Hong Kong is under growing pressure to sweeten the terms of its £32bn offer for the London Stock Exchange Group (LSE) as a takeover battle for the British bourse intensifies. Executives from Hong Kong Exchanges and Clearing (HKEX) have launched a charm offensive with top LSE investors after its shock approach last week was snubbed by the group’s board. Without a higher price, shareholders are thought to be reluctant to seriously consider a deal. Top LSE shareholders told The Telegraph they will only entertain the move if they can be convinced that the LSE’s planned £22bn takeover of data provider Refinitiv is “absolute rubbish”, that regulators will approve the deal and that the bid is sweetened. One top shareholder said the bid “needs more of a cash element” to be taken seriously.
Britain’s biggest car dealership Pendragon (PDG) have crashed another 10% to new lows of less than 10p. The company hit the skids in June after new boss Mark Herbert lasted a paltry three months in the post. Chairman Chris Chambers had called Herbert “the ideal person to lead Pendragon through the next phase” after the departure of long-serving chief executive Trevor Finn, who had run the business since the 1980s. Now, after swinging to a big loss, Chambers is heading out the door too. That leaves Bill Berman, currently a non-executive director, trying to stop the whole thing careering off the road, as interim executive chairman. He has a hell of a job on his hands, and may find himself in the hotseat longer than hoped. Finding someone brave enough to sort out the mess will be no easy task.
A government-ordered investigation on national security grounds into the £4bn takeover of Cobham (COB) by a US private equity group is not expected to derail the deal. Analysts at Berenberg described Business Secretary Andrea Leadsom’s instruction that the Competition and Markets Authority (CMA) examine the takeover of the defence and aerospace company on public interest grounds as “being emotionally led”. They said that with 8% of Cobham’s work being for the UK military and only 15% of its staff based in Britain, they did “not believe that a UK national interest review will jeopardise the closing of this transaction”. The Government has the power to block the deal if it is found to put UK national security at risk or harm the country’s industrial footprint. Cobham, a specialist in air-to-air refuelling, has a swathe of contracts with the British military, including helping train RAF pilots, and the CMA probe is on security grounds.
The boss of Tesco (TSCO) has ruled out the sale of chlorine-washed chicken if the UK strikes new trade deals with the US after Brexit. Dave Lewis, who has been striving to turn the grocer’s fortunes around since joining in 2014, said: “There’s no US sourcing of chicken on my mind. Whatever the trade deals are … what we won’t do is give up our standards as we look at those opportunities. The feedback that comes back from the UK customer is ‘I prefer not to have it’. By and large, UK customers reject that idea.” Speaking at the FT Retail Summit in London on Wednesday, he added: “I’m not going to try to predict what [trade deals] are going to look like post-Brexit, when and how it happens. What I can say, the food standards around food safety, food security [in the UK] are among some of the best in the world.”
Pendragon (PDG) has plunged into the red and is cutting 300 jobs, blaming its troubles on “heightened political and Brexit uncertainty” for deterring buyers. Its troubles were compounded by the resignation of chairman Chris Chambers, which follows the shock departure in June of chief executive Mark Herbert just a few months into his tenure. Mr Herbert is understood to have left after a disagreement with the board over Pendragon’s strategy to concentrate on its used car business. Pendragon, which owns the Evans Halshaw and Stratstone dealer brands, posted a £32.2m pre-tax loss for the half year, reversing a £28.4m profit a year ago. Revenues dipped 0.8% to £2.47bn. The loss was blamed on an excess of second-hand cars, which forced the company to slash prices or sell at auction.
Shares in Sirius Minerals (SXX) tumbled another 5% on Wednesday as investors continued to absorb the news its $3bn (£2.4bn) funding plan for a fertiliser mine in Yorkshire had fallen through. The company lost half its value on Tuesday after it admitted it had failed to sell the junk bonds it needed to unlock its financing, and revealed it only had cash to last another six months. It is now seeking alternative funds or a partner to save the project. House broker Liberum said it remained a “firm believer” in the project but cut its target price for the shares to 9p. City watchdog the Financial Conduct Authority declined to comment on whether it was looking into a sharp share price move on Monday.
Games Workshop Group (GAW) put in a strong performance, rising 142p, to £48.16. The company, which is best known for its Warhammer tabletop games, announced it will pay a dividend of 35p per share after saying trading is on track to hit predictions in an update ahead of its annual general meeting yesterday. Peel Hunt analysts said: “There is a lot of positive momentum in the business, with increases in the number of trade accounts and hobby stores, new product launches and developments in live action and animation.” However, over a quarter of investors voted against the reappointment of chairman Nick Donaldson during its AGM, following what the company described as concerns over his “multiple board commitments”.
The new boss of B&Q’s owner could break up the company, its chairman said, as the retailer posted a slump in profits on Wednesday. “Thierry [Garnier] arrives with absolutely no handcuffs, we’ve asked him to come in and use his knowledge and experience to look at everything. He has complete freedom to decide what he brings to the board. I’m ruling nothing in or out at this point,” said Kingfisher (KGF) chairman Andy Cosslett when was asked if a break-up of the business might be on the cards. Mr Cosslett added: “He is being employed to come and help us understand how we make the most of the business and the assets we have. From now on, how we move forward and get some returns is very important because our investors have been very patient with us.”
Hargreaves Lansdown (HL.) has removed nine investor charges including controversial exit fees as it seeks to repair its reputation following its involvement in the Neil Woodford debacle, Telegraph Money can reveal. In the wake of the freezing of Mr Woodford’s giant Equity Income fund this newspaper called on the stockbroker – Britain’s largest – to let affected customers switch providers free of charge. It refused, but now in a u-turn it has decided that all investors will not be charged fees normally levied ostensibly to cover the cost of administrative tasks, including selling lines of stock or funds when moving money elsewhere. The move will save customers around £3m a year based on the rate of switches in the past. However, this number may be higher if investors who were previously financially deterred from leaving now choose to move.
Questor: a 5.7%pc government-backed yield – ‘We can’t make sense of the pricing anomaly’. Questor investment trust bargain: Triple Point Social Housing Reit (SOHO) – this social housing trust earns index-linked rents backed by the state, yet the shares have recently been pushed to a double-digit discount. Buy
