Ted Baker (TED) has hired headhunters to find a new chairman, paving the way for a shake-up of its top ranks after a catastrophic year that has plunged the fashion retailer into crisis. The company has appointed Korn Ferry to find a replacement for David Bernstein, 76, who joined the board in 2003 and became chairman in 2013. He took on an executive role in March after founder and chief executive Ray Kelvin was forced out amid allegations of sexual harassment, revealed by The Sunday Times, which he denies. Kelvin’s successor, Lindsay Page, whom Bernstein promoted from finance director, is under pressure after Ted Baker announced last week it had overstated the value of its stock by between £20m and £25m in prior years, heaping more misery on investors who have seen the value of their holdings plunge by three-quarters this year to 392p a share, or £174.7m. Ted Baker is scheduled to issue a trading update on Wednesday.
Standard Life Aberdeen (SLA) is monitoring its £1.3bn UK property fund closely after a wave of redemptions caused by fears over retail prompted rival M&G PLC (MNG) to gate its fund. Investors pulled money from property funds at the fastest rate so far this year last week, with £57m flowing out on Thursday alone, according to analysis firm Calastone. About £1.5bn has been withdrawn this year, more than in 2016, when so-called open-ended property funds were last suspended. Then, investors were spooked by the Brexit vote. Now they are reacting to the funds’ exposure to the high street and shopping centres. Almost 50% of the Aberdeen UK fund is invested in retail. Investors withdrew £31m from the Aberdeen fund on Wednesday, almost equal to the amount taken out over the previous four months.
Property tycoon Vincent Tchenguiz has amassed a stake in one of fallen stock-picker Neil Woodford’s funds as he looks to build his own technology empire. Tchenguiz has spent about £6m on a 2% stake in Woodford Patient Capital Trust (WPCT). WPCT’s share price has plunged by two-thirds in the past year, hit by the closure of Woodford’s flagship Income Fund and the demise of Woodford Investment Management. Its shares closed at 29.9p on Friday, giving it a market valuation of £268.9m. It raised £800m from investors when it launched in 2015.
Debenhams (DEB) has split with property director Clive Bentley, as the department store chain prepares to close 22 stores in the New Year. Bentley was hired to oversee Debenhams’ company voluntary arrangement (CVA), which survived a legal challenge backed by Sports Direct boss Mike Ashley. The billionaire lost an estimated £150m when Debenhams was taken over by its lenders in a debt-for-equity swap in April. The CVA inserted break clauses across Debenhams’ estate of 166 UK stores, meaning more closures are likely to follow next year. A Debenhams source said trading over Black Friday had been “pretty good”.
Just Eat (JE.) preferred bidder has raised the prospect of breaking up the food delivery service. Jitse Groen, chief executive and founder of Just Eat’s Dutch suitor Takeaway.com, has mooted the sale of its 33% stake in Brazilian delivery outfit iFood if Takeaway.com wins a takeover battle. Just Eat, which has a market value of £5.3bn, shares ownership of iFood with Naspers, the South African technology behemoth behind Prosus, which is seeking to gatecrash the Takeaway.com deal. Groen, who founded Takeaway.com 19 years ago, is planning an all-share merger with Just Eat worth 710p at the end of trading on Friday.
Tatton Asset Management (TAM) to set out on a buying spree. New restrictions on how financial advisers earn commission, and extra risk from Mifid II regulation, have driven a shift in the profession: many are now outsourcing stock-picking to online platforms that choose shares — sticking instead to providing actual advice, and retirement planning. This has driven a surge in the value of assets under management on investment platforms, which have doubled from £250bn to £500bn over the past five years. About £48bn sits in “model” portfolios, which offer a diversified selection of stocks with a set level of risk. Tatton Asset Management is in this sweet spot. Tatton’s model centres on signing up advisers who discuss with clients how much risk they want to take. About 10% of the 5,500 directly authorised advisory firms use Tatton. Assets under management grew by 22.8% year-on-year to £7bn. While Tatton is adding more advisers, it also hopes to sell more services to the ones it already has. Investing in Tatton is not without its risks. While revenues are expected to grow over the next five years, reaching an estimated £30m a year by 2024, Tatton has not yet weathered a downturn. However, Hogarth plans to embark on the acquisition trail, and if the trend towards these platforms continues, there could be further rewards ahead. Buy.
