Fears have been raised that time has been called on the traditional British boozer after buyout giant TDR Capital made a £3bn swoop on the country’s biggest pub estate. EI Group (EIG), formerly called Enterprise Inns and boasting 4,000 pubs, struck a deal with Slug and Lettuce owner Stonegate – the branded bar chain group that TDR launched in 2010. The takeover values Ei’s shares, listed on the London stock market, at 285p each, a 38% premium to their pre-bid price. While netting some Ei shareholders a more than tenfold return on their investment, campaigners warned that the deal was the latest chapter in shrinking of the country’s traditional watering holes. It could lead to many pubs being closed and the end of the centuries-old tenanted business model, they said. Meanwhile, fears were raised over pubs would soon be concentrated in a small handful of pub companies. Stonegate said that its lawyers will write to competition authorities to seek permission for the deal.
The private equity companies bidding to take over Britain’s largest satellite company Inmarsat (ISAT) have put forward a number of “voluntary undertakings” to secure a deal with the British Government. Connect Bidco, a consortium including buyout giants Apax Partners and Warburg Pincus, said it would ensure that the majority of key strategic decisions are made within the UK and that key parts of its global network operations would remain in the country. Other legally binding commitments included supporting Inmarsat’s role as leader in the space sector. The news comes just two days after the Competition and Markets Authority started an investigation into the $3.4bn (£2.6bn) takeover to see whether the move would lessen competition in the market.
Brussels has given Vodafone Group (VOD) the green light for its $22bn (£18bn) takeover of parts of Liberty Global’s cable networks, clearing the way for the most valuable European telecoms merger in more than a decade. Competition regulators have been scrutinising Vodafone’s planned takeover of Liberty’s central Europe and German networks for months amid concerns it would lead to “higher prices, less choice and reduced innovation in telecoms and TV services for consumers”. The European Commission had, in particular, focused on what the takeover would mean for the German market, and whether it would reduce investment and broadcasters’ bargaining power in the region. In a statement on Thursday, Competition Commissioner Margrethe Vestager said the approval was “subject to remedies designed to ensure that customers will continue enjoying fair prices, high-quality services and innovative products.”
President Trump’s promise to lower prescription drugs prices has hit the buffers. His most-ambitious proposal, targeting rebates given to middlemen in the country’s highly complex medical system, has been abandoned. The plan looked likely to backfire and result in higher insurance premiums for the country’s seniors, so it was withdrawn last week. With other options apparently limited, pharmaceutical companies such as AstraZeneca (AZN) and GlaxoSmithKline (GSK) are now firmly in the sights of Democrats vying to become the candidate in next year’s presidential election. Cash flows – and therefore dividends – could be at risk. Democrat presidential candidates are seeking to cap the price that drugs companies can charge – and it looks like president Trump may move in this direction too, despite objections to “price controls” by many in his party. In March, he promised that Republicans were about to become the “party of healthcare” yet he has little to show on this front during his tenure in the Oval Office.
Investors in easyJet (EZJ) received a lift yesterday after the low-cost airline announced it had poached Ryanair’s chief operations officer, Peter Bellew, and allayed fears of weak summer trading amid overcapacity in the European short-haul market. Revenue at the Luton-based airline jumped 11.4% to almost £1.8bn in the three months to the end of June as passenger numbers rose 8%. It generated average revenue per seat of more than £61. The update was “upbeat … particularly against a tough economic backdrop and troubles at other airlines,” said Arlene Ewing, investment manager at Brewin Dolphin. “EasyJet remains a very well-placed and soundly financed airline operator,” she added.
Big tobacco received a boost after US-listed Philip Morris lifted its full-year profit forecast higher than even the most bullish analyst predictions following a strong second quarter. British American Tobacco (BATS) advanced 179.5p to £31.04, a rise of more than 6%, while Gauloises-maker Imperial Brands (IMB) added 46p to close at £21.42.
ITV (ITV) gained ground after a note from analysts at Liberum suggested that an acquisition of the Love Island broadcaster by Netflix could help the US streaming service to increase its presence in the UK market. “Content is to a pay-TV provider as oil is to a car, and if Netflix does not have sufficient content, then there is little reason for new subscribers to sign up,” they said.
Moneysupermarket.com Group (MONY) said it grew revenues by 15% to almost £200m in the first half of the year. The price comparison site maintained its guidance for the rest of the year but fell 32.9p to 369p after Peel Hunt downgraded the shares to “hold” from “add”, with the shares already well in excess of its 350p target price.
Questor: after the shock of Royal Mail (RMG) dividend cut, a rather more reassuring update. Questor Income Portfolio: ‘Nothing has changed’ was the company’s message to shareholders this week.
