The board of Just Eat (JE.) is under pressure after it rejected a hostile £4.9 billion bid from a South African technology investor that threatens to scupper a proposed merger with Takeaway.com. A takeover battle erupted for the FTSE 100 takeaway delivery group yesterday after Naspers made a 710p-a-share offer. The bid, via Prosus, Naspers’ Dutch-listed investment vehicle, was rejected by Just Eat as being too low. However, shares in the delivery business rose by 145½p to 735p, well above the offer price, amid expectations that there could be further bids, either from Prosus or from suitors.
Sensyne Health (SENS) said that Lord Drayson, its chief executive, had proposed forgoing his £500,000 pay for the rest of the financial year, which runs to the end of April. The former Labour science minister will be paid £1 instead of the roughly £250,000 that he should have received. Sensyne also has withdrawn its remuneration policy for Lord Drayson, 59, and will give its leading investors a final say over any bonus that the board proposes for him for this year. Under the abandoned policy, he could have been handed a £1 million award.
Fears that Whitbread (WTB) might use its half-year results to issue a profit warning proved wide of the mark yesterday, but the gloomy picture painted by the Premier Inn owner still prompted investors to check out. While insisting that its first-half performance had been resilient and that it was winning market share, Alison Brittain, chief executive, said that “market conditions in the UK continue to be challenging, with business confidence remaining weak and leisure confidence in decline, coinciding with heightened political and economic uncertainty”. She said that the uncertainty had continued into the third quarter and that this had hit domestic hotel demand, particularly in the regional market, where 80% of Premier Inn hotels are located. Nevertheless, Ms Brittain, 54, emphasised that the company retained “confidence in the long-term structural opportunities available in the domestic budget travel markets in the UK and Germany”.
The new boss of Reckitt Benckiser Group (RB.) yesterday accused his predecessor of running “the engine too hot”. Delivering a savage analysis as he cut both sales and profit forecasts, Laxman Narasimhan referred to a string of errors within the Durex and Gaviscon-maker’s largest health division and claimed that the business had taken its “eye off the ball”. Mr Narasimhan, 52, who joined from Pepsico seven weeks ago, said that Reckitt had struggled to integrate Mead Johnson, the American baby formula maker it bought for £12 billion two years ago. He was also critical of the group’s failure to maintain close relationships with American retailers, which he said was responsible for low stock levels of its Mucinex medicine before this flu season.
Economic uncertainty has forced Travis Perkins (TPK) to delay plans to sell its plumbing and heating business. Britain’s biggest distributor of building materials had said in December that it would sell the division to streamline its structure, cut costs and focus on its trade businesses. However, it said yesterday that the demerger had been postponed until the second quarter of next year, although efforts to demerge Wickes, the group’s DIY chain, would continue. It also announced a 3.4% rise in like-for-like sales in the quarter to the end of last month, driven by its Wickes and Toolstation businesses.
Underlying revenue at Bunzl (BNZL) slipped by 1% in the third quarter, taking account of constant exchange rates and excluding acquisitions. The group put this down to “lower sales to a large grocery customer in North America”, where its biggest client is Walmart, the giant retailer. Including acquisitions, revenue rose by only 0.5%. On an actual basis, the group reported revenue growth of 4%. Bunzl said that its expectations for the year “remain unchanged, with overall trading consistent with the slowing underlying revenue growth indicated in previous announcements”, and it blamed “the impact of the continued mixed macroeconomic and market conditions across the countries and sectors in which the group operates”.
The former head of Royal Bank of Scotland Group (RBS) scandal-hit restructuring division is to be questioned over allegations that the government influenced the bank’s poor treatment of thousands of businesses. Derek Sach, who ran RBS’s Global Restructuring Group, is due to appear as a witness in a high court battle between Oliver Morley, a wealthy property developer, and the bank. It will be the first time Mr Sach, 71, has been publicly questioned about GRG since a disastrous appearance before MPs in 2014 at which he was accused by Andrew Tyrie, then chairman of the Treasury select committee, of being “wilfully obtuse”. Mr Morley, 49, claims that GRG placed him under “economic duress” that resulted in the acquisition of some of his assets by West Register, the bank’s property division, in 2010. The bank has said that it “fundamentally disagrees” with the claims and “does not believe they have any merit”.
Rio Tinto (RIO) has said it could become America’s largest producer of lithium for batteries after making a discovery at a mine in California that it has described as a “eureka moment”. The Anglo-Australian group said that it had found that piles of waste rock discarded over almost a century at its Boron site contained high-grade lithium, which could be used in batteries for electric vehicles. If Rio were to succeed in extracting the metal from the waste rock, it would become a substantial supplier. This, in turn, would be a significant development for the fast-growing electric car industry — and also the US-China trade war. There are five lithium producers working in South America and Australia, two of which are Chinese. Experts have warned that China could choke supplies to the United States in retaliation for tariffs imposed by President Trump.
Investors in TUI AG Reg Shs (DI) (TUI) are concerned that the dividend could be cut again next year — but analysts at Morgan Stanley were looking a little deeper and their fears centred on Boeing’s grounded 737 Max jet. In their view, the aircraft’s return to the skies by the end of the year looks “unlikely” and for Tui, which uses the Max to fly tourists to destinations in Europe and beyond, they reckon that the continued grounding of the aircraft will cost the travel operator €150 million this financial year, which began at the start of October — rather more than a previous estimate of €50 million. Worse, that assumes that the 737 Max jets resume flying in April and they fear that the cost could rise to €350 million if the aircraft are out of action for longer than that.
On The Beach Group (OTB) enjoyed a day in the sun as it announced plans to take advantage of the “unprecedented opportunity” created by Thomas Cook’s demise. The specialist in beach package holidays is to increase its marketing, taking out more newspaper wraps and filling billboards with its ads, as it tries to grab a bigger slice of the market.
Ibstock (IBST) crumbled by 9¼p to 249¾p after a profit warning from Forterra (FORT), its fellow brick maker, which warned that this year’s profits would be less than last time around because of a drop in demand from distributors and its non-residential customers. Forterra shares fell by 26p to close at 273p.
Anglo American (AAL) has warned that its copper production in Chile has been hit by the severe drought in the country, which could continue to affect its output next year. The mining group reported a 16% drop in third-quarter output from its Los Bronces mine in the Andes, primarily because of a lack of water in “the driest year of the longest drought ever recorded in central Chile”. Water is critical to the operations, both for transporting crushed ore as slurry and then for separating the copper from the ore.
Tempus – Baillie Gifford Japan Trust (BGFD): Avoid. Strong track record and performing share price would be more compelling with a higher yield
Tempus – Hostelworld Group (HSW): Hold. Sensible recovery plan will take time but shares offer rewards
