Hammerson shakes up board and plans £500m sell-off. Hammerson (HMSO) has announced a boardroom shake-up and accelerated asset disposal programme after coming under pressure from an American activist investor. The owner of Birmingham’s Bullring shopping centre said that it would appoint two additional non-executive directors and set up an investment and disposal committee as it seeks to sell at least £500 million of assets this year. In exchange, Elliott Advisors has agreed not to vote against ordinary resolutions at the upcoming general meeting. It also has said that it will not increase its voting interests and economic interests in the company above 10% and 15% respectively.
Persimmon (PSN) fell more than 6% this morning on fears that the government could strip the housebuilder of its right to sell Help to Buy homes over allegations of poor standards and punitive hidden charges. The Times revealed on Saturday that James Brokenshire, the housing secretary, was reviewing Persimmon’s participation in the government scheme, which accounted for half of the homes it built last year. Senior politicians piled in to criticise the housebuilder on social media over the weekend. Boris Johnson, the former foreign secretary and former London mayor, said: “Persimmon has let down too many customers while reaping vast taxpayer-funded profits.” Nick Boles, the Conservative MP for Grantham and Stamford, said that he “strongly” supported the move by Mr Brokenshire. David Davis, the former Brexit secretary, said: “Good news that the government is to review Persimmon’s behaviour under Help to Buy. The whole policy needs review, as corporate incentives are all wrong at the moment.” The backlash sent shares down across the sector as investors worried about restrictions being introduced for the government scheme, which has helped to increase housebuilders’ profits on new-build homes. Taylor Wimpey (TW.) slipped 2.6%; Barratt Developments (BDEV) lost 2.1%; Berkeley Group Holdings (The) (BKG) edged down 1.1%; and Countryside Properties (CSP) fell 2.2%
Non-Standard Finance (NSF) blocks £7m windfall for founders in Provident Financial (PFG) bid battle. Non-Standard Finance’s pay committee has stepped in to head off a probable row over an instant £7 million windfall for its founders should the sub-prime lender land its £1.3 billion hostile bid for its bigger rival, Provident Financial. The all-share bid, launched on Friday, would have potentially triggered bonuses for six present and former directors under a founders share scheme put in place at NSF’s £1-a-share float in 2015. The biggest recipient would have been John van Kuffeler, the company’s 70-year-old chief executive, who ran Provident for 22 years and owns 30 per cent of the founder shares. Under the scheme, directors subscribed £255,000 for options that would have converted into 5.54 million shares if targets were hit. They included making “acquisitions with a combined value of £50 million” and improving total shareholder value by 25%.
Advertisers take a Brexit break from ITV. ITV (ITV) is set to sound the alert about advertising revenues for the second time in six months as the prospect of a chaotic Brexit forces companies to cut marketing budgets. With some analysts forecasting a 20% drop in ITV’s advertising revenues in March, the month that Britain is due to leave the EU, the commercial broadcaster is expected to highlight the problem at its annual results on Wednesday. The group tends to look only four to six months ahead with advertising, given the uncertainties and fluctuations around spending. Dame Carolyn McCall, ITV’s chief executive, warned in November that advertising income would be down 3% in the fourth quarter and would fall by as much as 8% in January.
KKR eyes Asda bid as Sainsbury (J) (SBRY) deal falters. Buyout giant circles Walmart‑owned supermarket chain. The American private equity giant that owns ticketing app Trainline is plotting a bid for Asda as the supermarket’s £14bn merger with rival Sainsbury’s teeters on the brink of collapse. KKR, whose past investments include chemist chain Alliance Boots, is thought to be working with Tony De Nunzio. The former Asda boss, now a senior adviser to the buyout firm, would become chairman were KKR to strike a deal. The Competition & Markets Authority (CMA) sent shockwaves through the grocery industry last week when it indicated that Sainsbury’s and Asda, the second- and third-biggest supermarkets, would have to sell more than 300 stores to a single buyer for the merger to stand a chance of being approved— a tough stance seen as likely to kill the deal.
Daily Mail lines up £750m Euromoney sale. The owner of the Daily Mail is considering offloading its interest in the publisher Euromoney Institutional Investor (ERM) — a move that would bring down the curtain on a 50-year partnership and fund a £750m special cash return to shareholders. Daily Mail and General Trust A (Non.V) (DMGT), the media empire that holds the Mail newspapers and previously owned a stake in the property portal Zoopla, is understood to be working on a sale of its 49% stake in Euromoney Institutional Investor, the FTSE 250 group that publishes financial titles including Euromoney magazine and puts on events. A source close to the situation said the holding had become “non-core” and was under review. Paul Zwillenberg, who took over as chief executive in 2016, sold down DMGT’s stake in Euromoney from 67% to 49% as one of his first acts.
