Standard Chartered, led by Bill Winters, eyes $1bn buyback. Bank woos battered investors after deal over Iran sanctions. Standard Chartered (STAN) is preparing to shower long-suffering shareholders with a bumper cash return of more than $1bn through its first share buyback programme in nearly two decades. Analysts say that the emerging markets-focused bank, led by American Bill Winters, has triggered plans for the bonanza after paying $1.1bn (£850m) to authorities in the US and Britain to settle charges of violating sanctions against Iran. Banks need approval from the Prudential Regulation Authority before they can dish out dividends or buy back shares — a process that can take 90 days. Standard Chartered would be able to begin buying back shares in July or early August if it sought approval after this month’s settlement.
Predators poised to swoop on Thomas Cook, led by Peter Fankhauser. Thomas Cook Group (TCG) is said to be in talks with potential bidders in a development that could see the 178-year-old travel brand taken private. The London-listed tour firm, which announced a strategic review of its airline business this year, is said to be holding talks on a takeover of all or part of the company. The approaches, first reported by Sky News, are in the early stages. Flat summer trading and £1.4bn of debt have led to fears for Thomas Cook, which owns 103 aircraft and flies 20m people a year to 120 destinations.
HS2 ‘ignored concerns about winning bidder’. Serious concerns were raised about a contractor’s ability to build a key High Speed 2 station before it won the £1.3bn contract, according to a High Court claim. HS2 described the joint-venture company set up by construction giants Balfour Beatty (BBY) and Vinci as “severely under-resourced [and] a real risk to the safe and timely completion and handover” of Old Oak Common station in northwest London, according to a rival bidder. Despite the alleged concerns, the contract was awarded to the consortium, which has pledged to deliver the project by 2026.
Sir Martin Sorrell’s new S4 Capital agency faces claim for payout by founder. Sir Martin Sorrell’s Derriston Capital (DERR) is facing a legal battle in Holland over the company’s £266m acquisition of the creative agency MediaMonks. Former MediaMonks investor Rogier Schalken is taking the Dutch agency to court to establish whether he should have been entitled to a slice of the sale proceeds following the takeover by S4 in July last year. Schalken wants to discover whether MediaMonks was already in talks with suitors when he sold his stake in November 2017. Schalken, who founded MediaMonks Films before leaving the agency after a decade in January last year, is understood to have had a small shareholding, which he sold at a far lower price than Sorrell’s S4 paid. His case is being heard on Wednesday.
Mike Ashley accuses Debenhams of bid to gag buyers. billionaire Mike Ashley has unleashed a fresh broadside in his quest to buy Debenhams (DEB), accusing the administrators of not running a “genuine” sales process. The tracksuit tycoon has written to the City watchdog complaining that restrictions imposed on possible bidders could put them off. Bankers at Lazard have approached about 70 potential buyers for the chain, which fell into the hands of lenders through a pre-pack administration this month. Prospective bidders have been asked to sign a non-disclosure agreement (NDA) forbidding them from having contact with any landlords or concessionaires of Debenhams for 18 months. Any potential buyer would want to talk to Debenhams’ landlords, Sports Direct said in a letter to the Financial Conduct Authority, pointing out that property was very relevant as Debenhams is close to launching a company voluntary arrangement (CVA) that would allow it to shut stores and slash rents.
BT sets up fresh clash with Ofcom. Telecoms giant warns that regulator will have too much power after Brexit. BT Group (BT.A) has called for a shake-up of Ofcom, claiming that the regulator could become too powerful after Britain leaves the EU. The telecoms giant fears that Brexit could lead to the watchdog’s role being increased as oversight by the European Commission is removed. It has suggested tackling the issue by separating operations within Ofcom to ensure “checks and balances” remain. The comments risk reigniting tensions that marred the end of Gavin Patterson’s reign as chief executive. Patterson tried to resist Ofcom’s demands that Openreach — the part of BT that runs the copper and fibre lines into homes and businesses — be run more independently. After Ofcom threatened to break up BT, the two sides agreed that Openreach would be spun off into a separate subsidiary.
Galliford Try needs to burn its bridges after share collapse. The builder being dragged down by its construction arm should focus on homes. Two years ago, the Queen cut the ribbon to open the Queensferry Crossing over the Firth of Forth. She hailed the huge structure as a “breathtaking sight”. The £1.3bn, cable-stayed bridge, with its three towers, is the longest of its kind in the world. It is a remarkable feat of engineering — and a millstone around the neck of one of its builders. New costs associated with the crossing, which opened nearly two years behind schedule, have come as a surprise to Galliford Try (GFRD). It issued a shock warning on Tuesday, saying that profits would be between £30m and £40m lower than City expectations of £156m. Galliford described its update as a “strategic review” of the construction arm that would eventually see it shrink, somehow mentioning falling profits only in the fourth paragraph. Galliford’s construction business is suffering. It won the contract, along with Carillion and Balfour Beatty, to build a 36-mile dual carriageway in boggy land snaking around Aberdeen in 2014. Yet, as with many of its projects, it bid on a fixed-price basis, meaning the business agreed to shoulder all the risks should anything go wrong. Delays stemming from Carillion’s collapse and severe winter weather have cost Galliford more than £150m on that project alone. It is in a legal scrap with the Scottish government to recoup costs. Galliford is a housebuilder first and a construction company second, in an old-style hybrid model. More than 90% of its £84.2m profits between July and December came from building houses under its Linden Homes brand, fuelled by the government’s Help to Buy scheme. Margins of 20% on the housing side compare favourably with just 0.9% in the construction division.
