markets.com’s Neil Wilson, suggested ITV could well end up being the target of takeover activity if a foreign buyer wants to take advantage of a weak pound. “We think there could now be a rush for other UK-listed companies in the coming weeks – old favourites like ITV and Imperial Brands are among those to watch but there are plenty more besides.”
The marketing venture set up by Sir Martin Sorrell a month after his departure from WPP is on course to double in size by 2021, as clients continue to direct spending towards technology companies. S4 Capital (SFOR), formed in May 2018, said based on estimates for if it had been fully operational the prior year, revenues would have been up 42% at £88m year on year in the first six months of 2019. Its gross profit would have been up 40%, although a substantial increase in its staff numbers, and the subsequent rise in costs, meant it slipped to an operating loss of £6.2m. The prior year, it would have posted an operating profit of £12.2m. Sir Martin said it was an “investment in headcount in anticipation of a very strong growth rate”. It said the results put it “in line with its target of doubling the size of the company organically by 2021”. Sir Martin said the plan was to continue growing the company organically, through bulking up its client base and through acquisitions.
Former Stobart chair Iain Ferguson has been appointed as non-executive chairman of housebuilding company Crest Nicholson Holdings (CRST), completing an overhaul of the housebuilder’s top two jobs. His appointment comes as Peter Truscott, poached from rival Galliford Try, starts as Crest Nicholson chief executive this month. Mr Ferguson will lead the Crest Nicholson board from November. The appointment comes after he survived a bruising board battle at Stobart last year, when he fended off an attempt to unseat him by the company’s former boss Andrew Tinkler, who had sought to replace him with billionaire retail tycoon Philip Day.
Galliford Try (GFRD) once again blamed its delayed Aberdeen road project for a fall in profits a day after it revealed it was trying to resurrect a housebuilding tie-up with rival Bovis. Profits fell to £104.7m from £143.7m for the year to the end of June, while revenues edged down from £2.9bn to £2.7bn. The FTSE 250 construction firm had to foot another £26m bill to complete the Aberdeen Western Peripheral Route, which has now been finalised, as well as other one-off charges worth £24m. Stripping these out, pre-tax profit was in line with expectations at £155.5m, down from £188.7m last year.
Its housebuilding arm, which will be merged with that of Bovis in a £1bn deal if all goes to plan, built 6,057 new homes, a slight fall on the year before.
