The Telegraph 11/02/19 - Vox Markets | Vox Markets

The Telegraph 11/02/19

Italy explores its own bilateral Brexit deal with Britain as its economic crisis nears danger level. Italy is drawing up emergency plans to safeguard financial stability and keep trade with the UK flowing even if there is a no-deal Brexit, if necessary through a bilateral deal between Rome and London. The country’s insurgent Lega-Five Star coalition is increasingly worried that a mishandling of the EU’s Brexit crisis could push Italy’s fragile economy into a dangerous downward slide and risk a funding crisis for its sovereign debt at a treacherous moment. Premier Giuseppe Conte has told his Brexit Task Force to focus urgently on ports, airports, customs, and the handling of food trade, as well as the status of Italians living in the UK.

Flybe Group (FLYB) investor raised fears of ‘collusion’ before sale. Flybe’s biggest shareholder raised concerns about the airline’s sale several weeks before a consortium led by Virgin Atlantic swooped in with a one-penny-a-share rescue deal. London investment firm Hosking Partners expressed concern to investment bankers running the sale process that suitors were communicating with one another in mid-December. Connect Airways, a consortium of the Sir Richard Branson-backed airline, Southend Airport owner Stobart Group Ltd. (STOB) and US private equity firm Cyrus Capital, shocked investors on Jan 11 by ­offering just £2.2m to buy Flybe.

Sports Direct drops Patisserie Holdings (CAKE) takeover bid after two days. Mike Ashley’s Sports Direct International (SPD) has pulled out of a bid for collapsed café chain Patisserie Valerie after just two days, accusing its administrators of not providing enough access to its finances. Chris Wootton, the company’s deputy finance chief, wrote to the KPMG partner handling the administration yesterday to say it was withdrawing a bid of more than £15m after failing to gain “access to a data room, any financial information or meetings with management”. The letter claimed Sports Direct had been urged to raise its offer by as much as £2m, the Financial Times reported.

Boom time for Smurfit as cardboard proves king. Cardboard box maker Smurfit Kappa Group (SKG) and warehouse owner SEGRO (SGRO) are expected to deliver booming profits this week as both companies continue to benefit from the shift to online ­shopping. Analysts expect Dublin-based Smurfit to post pre-tax profits up more than half to €919m (£800m) on revenues of more than €9bn. Along with fellow FTSE 100 rivals DS Smith and Mondi, the company has ridden a surge of demand for paper-based packaging over the last five years that is expected to continue as brands seek out alternatives to plastic.

Metro Bank faces court action over accounting blunder. Metro Bank (MTRO) shareholders have asked the UK’s largest litigation-only law firm to consider representing them in a ­legal dispute after a loan blunder wiped £800m from its share price. The Sunday Telegraph has learnt that Stewarts Law, which brought a shareholder claim against the Royal Bank of Scotland over a fundraising that took place before its bailout, is looking into the matter after being contacted by ­investors. “We’ve been asked by a number of institutional investors to keep an eye on this,” said Clive Zietman, Stewart’s head of litigation.

Calls for new Barclays boss to shake up stale board. Barclays (BARC) incoming chairman is ­under immediate pressure to shake-up the bank’s board as major shareholders push for fresh faces at the top. Rothschild veteran Nigel Higgins, who replaces John McFarlane in May, has kicked off discussions with the bank’s top investors to discuss the FTSE 100 lender’s future. The low-profile banker is holding a string of one-on-one meetings in the month ahead as activist investor Edward Bramson seeks backing for a board seat.

Utilitywise facing collapse within weeks. Britain’s largest energy broker has just weeks to avert collapse, ­prompting fears for its 1,000-strong workforce. Utilitywise plc (UTW) is locked in talks with potential investors as it scrambles to raise fresh funds or a willing buyer for the company. Its lenders are threatening to wrest control of the business if its debts ­remain unpaid at the end of next month. The Tyneside-based middleman is under pressure to secure a rescue deal worth at least £10m. At a crunch ­meeting last week, ­Utilitywise told staff at its North Tyneside ­headquarters that they ­cannot ­guarantee that wages will be paid next month.

Interserve may opt for pre-pack administration if rescue derailed. Speculation is mounting that ­Interserve (IRV) could seek a pre-pack ­administration should its largest ­shareholder succeed in derailing a mammoth £480m debt-for-equity swap rescue plan. The ailing government contractor has insisted it will push ahead with the deal, which would all but wipe out ­investors. But it admitted on Wednesday that it was “actively preparing ­alternative plans” in case the deal is not approved after New York hedge fund Coltrane kicked off an attempt to oust most of the company’s board.

FirstGroup pockets £5.1m as rail passengers express anger. Road and rail giant FirstGroup (FGP) enjoyed a multimillion-pound payday from Britain’s most complained about train network. Hull Trains, which recently topped a rail regulator list for grievances, handed FirstGroup a £5.1m dividend, according accounts filed last week with Companies House. The network’s pre-tax profits were £3.5m on £31m of revenue for the year to March 2018. After its train services were hit by a series of breakdowns, Hull Trains received 261 complaints per 100,000 journeys, the Office of Rail and Road (ORR) found last October.

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Mentioned in this post

BARC
Barclays
CAKE
Patisserie Holdings
FGP
FirstGroup
FLYB
Flybe Group
IRV
Interserve
MTRO
Metro Bank
SGRO
SEGRO
SKG
Smurfit Kappa Group
SPD
Sports Direct International
STOB
Stobart Group Ltd.
UTW
Utilitywise plc