One of Asia’s richest men has agreed to buy Greene King (GNK) in a deal valuing the brewer and pub operator at more than £4.5 billion. Li Ka-shing will add the maker of Abbot Ale and Old Speckled Hen to his burgeoning slate of British assets. The 91-year-old already owns the Three mobile phone network, Superdrug pharmacies and stakes in Northumbrian Water and the gas supply lines in Wales and the west of England. The 850p-a-share cash offer from CK Asset Holdings was 51% higher than last week’s closing price and values Greene King’s stock at £2.7 billion. After absorbing its £1.9 billion debt, CKA’s final tab will rise to £4.6 billion. Mr Li controls about a third of the Hong Kong-listed CKA, which was spun off from his conglomerate four years ago. He retired from the day-to-day running of his empire last year and has an estimated $31.7 billion fortune, according to Forbes.
Mitie Group (MTO) has stepped up its revival plan with the sale of its hospitality division to the Queen’s caterer. The outsourcer is offloading its catering section, which includes the Gather & Gather and Creativevents brands, to CH&CO, a royal warrant holder, for as much as £85 million. It will receive £73 million initially and a further £12 million over the next four years if performance goals are met. The deal is the latest attempt by Phil Bentley, chief executive since 2016, to simplify Mitie, which provides an array of services to companies, including building maintenance, cleaning, catering and security. Its market value has halved over the past three years amid an industry downturn that sent Carillion into liquidation and Interserve into administration.
The founder and chief executive of Benchmark Holdings (BMK), the struggling animal health company is to step down in the wake of a profit warning last week that wiped a fifth off its market value. Benchmark Holdings said that Malcolm Pye, 62, had decided a new boss was needed and that he would become a non-executive director at the end of November, where the board would retain “his extensive knowledge and experience”. The change comes after Benchmark warned last week that it faced “challenging conditions in the global shrimp and Mediterranean seabass and bream markets”, which had hit sales in its advanced nutrition business.
Tilney and Smith & Williamson broke cover yesterday to confirm that they had entered exclusive merger talks after being flushed out by media reports and comments by one of the wealth managers’ leading shareholders. AGF Management, a Canadian investment group that owns about a third of Smith & Williamson, issued a statement to the Toronto Stock Exchange on Sunday confirming that talks were taking place. That prompted Tilney and Smith & Williamson to make statements, although they noted that the talks could amount to nothing. A merger would create a group overseeing £45 billion of assets and a leading player in the investment market, behind St James’s Place, Rathbones, and Cazenove Capital. It would have 250 financial planners, 240 investment managers and more than 100 professional services partners.
Ocado Group (OCDO) shares rose after JP Morgan analysts said that it had a “superior model” to shop-based rivals. Arguing that the online grocery retailer had the lowest picking costs in the industry (automation in its warehouses means that it spends the least time putting orders together) and was at a tipping point in terms of profitability.
Sainsbury (J) (SBRY) denied claims that it was talking to internal candidates about a succession plan for its chief executive. Speculation about Mike Coupe’s departure has been rife since a proposed merger with Asda was blocked by the Competition and Markets Authority in April. The Sunday Telegraph suggested that possible candidates included John Rogers, who runs Argos, Simon Roberts, director of retail and operations, and Paul Mills-Hicks, commercial director of food.
The pubs sector was the toast of the index after Greene King (GNK) agreed to a takeover by CK Noble for £2.7 billion. Marston’s (MARS) added 9½p to 115p; Wetherspoon (J.D.) (JDW) gained 111p to £15.82; Mitchells & Butlers (MAB) rose 17½p to 324p; and NewRiver REIT (NRR), which owns shopping centres, retail parks and pubs, rose 6¾p to 154½p.
M&C Saatchi (SAA), the advertising and public relations group, issued a trading update after the market had closed on Friday in which it said that first-half results were expected to decline compared with 2017 and 2016. Last week it startled the City with warnings of a £6.4 million hit to its annual results owing to a “misapplication of accounting policies”.
CYBG (CYBG) rose 6½p to 148¼p. The lender said last month that shrinking net interest margins, the difference between what it earns from loans and pays for deposits, were likely to fall to the lower end of forecasts, but analysts at UBS said that the rates environment meant that they were more likely to rise.
Savannah Petroleum (SAVP) said that it had won approval for its takeover of Seven Energy after a $9 billion lawsuit against the Nigerian government.
Ixico (IXI) said that its revenue and profit for 2019 was ahead of market expectations. The stock is up about 45% this year and gained 9p to 43p yesterday.
Shares in Scancell Holdings (SCLP) fell yesterday after it withdrew a trial application in the United States for metastatic melanoma. Scancell Holdings said that the US Food and Drug Administration had requested additional information from Ichor Medical Systems, a partner whose delivery system technology is involved in the research. “Whilst there has been extensive dialogue between Ichor and the FDA, a timely resolution to the device-specific questions has yet to be agreed,” Scancell said. In April the company received regulatory approval to begin a phase II trial in Britain. It said yesterday that in order to allow that to continue, it had withdrawn the US application. Cliff Holloway, chief executive, said: “We will continue our dialogue with both Ichor and the agency and plan to resubmit the investigational new drug as soon as possible.”
Tempus – Fidelity China Special Situations (FCSS): Hold. Rounded portfolio that has performed well over the long run and should gain further despite recent underperformance
Tempus – RWS Holdings (RWS): Buy. Perfectly placed in specialist markets and a canny acquirer
