John Whittaker, billionaire owner of Peel Group, in takeover bid for Intu. John Whittaker, the billionaire owner of Peel Group, is trying to orchestrate a multibillion-pound deal to take Intu Properties (INTU) private, only months after the shopping centre owner’s proposed merger with Hammerson failed. In a move that could trigger an auction for the struggling Intu, which owns the most valuable collection of shopping centres in Britain, Peel Group confirmed that it had formed a consortium for a potential bid with Olayan Group, a Saudi conglomerate, and Brookfield, a Canadian private equity group.
Funding Circle on downward spiral. Funding Circle (FCH) has suffered one of the worst first-week performances for a British float after shares in the peer-to-peer lender fell sharply again yesterday. Its stock fell by almost 7% to close at 340p, 100p below the price at which the company floated last Friday. It means that investors that bought into the £1.5 billion listing, including some of the biggest money managers in the City, are sitting on a paper loss of 22.7%
Electra Private Equity (ELTA) has kicked off a jumble sale of its remaining assets after agreeing the disposal of its investments in Photobox and Knight Square. The quoted investment trust said that the sale of its minority stakes in Photobox, the online photo-printing business, and Knight Square, a residential property manager and healthcare provider, to Lexington Partners, an American private equity firm, would bring shareholders dividends totalling £161 million.
A former investment banker who advised Fred Goodwin, the former Royal Bank of Scotland chief, on his catastrophic purchase of ABN Amro has been promoted to the main board of Legal & General Group (LGEN), one of the victims of the RBS collapse. Henrietta Baldock was named yesterday as a main board director of L&G and was appointed to its audit, risk, nominations and remuneration committees.
Shareholders of the Aim-listed Elegant Hotels Group (EHG) breathed a sigh of relief yesterday after recent market fears that it was preparing to issue a profit warning proved wide of the mark. The Caribbean luxury hotel operator, in which Luke Johnson, the leisure sector investor, has a 12.5% stake, said that recent tax changes in Barbados had not derailed its results for the 12 months to the end of last month. Shares of Elegant Hotels, which were floated at 100p in 2015, had fallen by almost a quarter since mid-May, but after the reassuring trading update they bounced 3.4% to 69p yesterday.
The fashion for high street retailers to bemoan the brutal trading environment for bricks and mortar stores has spread to Ted Baker (TED). The clothes chain, which for years has outperformed its rivals, reported a fall in interim pre-tax profits yesterday and warned of a challenging market. That sent its shares tumbling by more than 10 per cent to close at £20.76, down 232p. Ted Baker said that its pre-tax profit had dipped by 3.2% to £24.5 million in the 28 weeks to August 11, on group revenue that had risen by 3.5% to £306 million. It said that it expected the second half of the year to “remain challenging”.
Santander has launched its campaign to win a large grant from the Royal Bank of Scotland Group (RBS) £775 million fund to increase competition and innovation in business banking by making its 123 current account available for business customers. The Spanish bank is regarded as one of the most likely contenders. However, its choice would be controversial as it has about 10 per cent of the business current account market and held talks with RBS about buying part of its business that it was meant to divest under state aid rules, only for those negotiations to fall through.
Britain’s biggest furniture retailer shrugged off a near-50% fall in profits yesterday, with its outgoing boss saying that he was “super-delighted with the year that has just finished”. Pre-tax profits at DFS Furniture (DFS) of £25.8 million in the year to July 28 were dragged down by an exceptional downturn in demand in the final quarter of the year. The result was weaker than a pre-tax profit of £50 million the year before, which itself reflected a 22.3% fall from the £64.5 million profit reported in 2016. However, group revenue, including sales from recent acquisitions from rivals, was up by 14.1% at £870.5 million.
The chairman of BTG (BTG) is to leave after a wave of shareholder protests over concerns about his workload. Gary Watts, 61, has been chairman of the drugs company since January 2012 and is also chairman of Spire Healthcare, the private hospitals group, and Foxtons, the estate agent. All three London-listed companies are going through challenging periods and investors are concerned about “overboarding” by directors taking on too many roles.
Burberry Group (BRBY) was out of fashion yesterday as signs of weaker Chinese consumer demand and tighter customs controls at China’s airports fuelled a sell-off in the shares of European luxury goods companies. The Golden Week holiday at the beginning of October has become associated with big-spending Chinese tourists, but negative headlines about South Korea, a key destination, have put pressure on the luxury sector, analysts at JP Morgan noted. Arrivals of Chinese tourists at Incheon airport in South Korea were down 10% on the first day of the holiday. Burberry fell 115p to £19.13. Gucci’s owner Kering, which has cited softer Korean trading, fell 5.6% to €437.15; LVMH, the world’s largest trader of luxury goods, closed down 4.7% at €288.10.
Ocado Group (OCDO) fell to the bottom of the premier index after a large volume trade of 2.8 million shares in the online grocery retailer passed through at 903p shortly after 9.15am. Traders said that it had not been claimed by any broker, so appeared to have been a derivative-relative basket trade, rather than an institution selling a large number of shares, with similar trades seen to go through at Morrisons and Sainsbury’s at about the same time.
Ferrexpo (FXPO) was among the top gainers on the FTSE 250 after Barclays upgraded it to “overweight”. It rose 13½p to 223p.
BTG (BTG) rose 29p to 588p after the pharmaceuticals company upgraded its sales forecasts on the back of strong demand for its tumour-targeting medicines and the inclusion of sales of its varicose vein treatment. It may mark the start of a recovery for BTG’s shares, which have slumped by more than 22 per cent since the start of the year amid a trickle of negative news.
Spire is given a health warning. Investors in Spire Healthcare Group (SPI) were nursing a renewed sell-off in its stock yesterday. Spire tumbled further below the 210p at which Cinven, the private equity firm, floated it four years ago after Jefferies downgraded the private healthcare company to “underperform” and questioned whether its management’s key targets would be met.
Tempus – Kingfisher (KGF): Speculative buy. Either the turnaround plan will succeed, or if it fails a break-up should follow
Tempus – Electrocomponents (ECM): Buy. Promise of more growth and operational efficiency
