Mike Ashley abandons bid for Patisserie Valerie after two days. Mike Ashley called time on his interest in buying Patisserie Holdings (CAKE) yesterday only two days after showing his hand. The billionaire tycoon’s wrote to KPMG, the café chain’s administrators, claiming that it had made “a serious and substantial” offer of more than £15 million but had been told it needed to raise it to at least £18 million. In a letter seen by the Financial Times, Chris Wootton, deputy chief financial officer at Sports Direct, said the retailer had “not been allowed access to a data room, any financial information or meetings with management”. This had put it “at a serious disadvantage as a bidder”, the company said, adding that it could not raise its offer without access to proper due diligence.
Chairman of Imperial Brands to quit amid board reform. Imperial Brands (IMB) is expected to announce that Mark Williamson will step down as chairman of the tobacco group in the coming months on the back of the introduction of more stringent corporate governance rules. The Times understands that the cigarette maker has been engaged in succession planning over Mr Williamson’s tenure, which exceeds new guidance of nine years, and could soon confirm his resignation. At last week’s annual meeting in Bristol, shareholders speaking for almost 18 per cent of votes cast voted against his re-election, although much of the opposition is believed to have been due to fears of “overboarding” — taking on too many other boardroom posts — by the chairman.
A wave of investment needed to revive Britain’s shops and shopping centres is at risk because of a lack of transparency on retailers’ trading activity and financial strength, landlords have warned. A culture of mistrust between retailers and landlords, as well as increased scrutiny on property valuations and outdated tenant risk ratings, is stoking a “perfect storm” for retail landlords as they face falling footfall and rising store closures at a time when they need to invest more in shopping destinations to compete with online retailers.
The total amount of rent paid to landlords has fallen for the first time in more than a decade. Despite average rents rising by 0.4% last year, fewer people renting homes meant the total rent bill declined by £1.9 billion to £59.1 billion, according to Hamptons International. The estate agent is owned by Countrywide (CWD), the largest estate agency chain in Britain, and is deemed to have some of the UK’s most reliable property data. Its monthly lettings index tracks achieved rents across the 90,000 homes let and managed by Countrywide each year. The fall in the number of renters comes as more people have been buying homes, supported by the government’s Help to Buy scheme and a loosening of lending conditions. The number of mortgages issued to households last year rose by 5% to 6.9 million, the first time the figure has risen in a decade, according to the English Housing Survey. The number of households renting privately fell by 3.5% on the previous year to 4.5 million.
Legal & General Group (LGEN) backs data centre for tech businesses. Legal & General Capital has agreed to take a 50 per cent stake in a £230 million data centre campus that will serve life science and technology businesses along the London to Cambridge innovation corridor. The FTSE 100 investor has agreed a partnership with Goldacre Noé Group, the technology investor backed by the multimillionaire Noé family, to expand the Kao Data campus in Harlow, Essex. The formerly derelict site is named after the late Nobel prize winner Sir Charles Kao, whose work on fibre optics while working for Standard Telecommunications Laboratories, which previously occupied the site, paved the way for superfast broadband.
Don’t destroy us, Interserve chairman Glyn Barker warns hedge fund Coltrane. The chairman of Interserve (IRV) has urged the hedge fund trying to overthrow its board to engage in talks or risk a “really bad” outcome for the embattled cleaning and building company. Glyn Barker said its biggest shareholder, Coltrane Asset Management — which last week called a vote to replace most of the board — had refused to discuss its intentions, risking an even worse outcome for investors than the debt-for-equity swap that has been proposed. Barker, the former UK vice-chairman of accountancy firm PwC, has overseen Interserve’s implosion over the past three years.
Kate Swann’s SSP exit marred by pay revolt. The boss of airport and station food retailer SSP Group (SSPG) faces an investor backlash over her £6.2m pay packet as she prepares to bow out after six years. Kate Swann, 54, has been paid a total of £22.4m since she led the owner of baguette chain Upper Crust to a float in 2014. She still holds shares worth about £40.3m. The advisory groups ISS and Glass Lewis have urged shareholders to vote against SSP’s “excessive payouts” and bonuses that are tied to just one metric: the underlying operating profit.
