Morning Financial Press Review
Paul Kettle
AM Press Round-Up -2 min read
07:07, 11th March 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

Hedge funds have doubled their bets against Royal Mail (RMG) FOLLOWin just over a month as the City worries about the fate of its dividend. Short-sellers have built up a £180m short position, predicting that the embattled parcel deliverer’s shares will suffer another plunge. Analysts have warned that shareholder payouts hang in the balance after a shock profit warning in October. Royal Mail’s share price has since collapsed below its float price, hitting a record low last Friday. After hedge funds initially cashed out on the back of its woes, shorts have surged back to hit the highest level on the FCA’s records.

Interserve (IRV) FOLLOWis mounting a last-ditch campaign to encourage support for a rescue plan, targeting both individual shareholders and institutions before a vote at the end of the week. The cleaning and catering contractor is trying to rally support for a proposal under which lenders would write off their debts in exchange for equity from its retail investors, who between them own about 30% of the business. As well as paying for online adverts aimed at its small investors, it has been trying to gather support by going through investment firms including Hargreaves Lansdown and AJ Bell. Retail investors control about 10% of Interserve through accounts held at Hargreaves Lansdown and they own substantial holdings through other brokers such as AJ Bell, IG Markets and Interactive Investor

Shareholders have urged Just Eat (JE.) FOLLOWboard to explain why the interim boss ruled himself out of taking up the post permanently, after they were told just weeks earlier that he was “their man”. A top 20 shareholder in Just Eat, which has not spoken out before, said it was a “curious set of circumstances”. “A couple of weeks ago the chairman and the board were saying how amazed they were about Peter Duffy’s abilities and about how capable he was, and how excited they were for him to take up the CEO role permanently,” the shareholder said. “Something just does not add up. Either something really terrible must have happened or the board is not really doing their job.”

City advisers could pocket more than £22 million in fees if Non-Standard Finance (NSF) FOLLOWsucceeds with its £1.3 billion hostile bid for Provident Financial (PFG) FOLLOW. The sub-prime lender formally tabled its bid for Provident at the weekend, when it published the offer document for the proposed all-share deal. It disclosed that it expected to pay its bankers, lawyers, accountants and public relations advisers between £8.5 million and £22.3 million, depending on whether the deal is completed. Both companies provide high-interest loans to borrowers who find it hard to access credit. Non-Standard Finance unveiled its bid for Provident last month and was quickly rejected.

Energy suppliers should be subject to stress tests as tough as those imposed on financial services, Britain’s third biggest household supplier has said. SSE (SSE) FOLLOWurged Ofgem to toughen its plans for new tests on suppliers after a string of costly collapses. Suppliers should meet a minimum capital requirement to enter the market and should be subject to regular checks to demonstrate “ongoing capital adequacy”, the company said in a consultation response. “Energy is an essential service and it is difficult to justify having less stringent requirements in this market than in financial services.”

Debenhams (DEB)FOLLOW is scrambling to secure another £110 million from its lenders amid a boardroom power grab by Mike Ashley, sources said. The ailing department store is reportedly trying to get extra cash from the banks and other investors who are its creditors. An injection of fresh cash would likely see new stock issued to the lenders, meaning existing shareholders would control a smaller proportion of the firm and have less say over its future. Sports Direct International (SPD) FOLLOWowns 29.7% of Debenhams, so he will lose out under the scheme. Last week Ashley proposed sacking most of Debenhams’ board as part of a plot which would see him take the helm

A bombshell report on a toxic business turnaround unit at Royal Bank of Scotland Group (RBS) FOLLOWis expected to be published within days. Released by the City watchdog, the study aims to set the record straight on RBS’s notorious Global Restructuring Group (GRG). This rogue unit was meant to save struggling firms from collapse during the Great Recession, but is instead accused of hitting them with huge fees. There have been persistent claims that it wrecked companies to steal their assets and bolster RBS’s financial position in the wake of a £46 billion bailout by taxpayers. These claims were comprehensively dismissed by the FCA watchdog in an initial summary of its findings, and the final report is expected to conclude there was no systematic policy to destroy businesses. However, it is thought the study will highlight a large number of cases where RBS staff behaved badly – with appalling treatment of individual business owners at risk of losing their livelihoods.

Bullring owner Hammerson (HMSO)FOLLOW is selling Tesla and Mercedes cars in an effort to boost declining visitors to its shopping centres. Hammerson, which also owns the Metrocentre in Gateshead and Lakeside in Essex, has sold 2,000 cars over the past year by renting out shop space to brands which also include Rolls-Royce and Porsche. The property firm has even started offering test drives to potential buyers and driving lessons for younger customers on the rooftops of some of its shopping centres. Hammerson suggested that it could eventually use excess space in its centres for maintenance and servicing, so that customers can get an MOT on their car while shopping. Mark Bourgeois, managing director for UK & Ireland at Hammerson, said: ‘We expect this to be a real growth area for us over the coming years.’

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