The Times 12/03/19 - Vox Markets | Vox Markets

The Times 12/03/19

G4S (GFS) has received unsolicited bids to acquire its cash-handling business and is planning to begin separating the unit in the second half of the year. The struggling outsourcer launched a review of its cash business in December, paving the way for a potential sale or initial public offering. In an update alongside its full-year results this morning, G4S said that it had received “expressions of interest” but that it was too early to determine whether they would lead to a deal and that it continued to “pursue all strategic options”. The potential suitors were not named. Analysts at Jefferies are forecasting a price of up to £1.9 billion for the business. G4S added that the separation might require shareholder approval and that it planned to provide more clarity on the future of the cash business at its half-year results in August.

888 Holdings (888) generated record underlying earnings last year, despite stiffer regulation and higher taxes in its key UK market. The online gambling operator said that although the UK remained an important market it was reducing its reliance on it through regional diversification, having recently launched in Sweden and Portugal. It said that trading in the UK started to improve towards the end of last year and that those positive trends had continued into the first quarter of this year, with revenues up 10 per cent at constant currency. Itai Pazner, who was recently promoted to chief executive, admitted that more tax increases and regulations were coming but added: “The UK is now well positioned. We’ve slightly changed our strategy — we’re aiming more at the mass market so we’re less reliant on high-value players and that’s starting to pay off, with double-digit growth in new players.”

Ryanair Holdings (RYA) to exclude British investors and institutions from holding its shares. Investors to lose voting rights under no-deal Brexit. Britons will no longer be welcome on the shareholder register of Ryanair should the UK leave the European Union on March 29 without a deal on political and trading arrangements. On that date, British investors who hold stock in the airline will lose their voting rights, their holdings will be classified as “restricted shares” and they will be barred from buying new shares. Europe’s busiest short-haul airline said that it was taking the action to ensure that in the event of a no-deal Brexit, its majority ownership would remain in the hands of EU investors, a stipulation under Brussels laws to retain a flying licence.

A large shareholder in Standard Life Aberdeen (SLA) has questioned the judgment of Martin Gilbert, its co-chief executive, in taking an additional role advising Revolut, the controversial financial technology company. Mr Gilbert’s decision to advise Nikolay Storonsky, 34, Revolut’s chief executive, raised eyebrows because Standard Life is battling to improve its performance. Its share price has fallen by more than 40% over the past year. The top ten investor said of Mr Gilbert’s involvement with Revolut: “He has got quite a lot on his plate. It doesn’t fill any of us with great joy when you look at the share price and look at him running around doing that sort of stuff.”

Northgate (NTG) boss faces crunch meeting after investor Crystal Amber’s move. An activist investor in a van hire company has called for a shareholder meeting in an acceleration of its campaign to drive the chairman off the board. Crystal Amber Fund yesterday issued a notice to the board of Northgate requisitioning a meeting next month and tabling resolutions to remove Andrew Page, the chairman, and appoint Steve Smith, a former chief executive, as a non-executive director. The notice was accompanied by stinging criticism from Richard Bernstein, 56, investment adviser to Crystal Amber, who accused Mr Page, 60, of presiding “over multiple profit warnings, a culture of inept communications with the market” and inadequate stewardship. “As chairman, he inherited a business with a strong market share in a healthily growing sector, yet his tenure has left the company totally lacking in strategic direction and languishing in the doldrums,” Mr Bernstein said.

British Land Company (BLND) chairman John Gildersleeve is heading for the door. More change is looming at the top of British Land after John Gildersleeve announced yesterday that he will step down as chairman. Mr Gildersleeve, 74, a member of the listed property developer’s board since 2008, will leave in July after six years as chairman. He will be replaced by Tim Score, 48, the former chief financial officer at Arm Holdings, the software company. Mr Score has held a non-executive role at British Land since 2014. The property developer said that Mr Score’s succession had been steered by the company’s nomination committee, led by William Jackson, an independent director, and advised by Russell Reynolds Associates, an external recruitment agency.

Unilever (ULVR) chief Paul Polman paid €11.7m despite failed restructuring. Paul Polman, the former head of Unilever, took home €11.7 million last year, including an annual bonus of nearly €2 million, in a year in which the company faced heavy criticism over its since-abandoned simplification strategy. The 2018 annual report for the consumer goods company showed that Mr Polman, 62, had received a salary of €1.6 million, a bonus of €1.9 million and long-term incentive awards of about 7.7 million.

Ex-Superdry chief Julian Dunkerton not welcome back, bosses tell investors. Shareholders in Superdry (SDRY) have been urged to reject a proposal by its co-founder to return to the retailer’s board amid an increasingly acrimonious top-level dispute. The fashion group, best known for its branded hoodies and jackets, said that it would be “extremely damaging” if Julian Dunkerton, who is also the company’s largest shareholder, returned as a director. It added: “Specifically, it would lead to a strategy that would fail and result in a return to a narrow and concentrated range mix, high option count and low rate of sale model with disregard for consumer and data insight.” In a further strongly worded warning to investors, it said that if Mr Dunkerton returned, it would be “divisive” for the company because it would “reintroduce a leadership style that does not fit within the open-minded collaborative culture, values and operation of the company, lead to dysfunctional relationships with the board and management, damage morale across the business and cause departures of key personnel, including from within the board”.

Accounting error increases Kier Group (KIE) debt. A struggling construction contractor has revealed that its debts are tens of millions of pounds greater than previously stated after an accounting error that further frayed investors’ nerves. Kier Group said yesterday that its net debt stood at £180.5 million at the end of its half-year on December 31. In a trading update in January, it had said that the figure was £130 million after a poorly taken up rights issue before Christmas. Shares in Kier fell by as much as 18% yesterday before closing 59¾p, or 12%, down at 437½p, valuing the company at about £810 million. It meant that the shares were back at their early year level, surrendering gains made since the deeply discounted rights issue that was priced at 409p.