Julian Dunkerton rips up Superdry strategy of Euan Sutherland. Superdry (SDRY) returning founder has taken early steps to throw out the work of his predecessor, cancelling a childrenswear range and pulling out of a footwear licensing deal with the majority shareholder of JD Sports. Julian Dunkerton, 54, who narrowly won a hard-fought campaign to return to the board of the streetwear brand this month, has canned the kidswear range developed by former B&Q and Co-op boss Euan Sutherland, despite the fact Superdry had taken about 200 wholesale orders. He has also scrapped a footwear licensing deal with Pentland Brands, which makes shoes for brands such as Karen Millen and Kickers.
Shell demands taxpayer cash for carbon storage. New technology to cut emissions needs funding: oil major. Royal Dutch Shell ‘B’ (RDSB) has called for taxpayer subsidies to help it cut pollution by trapping carbon dioxide emissions underground. Carbon capture and storage is seen by many as vital to meeting global pollution reduction targets. It involves “scrubbing” pollutants from factory and power station emissions, transporting the gas to special locations and storing it to avoid damage to the atmosphere. The government is ploughing millions of pounds into getting the technology up and running by the mid-2020s, but the question of who pays to help combat climate change has proved controversial, with complaints over increases to electricity bills to subsidise renewable energy and pay for smart meters.
Tullow Oil faces revolt from ISS over ‘soft’ targets for bonuses. Debt-laden oil explorer Tullow Oil (TLW) faces questions over bosses’ pay at its annual meeting on Thursday, after a leading shareholder advisory group raised concerns about “soft” bonus targets. ISS has stopped short of calling for shareholders to oppose pay packets for executives at the Africa-focused business, but said targets could be tougher. Last year Tullow Oil’s chief executive, Paul McDade, earned £2.7m, including bonus shares worth £1m. Finance chief Les Wood earned £1.6m, including bonus shares worth £632,647, and exploration director Angus McCoss took home £1.5m, including bonus shares worth £596,288.
Activist investor Crystal Amber takes aim at Peter Dolan, chairman of tech incubator Allied Minds (ALM). Activist investor Crystal Amber has threatened to oust the chairman of troubled tech incubator Allied Minds if its demands are not met. Peter Dolan, an American drug industry veteran, has chaired Allied Minds since 2014, during which time the share price has collapsed amid a string of setbacks in its portfolio companies. Crystal Amber, run by Richard Bernstein, has this year built a 2.8% stake in Allied and demanded a break-up of the company and an overhaul of its pay policy. The row is set to come to a head on Friday, when Allied presents full-year results. Chief executive Jill Smith is likely to come under pressure to outline how the start-ups in its portfolio, which includes early-stage drug developers and a semiconductor business, will realise any value. Analysts have speculated she will try to sell or float some of the more promising holdings.
Showdown for Barclays as rebel Edward Bramson guns for board seat. Barclays (BARC) is set to report first-quarter earnings on Thursday as shareholders vote to support or reject the attempts of activist investor Edward Bramson to win a board seat. Bramson, who has a stake of 5.5% in Barclays through his vehicle Sherborne Investors, is pushing for the underperforming investment bank to be shrunk. He argues that it lags behind its rivals and weighs on returns. Any signs of poor performance by Barclays’ investment bank could be used by Bramson to bolster his campaign.
Funding Circle (FCH) under peer pressure. As the first of the peer-to-peer lenders to float, it was seen as a test case for the burgeoning industry. The business might have held off a little longer, but streams of private cash from venture capitalists and Japan’s SoftBank were showing signs of slowing. Despite having been hyped while in private hands, Funding Circle slashed its price range for the float. The shares still started at the low end — 440p — on its first day of trading, valuing the company at £1.5bn. Signs of economic cooling have led to an uptick in defaults and rising insolvencies. This is feeding through to smaller businesses. Funding Circle said in a blog post at the end of last year that the worsening consumer credit situation had “impacted a small population of loans” in its book. The spark for the “sell” fuse, though, is the recent announcement that Funding Circle is winding down its investment trust, which was launched as a way to help fund the P2P site’s loans. It is not all gloom. The business reported a jump in revenues in the first quarter, up 40% against a year ago. The shares have jumped to 326p over the past few days. Still, with losses ramping up to more than £50m last year and a raft of challenges ahead, it could struggle to recover the heady levels of its float last year. Sell.
