Sirius Minerals (SXX) has advised its shareholders to accept a £405 million takeover by Anglo American (AAL), calling it the “only feasible option” to save its North Yorkshire mining project. Sirius said that it deeply regretted being unable to fund the mine itself, but it warned that if Anglo’s offer was not accepted there was “a high probability” that it would fall into administration. The proposed deal, which requires the approval of 75% of shareholders, should save hundreds of jobs at Sirius Minerals’s North Yorkshire mine and its processing site on Teesside. Mark Cutifani, Anglo’s chief executive, said that its intentions were “preserving and creating jobs, not cutting them”. Chris Fraser, Sirius’s chief executive, and other senior management will move to Anglo for at least 12 months.
BAE Systems (BA.) has bought two American businesses for a combined $2.2 billion in its biggest deal for more than a decade. The British defence company has agreed to acquire a military global positioning system business from Collins Aerospace for $1.9 billion and a tactical radios division from Raytheon for $275 million. The two are being offloaded as part of a $120 billion merger between United Technologies Corporation, which owns Collins Aerospace, and Raytheon. Analysts said that the acquisitions were expensive and opportunistic, but were of a high quality and would boost earnings and cash.
Fevertree Drinks (FEVR) was being tipped as a potential bid target last night after a warning over poor Christmas trading sent its shares tumbling by more than a quarter. After five years of beating City expectations, followed by one modest downgrade last November, the premium tonic maker issued its first fully fledged profit warning and the resulting 542p slump in its shares to £14.53 wiped £630 million from its market value. Analysts mulled over the possibility that it could become attractive to the big soft drinks groups. Edward Mundy at Jefferies, the investment bank, said: “The debate on whether ‘big soda’ may look to add Fevertree to strengthen the portfolio offering within the premium mixers sub-category may start to resurface.”
Robert Bonnier, 50, made a name for himself as the former chief executive of Scoot, an online directory valued at more than £2.5 billion during the dotcom boom. It has emerged that he has links with , until recently listed on the Nex exchange, which has been buying shares in Sentiance, an automated intelligence company based in Antwerp. It was planning to take a majority stake and to submit a draft prospectus to the Financial Conduct Authority to seek admission to the London Stock Exchange’s main market, but missed a deal deadline. Mr Bonnier does not appear to be directly involved in Mesh, but Nashida Islam Bonnier, his wife, is the largest shareholder, with a stake of almost 10%. Other investors include Chris Akers, who sold Sports Internet Group to Sky for £300 million in 2000. He holds 3%. Mr Akers worked with Mr Bonnier at Swiss Bank Corporation and introduced him to Scoot’s founder.
Housebuilders have been warned they could be stripped of their right to sell Help to Buy homes if they use advertising to make buyers feel time pressured to complete purchases before the current scheme ends next year. Homes England, the government’s housing agency, has written to developers to tell them that advertising “must not use any form of wording that might make potential customers think there is a reason to feel time pressured into making their first home purchase.” A spokeswoman said: “We have always had adherence to advertising guidelines included as a condition of the equity loan funding agreement and all developers are aware that failure to comply with this — and with advertising regulations under the Consumer Credit Act — risks them being suspended from the scheme.” She said housebuilders have been reminded that advertising, marketing and promoting of Help to Buy must be “clear, fair and not misleading” at all times.
Intu Properties (INTU) the debt-laden owner of the Trafford Centre in Manchester and Lakeside in Essex is in talks to raise emergency cash next month in what will be a big test of investors’ appetite for retail property. Intu Properties said that it was discussing with shareholders and potential investors how it might secure new funds by the end of next month. The announcement was prompted by a report in The Sunday Times. Intu did not confirm how much it was seeking to raise, but analysts expect that it will be at least £1 billion.
Analysts at Morgan Stankley issued a gloomy note on ASOS (ASC) yesterday, saying that expectations for a quick recovery from a bad year were too optimistic. Asos’s challenges were greater than many realised, they said, driven by the eye-watering rate of returns that bedevil lots of online retailers, as well as slowing growth in buying clothing over the internet. Shares in Asos should trade at about £20, according to Morgan Stanley, a big discount to the £30.35 at which they closed last night. Its team said that Asos was expected to deliver healthy growth in its most recent quarter when it reports on Thursday, but that didn’t change the picture that it would fall short of present growth expectations for the next few years.
M&C Saatchi (SAA) has tried to reassure investors by saying that it had a net cash position of at least £15 million at the end of last year. The advertising group said in a statement yesterday that this was ahead of expectations after the “implementation of improved cash collection processes”. M&C Saatchi said that pre-tax profit was in line with previous forecasts. That is likely to mean a drop of up to 27% year-on-year. New non-executive directors would be announced soon, it said. Analysts at Peel Hunt said that the cash update was encouraging, but they wanted to see evidence of the board being rebuilt.
Tempus – Worldwide Healthcare Trust (WWH): Hold. High-quality investor in a dynamic market sector but made less attractive by its low yield
Tempus – XP Power Ltd. (DI) (XPP): Avoid. Solid business with growth prospects but the shares are well priced