The shock gating of the £2.5 billion M&G Property Fund this week was triggered in part by a sell-off by fund managers within the wider M&G PLC (MNG) empire, The Times has learnt, raising questions about whether other investors now trapped in the fund should have been told. Prudential UK, the life company owned by M&G plc, sold off £124.5 million worth of units between May and October in response to the poor performance of the fund. That sell-off represents a large part of the £577 million of net redemptions by all customers of the fund in that period, which led to its shuttering on Wednesday.
Eddie Stobart Logistics (ESL) has secured a much-needed financial lifeline after its shareholders backed a rescue cash injection by its largest stakeholder in exchange for taking majority control. The agreement temporarily safeguards the jobs of about 6,600 Eddie Stobart employees and means that its 2,500 distinctive red, white and green lorries can continue to deliver goods over the busy Christmas trading period. It also brings to an end months of uncertainty about the fate of Eddie Stobart, whose shares have been suspended since the summer when an internal disagreement meant that it was unable to file its accounts by an end-of-August deadline. Failure to agree the rescue almost certainly would have pushed the company into administration.
The wealthiest member of the Church of Scientology has invested another $50 million in a small antibiotics developer listed in London. Bob Duggan, an American biotechnology billionaire, has poured the money into Summit Therapeutics (SUMM), which is working on ridinilazole, a potential new treatment for the Clostridium difficile bacterial infection, which can cause serious bowel problems. The drug is already in late-stage trials and the extra cash will fund the studies through to completion, with results due in the second half of 2021. Assuming that they are successful, the money also will help to start marketing and selling the drug, which could happen as early as 2023. Mr Duggan, 75, first invested in Summit this time last year and after his latest share purchase he will own a 72.8% stake in the company. His net worth is estimated at $2 billion, most of which came from selling Pharmacyclics, his biotechnology company, to Abbvie in 2015, a deal that netted him close to $3.5 billion.
A former regulator who approved the abortive bid for the London Stock Exchange Group in September and once triggered a row with pro-democracy protesters in Hong Kong has been elevated to head HSBC Holdings (HSBA) biggest division. Laura Cha has been appointed non-executive chairwoman of HSBC’s Hongkong and Shanghai Banking Corporation, a post left empty since John Flint, the chief executive of the group, was sacked in August. He had held the additional responsibility.
Phoenix Group Holdings (DI) (PHNX), Britain’s biggest consolidator of closed life and pension funds has swooped to buy a Swiss-owned rival for £3.2 billion, only months after its target abandoned plans for a float. The agreed cash-and-shares acquisition of Reassure by Phoenix Group yesterday marked the biggest takeover by Phoenix in its modern form. It also cements its position as the largest player in the consolidating markets of specialist life and retirement funds in Europe — and does so three months before Clive Bannister, its chief executive, is due to leave after a nine-year spell at the group. Mr Bannister, 61, joined in 2011 when Phoenix was labouring under unsustainable debts and had to be rescued by a group of investors led by hedge funds.
The competition regulator has warned that the £3 billion takeover of EI Group (EIG) by the owner of the Slug and Lettuce and Yates chains could push up prices for drinkers in 51 areas. Stonegate Pub Company and Ei Group, better known as Enterprise Inns, have been given until December 13 to suggest ways to address the concerns raised by the Competition and Markets Authority so that the regulator can approve the deal. It is expected that the pair will propose selling pubs to assuage the watchdog’s worries. The acquisition will face an in-depth investigation if their plan does not satisfy the regulator.
Half-year profit at Berkeley Group Holdings (The) (BKG) has tumbled by almost a third after the number of homes it sold fell sharply. Berkeley Group reported a 31% fall in pre-tax profit to £276.7 million for the six months to October 31. Revenue at the FTSE 100 constituent was down 43.7% to £930.9 million as the number of homes sold fell from 2,027 a year earlier to 1,389. The average selling price fell by 13% to £644,000. The fall was in line with the company’s guidance in June. It made a record profit of almost £1 billion last year, but said that it would not be able to repeat the performance because it would no longer benefit to the same extent from investments in sites acquired at bargain prices after the financial crisis.