Tycoon John Whittaker cuts stake in malls giant Hammerson (HMSO). John Whittaker nurses £70m loss on Hammerson shares. The secretive billionaire John Whittaker has sold part of his stake in Hammerson, the owner of shopping centres including Birmingham’s Bullring, after losing millions of pounds on his investment. Whittaker’s investment vehicle, Peel Holdings, has cut its stake in Hammerson from 4.6% to just under 4%. Whittaker, who is deputy chairman of rival Intu Properties — which unsuccessfully tried to merge with Hammerson last year — began amassing his stake two years ago. Since then Hammerson’s shares have fallen by a third to 374p, reducing the value of his holding by about £70m. The tycoon is cashing in part of his holding as his own finances come under pressure. While he is worth £2.3bn, according to The Sunday Times Rich List, research by analysts at Jefferies indicates that he has borrowed heavily against his 29.3% stake in Intu, whose share price has more than halved in little over a year.
RBS lines up £335m bonuses. Staff at Royal Bank of Scotland Group (RBS) are set to share a £335m bonus bonanza as the state-backed lender prepares to report a second straight year of profitability this week. Analysts expect RBS to post operating profits of £3.2bn, up from £2.2bn last year, when the bank presents full-year results on Friday. The £335m bonus pot is slightly smaller than the £342m shared last year, provoking anger among some senior staff. It would be the 10th consecutive year of bonus cuts following the £45.5bn rescue by the government in 2008. Sources told Sky News some were dissatisfied with the bonus reductions because they made it difficult to attract high-quality staff.
Broker Daniel Stewart folds after backers pull out. The troubled City broker Daniel Stewart has collapsed into administration after its Singaporean backers decided to pull the plug, writes Tommy Stubbington. The company made most of its more than 30 staff redundant earlier this month and its website has been replaced by a message saying it “will not be accepting any new client instructions for the foreseeable future”. The company filed for administration on Thursday. A source at the business said Epsilon Investments, the Singaporean family fund that had owned 90% of the broker, had decided not to support the business amid mounting losses. They said: “The backers decided it’s not viable to carry on. “There were two departments making money but corporate broking wasn’t doing well. The new investment was being used to pay salaries.”
Pascal Soriot feels heat after lieutenants desert Astra. AstraZeneca (AZN) is under pressure to allay investor anxiety over its management after the departure of four top executives. Shares in the drugs giant have flagged in recent weeks since the announcement that chief medical officer Sean Bohen was stepping down. His exit came as part of a research and development reshuffle that also included the departure of Mark Mallon, executive vice-president for global product and portfolio. Bohen joined Astra Zeneca in 2015 and was widely seen as a potential successor to chief executive Pascal Soriot. However, Soriot, 59, insists he has no immediate plans to leave while overseeing the restructuring of R&D into two units, one focused on cancer. The aim is to increase the number of commercial successes developed by the Anglo-Swedish company.
Online bingo owner Stride Gaming calls bankers for sale. The online gambling company behind Kitty Bingo and Bingo Extra has put itself up for sale. Stride Gaming (STR), which was fined £4m last September for “compliance failures”, is understood to have instructed bankers at its stockbroker Investec to find a buyer. Stride is listed on AIM and valued at £78.5m. The company, which was established in 2012, has an 11% share of the UK online bingo market, worth £2.8bn each year. Its chairman, Nigel Payne, is the former chief executive of Sportingbet. The resurgence of the game comes despite shrinking numbers attending traditional bingo halls.
Pearson has hard lessons to learn. Pearson (PSON) must now prove it can maintain printed-book revenues while shepherding customers into the digital era. The trends are challenging. Students are increasingly getting books when needed rather than at the start of each academic year. Also, Pearson is vulnerable to cuts in education funding, often dependent on political will. The shares have stabilised since their January blip and Pearson is trading on a forward price/earnings ratio of 15.7, similar to those of rivals Axel Springer and Relx. Barclays has an 830p target on the stock, while Citigroup has 975p. There may be a small uplift in the months ahead, but unless Pearson improves its earnings without relying on cost-cutting, it may be some time before there is any real uplift. Hold.
