Morning Financial Press
Paul Kettle
AM Press Review -3 min read
07:19, 12th February 2019

Below are the key morning headlines from today’s papers, featuring the Financial Times, The Times, The Telegraph, The Daily Mail & more - see the full Press section here.

Selfridges will shell out £17.4million on business rates for its flagship shop in Oxford Street this year – almost triple what it paid in 2018. The upmarket department store is one of 8,000 properties in London’s West End braced for a £45million hike to their combined rates bill for 2019/20. Burberry’s store on New Bond Street will suffer one of the biggest increases, with its bill soaring from £935,770 to £2.6million, according to property consultant Altus Group.Meanwhile, the rates contribution for Debenhams’ Oxford Street shop will hit £5.4million – a 60 per cent rise on a year earlier. The department store group is scrambling with lenders to secure a lifeline and stave off collapse. Bosses have blamed rising costs, including business rates, for contributing to its troubles.

Investor warns Just Eat to seek merger, not new chief. The American hedge fund agitating for an overhaul at Just Eat (JE.) FOLLOWhas turned up the heat on the takeaway delivery group, demanding that it seeks a merger with a rival rather than appointing a new chief executive. Cat Rock Capital Management, which owns 1.9% of the company, said that a merger with a well-managed rival would be a “better alternative” than sticking with a “plodding” board. In a scathing open letter published yesterday, the hedge fund attacked Just Eat over the recruitment of Peter Plumb, 55, the former boss of Moneysupermarket, as chief executive in 2017. Mr Plumb was shown the door three weeks ago after only 16 months in the job.

Petrofac risks £400m shareholder claim over bribery scandal. The oil services giant at the centre of a global corruption scandal could soon be taken to court by its own shareholders. Petrofac Ltd. (PFC) FOLLOWmay be forced to face a legal claim after a string of bribery and corruption allegations halved the UK-listed company’s market value, according to legal funding firm Innsworth. The “vulture capitalist”-backed litigation investor sounded the warning shot after Petrofac’s former sales boss pleaded guilty to 11 counts of bribery last week. The claim is understood to have attracted interest from major institutional shareholders on Petrofac’s register and could amount to more than £400m in damages.

CMA delays final decision on Sainsbury-Asda merger by two months. The competition watchdog has extended its deadline for a final decision on the proposed merger of Sainsbury (J) (SBRY)FOLLOW and Asda by almost two months. The Competition and Markets Authority said there were special reasons why the original March 5 deadline had been pushed back to April 30, citing the “scope and complexity of the investigation”. It added that it needed to consider issues raised by both supermarkets and third parties, as well as the need to reach a fully reasoned provisional decision.

IAG in warning to non-EU shareholders. UK shareholders in the company that owns British Airways will not face new restrictions on their holdings after Brexit, the group said last night, but other non-EU shareholders will. International Consolidated Airlines Group SA (CDI) (IAG) FOLLOWsaid that non-EU ownership of its shares had reached 47.5% and tht it was placing a ceiling on non-EU ownership of that amount in future. Any non-EU buyer making purchases that breached the ceiling would lose their voting rights on the shares and would be forced to sell them within ten days. UK-resident shareholders would not be treated as non-EU holders, it said, even after Brexit, which is due on March 29.

Acacia Mining makes ‘progress’ on Tanzanian dispute and returns to profit. The interim boss of Acacia Mining (ACA)FOLLOW said that talks to resolve an ongoing dispute with the Tanzanian government were “progressing in the right direction” as the miner swung back to profit. The FTSE 250 company, which is 64% owned by Canadian miner Barrick, posted pre-tax profits of $96m (£74m) for the year to Dec 31. This compared to losses of $709m for 2017 amid a ban on selling powdered gold concentrate by the government of Tanzania and an impairment charge of $850m. The company runs three mines in the country.

The close ties between Big Tobacco and Formula One date back decades, to when cigarette brands were splashed across cars and fuelled the rise of the sport into a multibillion-pound business. Now, 13 years after the sport banned tobacco advertising amid tightening international regulation, one of the world’s biggest tobacco manufacturers has returned to Formula One. British American Tobacco (BATS) FOLLOWand McLaren, the Woking-based team, yesterday unveiled a global partnership on the eve of the 2019 championship. It marks a back to the future moment for BAT, which sold its British American Racing team to Honda in 2005, as well as for McLaren, whose cars were once sponsored by Philip Morris, BAT’s rival, and raced in the red and white of its Marlboro brand. BAT is a £61.7 billion, FTSE 100 company, generating £20 billion of revenue. Headquartered in London, its brands include Lucky Stripe and Dunhill. The new tie-up is being pitched as “focusing solely on potentially reduced risk products and grounded in technology and innovation”.

