Thomas Cook Group (TCG) battle to avert collapse has been dealt a blow after lenders asked for an extra £200m injection. A 17-strong banking syndicate led by Royal Bank of Scotland have asked for an additional £200m of additional underwritten funds despite the company being in the final throes of restructuring led by Chinese conglomerate Fosun. The request is understood to have angered those at the company with insiders believing that RBS is forcing the 178-year-old firm towards collapse. RBS rejected such suggestions, saying it had provided “considerable support to Thomas Cook over many years” and was continuing to work with other stakeholders to find a resolution. Thomas Cook delayed a vote on its planned restructuring earlier this week. At the time it had been thought this was after it struggled to get approval from 75% of creditors. However, sources said late on Thursday that the reason for the delay was the additional money request. In August Thomas Cook announced that “substantial agreement regarding key commercial terms” had been reached.
The competition watchdog said JD Sports Fashion (JD.) £90m takeover of Footasylum (FOOT) could lead to “higher prices” and “worse choice” for shoppers, but fell short of explaining its reasons in more detail. On Thursday it said it may examine the merger in more detail unless JD Sports acted on some of its concerns. The retailer now has five days to take up the CMA’s recommendations. JD Sports defended the deal and said there would be “significant operational and strategic benefits” from the union. One industry observer said that buying Footasylum’s 70-odd stores was not significant enough to reduce competition and JD Sports’ £2bn sales dwarfed Footasylum’s revenues of £200m. But one competition lawyer said: “To be honest, the CMA doesn’t really care that one part is smaller than the other [if they’re competitors]. I’ve seen it get agitated before over much smaller deals.”
Almost half of Ryanair Holdings (RYA) shareholders voted against the airline’s plan to hand Michael O’Leary a bonus package that could earn him up to €99m (£87m). The remuneration scheme, which requires the long-serving chief executive to either double profits or share price of the low-cost carrier within five years, was approved by just 50.5% of votes. It means Mr O’Leary could still be in line for one of the biggest payouts in British corporate history, despite a tumultuous year for the company. Intense competition and an oversupply of seats in the European market have squeezed Ryanair, forcing it to issue a series of profit warnings over the past year. It has also been hit by uncertainty surrounding Brexit and has blamed the delay in the delivery of its fleet of Boeing 737 Max planes for axing 900 jobs. The aircraft remains grounded amid safety concerns following the deaths of 346 people in two crashes.
Kier Group (KIE) “is absolutely not the next Carillion”, the boss of the struggling construction and services business insisted, despite crashing to a £245m annual loss and announcing the chairman’s departure after just two years. Andrew Davies, chief executive of the company that works on infrastructure projects such as Crossrail and HS2 and provides environmental services such rubbish collection, issued the denial amid ongoing concern about Kier’s stability. Carrillion’s collapse last year and Interserve falling into the hands of its lenders in the spring have raised questions about the future of their peers. Kier was already under pressure after a £250m emergency cash call in 2018 resulted in just 38% of investors participating, requiring bankers to bail it out. Mr Davies, who was appointed in April, has accelerated a rescue plan which aims to get the company back on track.
The boss of the London Stock Exchange Group (LSE) mounted a staunch defence of its £22bn takeover of data business Refinitiv in his first public comments since the Hong Kong exchange launched an audacious bid for his company. David Schwimmer said the Refinitiv deal, which was only announced last month, was a transaction LSE felt “very good about” because it was “a very strong fit strategically”. Refinitiv would help LSE take advantage of the “increasing importance” of data and analytics, and open up new asset classes such as foreign exchange and fast track its entry into “dozens” of emerging markets, the LSE chief told a conference in London. Mr Schwimmer would not be drawn further on last week’s audacious £32bn bid for the LSE from Hong Kong Exchanges and Clearing (HKEX), an offer it rejected on Friday and called “fundamentally flawed”.
tycoon Mike Ashley was criticised by a judge after his attempt to derail a rescue plan for Debenhams (DEB) was thrown out of court. Mr Justice Norris on Thursday rejected a challenge to the department store’s company voluntary arrangement (CVA) by Combined Property Control Group, which owns six of the properties Debenhams lets. The landlord had complained that it was treated unfairly as a creditor, and its challenge was bankrolled by Mr Ashley’s Sports Direct, which dropped its own legal challenge against Debenhams in July. The collapse of the legal challenge means that Debenhams’ rescue plan can go ahead. In May it won the approval of its creditors, including most of its landlords, to close 50 of its 166 UK stores, and secured rent cuts on others. Most stores in the UK are expected to stay open until after Christmas, when it makes a big chunk of its money.
International Consolidated Airlines Group SA (CDI) (IAG) was a riser, after Morgan Stanley analysts tipped the British Airways-owner as the trend-bucking positive amid a gloomy assessment of European airlines. Analysts at the US investment bank said air firms had been poor investments over the past two years, and warned the rest of the sector is not yet ripe for buying. Its shares were also buoyed by news that the pilots’ union Balpa said it would delay planned strikes that were set to interrupt BA’s service.
Next (NXT) will “continue to prosper” despite the brutal conditions crippling some of its high street rivals, its boss said as the fashion chain reported higher sales and profits. Simon Wolfson said that although he had concerns about fewer people buying clothes and shoes in stores, “as long as that decline is matched by growth online, we think we can get through it”. He added: “It is not going to be painless but with the speed that rents are coming down and the relatively short-term leases being offered we can see a way of managing that decline in such a way that the group continues to prosper.” Lord Wolfson, a prominent Brexit supporter, also said that Next could cut prices by about 2% if there was a disorderly departure due to lower temporary taxes on some products.
Fund shops, wealth managers and others around the financial industry are coming under pressure to remove punitive exit fees after the Telegraph revealed Hargreaves Lansdown (HL.), Britain’s biggest broker, had done so this week. Fund shops AJ Bell (AJB) and The Share Centre, which both charge customers an exit fee, said they did not have plans to remove these. Perhaps the loudest call landed at the feet of St James’s Place (STJ), Britain’s largest wealth manager. The firm levies investors an “early withdrawal charge” for its pensions and bonds, which is only charged if a customer leaves within six years. If the client withdraws funds within the first year, there is a 6% fee. This falls by one percentage point every year until it reaches 1% in year six. This in addition to a 1.5% annual ongoing charge, which includes the cost of advice given by SJP’s advisers.
Royal Mail (RMG) was part of a cartel that meant customers paid over the odds for parcel deliveries for more than four years. Regulator Ofcom said Royal Mail worked with SaleGroup, a reseller of delivery services, on an “illegal anti-competitive agreement”, which meant they did not compete for each other’s customers. SaleGroup is an online business that arranges deliveries for small and medium-sized business customers by sourcing multiple parcel operators, rather than carrying out deliveries itself. Royal Mail’s Parcelforce division and SaleGroup, trading as Despatch Bay, agreed a deal whereby they shared information on customers between August 2013 and May 2018. The arrangement meant the companies could avoid battling for work, and they even emailed each other, with one asking the other to withdraw quotes to certain customers, often when the rival offer was cheaper.
Questor: OneSavings Bank (OSB) is growing fast, low-risk and ‘shockingly cheap’. If you have cash, buy. Questor Income Portfolio: the buy-to-let lender operates in the fast-growing ‘professional’ part of the market and shies away from risky low-deposit loans