Hammerson revs up sell-offs under pressure from Elliott Advisors. Hammerson (HMSO) is set to unveil a more aggressive asset sell-off plan this week after activist investor Elliott Advisors increased its stake in the shopping centre owner. Last year, chief executive David Atkins pledged to sell Hammerson’s retail parks and raise £1.1bn to cut debt. It is understood that Atkins will put more assets on the block at tomorrow’s full-year results. Elliott is breathing down Atkins’s neck. The US hedge fund is said to be pushing the board to reshape its portfolio fundamentally. Late last year, the activist is understood to have used the steep decline in Hammerson’s share price to add to its position, which was 5.3% in July. Elliott’s stake is held through derivatives, meaning it has to make a further disclosure only when the holding hits 10%.
Britflix boost for drama. The BBC and ITV (ITV) plan to bolster their defences against Netflix and its rivals by commissioning new shows specially for their “Britflix” platform. The broadcasters are poised to announce their on-demand platform at ITV’s annual results on Wednesday. It is expected to cost more than £5 a month and feature hits from their archives, such as Doctor Who, Poldark and Inspector Morse. However, the BBC and ITV are understood to have discussed commissioning new shows for the platform to lure in subscribers. Lord Hall, director-general of the BBC, and the bosses of ITV and Channel 4 have been in talks for a year about a shared player. It is expected to draw inspiration from BritBox, the joint BBC and ITV streaming platform in America and Canada, which has 500,000 subscribers, but would not replace free on-demand services such as the iPlayer. Channel 4 is not expected to be part of the announcement this week.
Chairman Peter Bamford’s exit puts Superdry boss Euan Sutherland on rack. The chairman of Superdry (SDRY) is expected to stand down by the end of the year — heaping more pressure on its chief executive, Euan Sutherland, who is under fire from the fashion brand’s founders. Peter Bamford, the former boss of Vodafone UK, is understood to have indicated he will leave before January, having been on the board for nine years — the limit under corporate governance rules. A change of chairman will heighten the focus on Sutherland, who has been attacked by founders Julian Dunkerton and James Holder over the brand’s direction. Shares in Superdry — which reported a 1.5% drop in quarterly sales this month — have fallen by more than two-thirds over the past year and closed at 517p on Friday, valuing the business at £424m.
Barclays attacked for tactics over Edward Bramson. Investor brands share buybacks pledge ‘cheap shot’. A leading Barclays (BARC) shareholder has branded the bank’s promise of share buybacks a “cheap shot”, dealing a blow to its strategy for fending off the activist investor Edward Bramson, who is campaigning for a board seat. Richard Buxton, head of UK equities at Merian Global Investors, told The Sunday Times: “I don’t believe putting Bramson on the board is the answer, but his likely failure to secure election should not be taken by the board as a ringing endorsement of their current strategy, leadership or execution.”
The first investors in GW Pharmaceuticals (GWP) more than two decades ago were a little confused to be invited to visit a greenhouse in Kent. One of them even recalled having to wash sticky cannabis residue off his hands afterwards. In 1998, the therapeutic drugs start-up had little more than a crop of weed and a good idea. “It was certainly an uphill battle,” admitted chief executive Justin Gover. “We were, after all, dealing with a plant that was highly controversial.” Today, GW Pharma is worth $4.5bn (£3.5bn) and has won approval for two drugs — Sativex, for multiple sclerosis, and Epidiolex, for epilepsy. If it had been launched today, it would have enjoyed a different response to its fundraising. Entrepreneurs and investors are rushing into the emerging medical marijuana industry, fuelling a craze reminiscent of the late 1990s dotcom bubble. The billionaire investor Jim Mellon, rapper Snoop Dogg and Innocent Drinks co-founder Richard Reed have taken stakes in speculative companies, many with little experience and scant revenues.