Imperial Brands chairman to step down. Imperial Brands (IMB) FOLLOWconfirmed that Mark Williamson will step down as chairman after new corporate governance rules and investor concern triggered speculation about his departure. He has been on the board of the FTSE 100 company for 12 years, putting him at odds with the nine-year limit set by the new UK corporate governance code. The tobacco group said it has been engaged in succession planning to replace Mr Williamson, who also chairs FTSE 250 engineer Spectris and is on the board of National Grid. Imperial said: “Mark will remain as chairman until his successor has been found and to ensure an orderly handover of responsibilities. A further announcement will be made upon the appointment of his successor.”

Glass Lewis backs BTG takeover but attacks failure to disclose bid details. A leading shareholder advisory group has backed a £3.3 billion takeover of BTG (BTG) FOLLOWby an American rival, but has questioned the board’s handling of the sale process and the role of its financial advisers. Glass Lewis has recommended that investors back the acquisition of the FTSE 250 pharmaceuticals group by Boston Scientific. However, it also has complained that BTG “has not publicly provided any substantive information regarding the process that the board followed to arrive at the proposed transaction. “In particular, the company does not disclose whether it made any meaningful attempts to solicit alternative offers from other potential third-party buyers prior to agreeing to the scheme with Boston Scientific.”

Shares in Stride Gaming (STR) FOLLOWwere in demand after the owner of Kitty Bingo effectively put itself up for sale. The price of 111p – after it climbed 7.3%, or 7.5p yesterday – values the business at around £83million. Floated in May 2015 at 132p, it raced to more than £3 before hitting reverse gear when it incurred fines for compliance failures. With around 11% of the £2.8billion-a-year online bingo market, the company should attract attention from the industry’s big wheels.

Immersive virtual reality firm Immotion Group (IMMO) FOLLOWsees revenue surge into six figure. Immotion Group, which only joined AIM last summer, makes immersive virtual reality ‘pods’ and the content that goes with it. Customers can put on one of the Immotion headsets, sit in a pod or a racing car, for example, and take in experiences that range from rollercoaster rides to supercar racing right through to fighting alien invaders in space. The company, which is still a relative tiddler at £12million, also has an ‘edutainment’ – education and entertainment combined – divisionAs a small company pioneering a whole new field of entertainment there are financial and execution risks. But if Immotion delivers on its targets the potential upside from the current 6.5p share price look to be substantial.

A long-standing Barclays (BARC) FOLLOWshareholder has blasted US activist investor Edward Bramson’s plans to trim back the business’s investment bank. Bramson, who is chief executive of New York investment company Sherborne, last week confirmed that he is forcing the bank to hold a shareholder ballot at its annual meeting in May on his plan to become a non-executive director. Fund manager Richard Buxton, who has invested more than 3% of his Merian UK Alpha Fund in Barclays, said: ‘We have a holding in Sherborne, so Bramson does communicate with us and has come in to see us. ‘But we don’t agree with what he’s trying to do. The idea that this is the right moment to significantly downsize the investment bank is wrong. ‘We also think it’s wrong [to think] that if you were to do so, you would magically release vast amounts of capital to shareholders.’

British Airways’ owner has blocked investors outside the European Union from buying its shares – sparking fears UK traders could also be frozen out after Brexit. International Consolidated Airlines Group SA (CDI) (IAG) FOLLOWannounced last night that it has capped the maximum number of its shares that can be held by non-EU investors at 47.5% and that this threshold has been reached. It means IAG will prevent any investor from outside the EU from buying shares. Any investor who does acquire shares will have voting rights removed and be forced to sell them within ten days. A spokesman said: ‘There can be no assurance as to when, or if, the permitted maximum will be removed.’ Under EU rules, airlines must prove they are 50% EU-owned to have flying rights within the bloc. Last month, EasyJet increased the cap on ownership by non-EU investors to 49%. IAG, which also owns Iberia, Vueling and Aer Lingus, insisted it had no plans to freeze out UK shareholders after Brexit, but said it would inform investors if this changed. But analysts warned that the announcement demonstrated the amount of work needed to be done to protect British shareholders after leaving the EU.

Debenhams to announce £40m short-term cash injection. Move aims to buy department store time to arrange long-term finance and shop closure plans. Debenhams (DEB) FOLLOWis expected to announce a short-term cash injection of about £40m as it buys more time to arrange a longer-term refinancing and store closure plan. The ailing department store chain, which has 165 outlets and employs 25,000 people, is battling to reach a deal with its banks and bondholders after a difficult Christmas capped off a lacklustre 2018, during which it issued three profit warnings. Lenders have agreed to extend the company’s overdraft limit in an attempt to give it time to refinance its debts, and an announcement about the extension could come as soon as Tuesday. The rescue process is likely to involve the closure of tens of stores and lenders taking a stake in the company

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The information, investment views and recommendations in this article are provided for general information purposes only. Nothing in this article should be construed as a solicitation to buy or sell any financial product relating to any companies under discussion or to engage in or refrain from doing so or engaging in any other transaction. Any opinions or comments are made to the best of the knowledge and belief of the writer but no responsibility is accepted for actions based on such opinions or comments. Vox Markets may receive payment from companies mentioned for enhanced profiling or publication presence. The writer may or may not hold investments in the companies under discussion.

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