JD Sports snaps up Footasylum for £90m. The retailer JD Sports Fashion (JD.) has agreed to buy its smaller rival Footasylum (FOOT) in £90 million deal. The offer values each Footasylum share at 82.5p, a 77.4% premium to Friday’s closing price. The price is still well below the flotation price of 164p a share in November 2017. The retailer has faced strong competition from JD Sports, Sports Direct and Asos as customers rein in spending amid Brexit uncertainty since it listed. Last year Footasylum issued two profit warnings in five months and was forced to cut prices after a disappointing run up to Christmas.
Sorrell’s S4 Capital reports 30% revenue growth. S4 Capital (SFOR), Sir Martin Sorrell’s new advertising venture, said that it was enjoying 30% revenue growth after signing up a number of new clients. In its maiden annual results, the company flagged up “significant” contract wins from the consumer goods giants Procter & Gamble and Nestlé and the food company Mondelez. S4 Capital said that revenue and gross profit had increased by more than 30% on a like-for-like basis in January. Sir Martin, who built WPP from scratch into the world’s largest advertising and marketing conglomerate, said that he was still on the hunt for acquisitions after buying two digital agencies last year.
Intu malls on Canada shopping list. Canada’s biggest pension fund is poised to raise its stake in Intu Properties’ Spanish shopping centres. Canada Pension Plan Investment Board is in talks with Intu Properties (INTU) over increasing its ownership of the shopping centres, which include Intu Asturias in Oviedo, northern Spain, and Puerto Venecia in Zaragoza, in the northeast. The pension fund already has a 50% stake. Intu also shares control of the Xanadú shopping centre in Madrid in a joint venture with Nuveen Real Estate. Intu’s share of the three centres was valued at £630 million at its latest results. It is also developing a complex called Intu Costa del Sol, near Malaga, with shops, hotels and restaurants.
German banks see way clear for €25bn merger. Deutsche Bank in talks with Commerzbank over tie-up. Deutsche Bank, one of the biggest employers in the City, and Commerzbank have begun talks about a possible merger that would be one of Europe’s largest financial sector tie-ups. In a statement Deutsche confirmed that it was in discussions with its rival as part of a review of strategic options to “improve the growth profile and profitability of the bank”. Christian Sewing, 48, who took over as chief executive after the Yorkshireman John Cryan, 58, was removed last April, elaborated on Deutsche’s motivation in an email to staff. “I have consistently stressed that consolidation in the German and European banking sector is an important topic for us,” he wrote. “We have to assess if and how we want to play a part in shaping it.”
Glencore offices raided in India over alleged price-fixing cartel. Glencore (GLEN) offices in Mumbai have been raided by the Indian competition regulator as part of an investigation into alleged price fixing of pulses. More than 25 officials from the Competition Commission of India are said to have searched the premises of the mining group as well as those of Africa’s Export Trading Group and India’s Edelweiss group over a suspected three-way pricing cartel. The investigation is thought to centre on allegations of collusion between the companies while importing and selling chickpeas and other pulses at a time when there was a shortage in India, according to Reuters.
Zero tariffs ‘will save £10bn’ under no-deal. Plans to scrap tariffs on the bulk of UK imports would reduce the short-term damage of a disorderly no-deal Brexit by up to £10 billion, according to economists. Official estimates of the hit to GDP from leaving the EU without a deal or a transition have been calculated on the assumption that Britain mirrors the EU’s external tariff schedule. However, the government said last week that tariffs would be made zero on all but 5% of imports. Zero tariffs would boost business by removing an import cost and reducing border frictions that could delay supply chains.
Interserve was handed work despite crisis. The government has been accused of “irresponsibility” as it emerged that Interserve (IRV) won £660 million worth of public contracts as it slid into a financial crisis that led to its collapse into administration last week. Analysis of government projects has revealed that the outsourcing giant was handed public jobs worth £432 million in 2017 and £233 million last year. The deals were awarded even while it advised investors of its financial problems.
Pre-pack an option for Debenhams. Lenders to Debenhams (DEB) could consider a “pre-pack” administration in an effort to protect the struggling department store from a campaign by Mike Ashley’s to gain control. Debenhams has been holding talks for weeks with its lenders about securing £150 million of funds before a wider restructuring of more than £500 million of debt next year. Gaining capital will be vital for Debenhams, which is in the midst of a turnaround. It is trying to secure a funding deal before a meeting next month where Mr Ashley, the chain’s largest shareholder, is seeking to install himself as chief executive and remove most of the board.
Daily Mail owner joins call to break up Google and Facebook. The dominance of the two platforms over the online advertising market was “seriously anti-competitive” and risked putting publishers out of business, said Daily Mail and General Trust A (Non.V) (DMGT). Despite having an audience of 12 million daily readers, Mail Online had yet to break even, it added. To increase competition, Facebook should be forced to sell Instagram and WhatsApp while Google should be ordered to spin off YouTube, its Chrome browser and Android mobile phone software, according to DMG Media. The government should also “remove its hidden subsidy” to the American giants by forcing them to pay “proper” corporation tax, it argued.
Fears that the low-cost gym market could soon run out of steam after a period of rapid expansion appear to be wide of the mark, according to a new report. Analysis of the market by PWC suggests that total capacity for budget gyms in Britain is between 1,200 and 1,400 sites, up from forecasts of about 1,000 previously. There are 654 low-cost gyms trading, implying scope for another 550 to 750 sites over the next few years. The number of low-cost clubs has increased more than tenfold from 58 gyms over the past eight years, with low-cost members accounting for about 25% of health and fitness memberships. The expanded capacity estimate assumes that market penetration by low-cost gyms will grow to between 5% and 6.9% of the population, up from 3.7% last year. PWC’s report was commissioned by the The Gym Group (GYM), the second largest low-cost operator behind Pure Gym Group (WI) (PGYM), with 24.2% of the budget market.