Oil giant Total hit by collapse of energy broker Utilitywise plc (UTW). French oil and gas giant Total could lose thousands of lucrative small business customers after one of Britain’s biggest energy brokers called in administrators. Utilitywise, which is based in North Tyneside, collapsed this month after failing to raise the £10m it needed to stay afloat, putting about 1,000 jobs at risk. The broker worked for energy suppliers by selling contracts to business customers. Utilitywise did not disclose its clients, but industry sources said Total Gas & Power, a subsidiary of Total, was the most exposed to the administration. Energy suppliers have come to rely on brokers to find and retain business customers. In its 2017 accounts, Utilitywise said it had more than 40,000 small business customers.
FirstGroup passengers to enjoy 100 times faster wi-fi. The speed of your train into London will soon be 100 times faster than usual — at least on the wi-fi. FirstGroup (FGP), which runs the South Western Railway, Great Western Railway, TransPennine Express and Hull Trains franchises, has just signed a deal with 5G start-up Blu Wireless Technology to introduce wireless reception far in advance of current standards. The enhanced connection will allow passengers to enjoy high-definition video conferencing, 3D gaming and video streaming. “The typical existing links to trains give a total data of about 40Mb [megabits],” said Henry Nurser, chief executive of Blu Wireless. “The sort of technology we are developing can get 6Gb [gigabits] to the train. And everyone’s happy.”
Lego Movie 2 to boost owner Merlin Entertainments (MERL). The release of Lego Movie 2, starring Chris Pratt and Elizabeth Banks, is set to drive families to Lego-land parks — giving a boost to Merlin Entertainments. The FTSE 250 company, which also owns Madam Tussauds and the London Dungeon, is also expected to report higher visitor numbers to its Peppa Pig World of Play attractions in China, thanks to the release of a new film: Peppa Celebrates Chinese New Year. Beijing lifted censorship on the character, which had been banned for becoming an anti-establishment symbol among a youth counter-culture movement.
Venture capital fund Draper Esprit (GROW) wants to open up investing in cutting-edge tech — but it comes with a risk. The stakes for investors in fast-growing start-ups are higher than ever. Private tech businesses in Britain grew 10 times faster than FTSE 100 companies in the five years to 2018, according to research by investment network Newable. Soaring valuations are good news on paper, but some investors say they are getting out of control, storing up possible problems. As a cautionary tale, they cite the Scottish fantasy sports platform FanDuel, valued at well over $1bn after raising more than $350m from investors including private equity giant KKR. It was sold last year for just $465m. Clauses in later fundraising rounds meant founders and angel investors lost everything. Other tech start-ups have achieved eye-watering valuations without making anything. Draper Esprit, which is listed on AIM with a capitalisation of £580m, has helped by pumping millions into some of Britain’s most talked-about young companies. Some of Draper’s investments have paid off handsomely. It had a big shareholding in Irish chip processing business Movidius, which was sold to Intel three years ago for a reported €300m, netting Draper 7½ times its investment. There have been flops. It invested $4.3m in online furniture retailer Achica, which went into administration. It lost money through the cut-price sale of Moviepilot two years ago. Unilever bought the healthy snack brand Graze for £150m this month — much less than was expected.
Motif Bio (MTFB): a suitable case for treatment. Motif Bio’s management, led by Graham Lumsden, claimed that the drug iclaprim had shown great promise in killing specific infections, while minimising the growth of drug-resistant bacteria. Last month, broker Peel Hunt sent a note to investors praising Motif Bio’s “de-risked product” and “undervalued pipeline story” (groan). That statement now seems somewhat premature. On February 14, the company announced it had received a “complete response letter” from America’s Food and Drug Administration (FDA) in relation to its drug, which had passed two phase 3 trials. In effect, the FDA needs more information to allay its concerns over the risk of liver damage. It could demand further testing, which could take months. Shares crashed 88%, leaving investors including Invesco — which dumped 10% of its holdings — and HSBC nursing heavy losses. They closed on Friday at 7p, giving the Motif Bio a valuation of only £20.8m. The company remains optimistic, saying it will discuss paths towards approval with the FDA. However, investors should take note: it is not the first time iclaprim has been at the sharp end of the FDA. A decade ago it was in the hands of Arpida, a spin-off from Swiss pharma giant Roche. Arpida was forced to lay off most of its workforce after the FDA’s advisory panel denied iclaprim approval. A few years later, it was back — this time in the hands of Motif Bio, which raised $10m (£7.7m) from investors last May in expectation of approval. However, the FDA’s concerns over liver damage are a red flag — drugs have been pulled from the market for less.
