Thomas Cook Group (TCG) has collapsed after rescue talks failed, despite desperate efforts to save the stricken tour operator. Alix Partners, a consultancy renowned for its turnaround expertise, is set to handle the company’s insolvency. Thomas Cook’s board met late last night, and announced that the company had ceased trading in the early hours of this morning. Executives spent all day in talks in London with the group’s banks, bondholders, potential investors and Fosun, the Chinese conglomerate that is the biggest shareholder in the world’s oldest travel group. Other creditors, including credit card companies, were also involved in the discussions. The eleventh-hour talks were held in an attempt to close a £200 million funding gap and avoid a collapse of the business. The meetings, held at the offices of Latham & Watkins, a City law firm, began at 9am and broke up at 5.30pm. Thomas Cook directors convened in the evening to review their options.
The chairman of Ocado Group (OCDO) has pledged that the retailer “will go to any lengths” to protect its intellectual property as it faces a bitter court battle with one of its co-founders. Lord Rose of Monewden said: “Anyone who reads the court submissions will appreciate how serious this issue is. This is corporate espionage. We have been subject to corporate theft.” Last week court papers revealed that the online grocer was suing Jonathan Faiman, who left Ocado in 2010, over allegations that its confidential documents had been unlawfully obtained so that he could set up a rival new venture. “This is an issue that I and the board take incredibly seriously and will go to any lengths to protect our intellectual property,” Lord Rose, 70, said. He alleged: “One of our employees has stolen documents. Our assets and intellectual property and proprietary software is what gives us leadership in the industry. You would expect the board to protect our intellectual property.”
Standard Chartered (STAN) is locked in “very difficult” conversations with its leading shareholders over its chief executive’s pay after an investor revolt over his pension. The emerging markets-focused bank was hit by backlash over Bill Winters’ pay at its annual investor meeting in May, when more than 36% of the votes cast were against its new executive pay policy. Three top 20 shareholders have told The Times that despite holding talks the bank still needs to shift its position on pay if it is to avoid another clash with investors next year. “We would be disappointed come January or February if we’re in the same place,” one said. A second said: “It’s still a very difficult conversation.”
Amazon is secretly building a team of senior British property experts amid speculation that the online retailer is preparing for another assault on supermarkets. Matt Birch, who previously had a short stint at the Co-op and spent just under a decade at Sainsbury (J) (SBRY), joined Amazon in May. It is understood that Mr Birch, who was also property director at Tchibo, the German coffee retail chain, is among company executives who have been meeting to identify sites for more bricks-and-mortar stores. An Amazon spokesman said that the company did not comment on rumour or speculation. Jeff Bezos, Amazon’s founder, has said previously that the online retailer is “very interested” in physical stores and frequently has noted that 90% of retail sales in the United States still happen in physical shops. Property sources have said that Amazon is considering how to expand its present grocery offering, which is serviced by Morrison (Wm) Supermarkets (MRW), through its Prime Pantry and Amazon Fresh delivery services. It is still to open a version of its cashierless Amazon Go shops in London.
The billionaire behind Hargreaves Lansdown (HL.) has launched a blistering attack on Neil Woodford, slamming the beleaguered stockpicker for appearing not to be “truthful” about the performance of his frozen Equity Income Fund. Peter Hargreaves, who started the funds platform with Stephen Lansdown in 1981, also added to the wave of criticism of his old company for holding too many of Woodford’s funds and for failing to spot the crisis until it was too late. “It’s annoyed the hell out of me that it would appear he [Woodford] has not been truthful with Hargreaves Lansdown. But it’s also annoyed me that they let it go on so long,” Hargreaves said. Hargreaves Lansdown has come under fire for using its Wealth 50 list of recommended funds to promote Woodford’s Equity Income fund, which blocked withdrawals in May after a string of corporate collapses at mostly unquoted companies held by the fund. Woodford’s fund has shrunk to £3.1bn during its suspension from a value of £10.2bn at its height just two years ago. Hargreaves, 72, has kept his counsel since the fund was gated. He still owns 32% of Hargreaves Lansdown, a stake worth £3.1bn at Friday’s closing share price of £20.30. He stood down from the board in 2015.
The boss of Sirius Minerals (SXX) has suggested that investors may have been badly advised when they backed his company. More than 85,000 retail investors face heavy losses after Sirius’s $3.8bn (£3bn) fertiliser mine project in the North York Moors was thrown into doubt last week when it failed to raise $500m in bonds. Chief executive Chris Fraser said: “I read stories where people seem to have over-invested or probably not taken the right advice. I feel very bad for those situations, but we have been clear about the opportunities and also the risks.”
Sainsbury (J) (SBRY) boss Mike Coupe will try to convince sceptical investors this week that the supermarket can thrive on its own after regulators shut down his proposed merger with Asda. Coupe is expected to outline how the chain will use data gathered from its Nectar loyalty card to boost sales and will also set out proposals to stem losses at its banking division. The chief executive is expected to step down next year, although the timing could hinge on investors’ response to Coupe’s new strategy after a capital markets day on Wednesday. The chairman, Martin Scicluna, has said that Coupe retains the board’s backing, but only 50% of investors believe the chief executive’s position is tenable, according to a poll by the investment manager Alliance Bernstein. The leading internal candidate to succeed him is said to be John Rogers, the former finance chief who became boss of Argos after its takeover by the supermarket in 2016.
Marks & Spencer Group (MKS) finance chief has quit after less than 18 months, continuing the exodus of top executives from the retailer. Humphrey Singer joined last July from Dixons Carphone on a £600,000-a-year contract. His departure comes two months after clothing boss Jill McDonald was ousted by Archie Norman, who has replaced almost the entire management team since he became chairman of M&S two years ago. Singer was recruited by chief executive Steve Rowe, but was said to have been unhappy in the role, according to Sky News.
Burford Capital (BUR) became a cause célèbre last month when activist investor Muddy Waters published a damning report on it. Although the attack by Muddy Waters founder Carson Block focused on Burford and its accounting, other litigation funders came under the spotlight. Manolete Partners Plc (MANO) is among a small clutch of listed companies that rushed to distance themselves from Burford. The sector is still haunted by the Burford debacle. Manolete, which has a market value of £225.3m, said the shorter duration of its cases meant that it was easier to value them more accurately and account for expected gains. Still, shares took a hit last month after the Burford case, dropping by a third to 370p, as concern about the sector spread. Shares closed on Friday at 510p. The growth outlook for Manolete is positive. Analysts at Arden expect it to pursue claims of larger value, which would result in larger settlements. Manolete has already invested in 59 new cases this year – equal to the number it backed over the year to the end of March. Despite the growth prospects, the sector is now under greater scrutiny. Steely nerved investors might view Manolete as attractive, but with litigation funders under the microscope, it is a sector to avoid.