IGas Energy (IGAS) turns up heat on shale gas exploration at Misson. A shale gas explorer has announced a discovery at its site in north Nottinghamshire, but has added that set limits on quakes caused by fracking could prove “prohibitive”. Shares in Igas rose by 8½p to 86½p after it said that it had found “significant gas indications” in the shale rocks in Misson and would consider submitting a planning application this year to frack at the site. It came as the industry lobby group increased its estimate of how much gas could be produced from British wells in light of recent work by Cuadrilla in Lancashire. UK Onshore Oil & Gas said that it believed fracking in Britain could be as productive as it is in the United States, where there are abundant supplies — but only if it were allowed to take place “unhindered” by rules on earthquakes.

Clarkson (CKN) sinks after warning of gloom ahead. About £100 million has been wiped off the value of one of the City’s leading shipping brokers after it warned that it would be hit by international political risks this year. Shares in Clarkson tumbled 325p to £22.65 after the FTSE 250 company told investors that the effect of Brexit on currency markets was only one of its worries. That reduced its market capitalisation to about £687 million last night.

WPP (WPP) signs Microsoft chief Cindy Rose to help battle with online giants. WPP is expected to say today that it has added Cindy Rose, the chief executive of Microsoft in the UK, to its board as it continues to battle a seismic shift in the sector. Ms Rose, 53, will become a non-executive director of the advertising giant from April and will join its audit committee, The Times can reveal. Her appointment comes at a pivotal time for the FTSE 100 stalwart. It lost more than half of its value last year as clients cut spending and forged closer ties with Google and Facebook, which are posing a threat to advertising conglomerates. Its shares, worth more than £13 in January last year, closed up 1½p at 855p.

Cairn Energy (CNE) still waiting for Indian tax row ruling. A decision on Cairn Energy’s long-running $1.4 billion tax dispute with the Indian government has been delayed still further. The oil and gas explorer had hoped that the result of an arbitration process would have been published by now, as the hearings were concluded in August. Yesterday, however, it said that the arbitration panel had said that it still did not know when it would rule on the dispute. The tax dispute has been running since 2014, when the Indian government brought a retrospective claim relating to a 2006 reorganisation of the Cairn India subsidiary. The company launched a counterclaim for compensation, saying that it had been unable to sell its remaining holdings in India or receive dividend income from them.

Provident rubbishes Non-Standard Finance’s ‘misleading’ takeover bid. The doorstep lender trying to fend off a £1.3 billion hostile takeover from a smaller rival has hit back again after its suitor sought to ratchet up the pressure by formally tabling an offer. Non-Standard Finance (NSF) launched an all-share bid for Provident Financial (PFG) last month. It published its offer document on Saturday, the earliest opportunity under takeover rules, and set in motion a 60-day timetable for Provident’s shareholders to accept the deal. “Since I stepped down, Provident has lost its way,” Mr van Kuffeler claimed in the offer document. “The offer is not in the interests of all shareholders and lacks both commercial logic and regulatory understanding,” Patrick Snowball, chairman of Provident, said yesterday. Provident shareholders have until May 8 to accept the bid from Non-Standard Finance, which is offering 8.88 new shares for every share in Provident.

Lenders to Interserve (IRV) are considering a plan to sweeten the terms of a proposed financial rescue to make it more attractive for shareholders to take part, yet the pressure on the company’s share price showed no signs of going away yesterday. In what would mark the second time that the contractor has offered improved terms to its shareholders, the lenders are reviewing whether to offer them a greater stake after the restructuring. The lenders have agreed to forgive about £485 million of Interserve’s debts and to inject up to £110 million into the business as part of a deal that would hand them 95% of the equity. It emerged yesterday that the group, which also includes a collection of hedge funds, is weighing up whether to cut that in the hope that shareholders will back the move at a crunch vote on Friday.

 

NMC Health (NMC) regained its poise after the private healthcare provider in the United Arab Emirates suffered heavy losses last week, even though it had reported record profits. Its shares rose 96p to £26.84, with some help from results at Hutchison China Meditech Ltd (HCM), the pharmaceuticals operator, that were better than expected. Hutchison rose 120p at £41.40.

In the midcaps, bank mergers were the story of the day after it emerged that OneSavings Bank (OSB) and Charter Court Financial Services Group (CCFS) were in advanced talks to create one of the biggest specialist smaller lenders and a potentially serious challenge to the big high street banks. One Savings rose 40½p at 410½p, while Charter Court did even better, adding 34¼p to end the day at 340½p.

Debenhams (DEB) is in advanced talks to secure another £150 million loan from its lenders. The struggling department stores chain, which is fighting for survival, said that £40 million of the money raised would refinance a bridge facility that it secured last month to help it to trade through Easter. If Debenhams secures the new facility, it would be in addition to its £520 million of long-term debt, made up of £320 million of loans and £200 million of bonds that are due to be repaid next year.

 

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Mentioned in this post

BLND
British Land Company
CCFS
Charter Court Financial Services Group
CKN
Clarkson
CNE
Cairn Energy
DEB
Debenhams
GFS
G4S
HCM
Hutchison China Meditech Ltd
IGAS
IGas Energy
IRV
Interserve
KIE
Kier Group
NMC
NMC Health
NSF
Non-Standard Finance
NTG
Northgate
OSB
OneSavings Bank
PFG
Provident Financial
RYA
Ryanair Holdings
SDRY
Superdry
SLA
Standard Life Aberdeen
ULVR
Unilever
WPP
WPP