The board and biggest shareholders of BTG (BTG), the UK drugs company, have recommended a £3.3 billion takeover by a bigger American rival. BTG and Boston Scientific have agreed terms on an all-cash offer which values BTG’s shares at 840p. The offer represents a 36.6% premium to BTG’s closing price in London yesterday. BTG’s directors, which include Dame Louise Makin, its long-running chief executive, hold 0.3% of the shares and have recommended the offer to its shareholders. The offer has also been backed by Invesco Asset Management, Woodford Investment Management and Novo Holdings, which together hold a third of the shares.
Heavy losses from the takeover of Air Berlin’s operations at Tegel airport plus IT and Brexit costs have pegged back earnings at easyJet (EZJ). However, the short-haul airline still enjoyed a highly profitable year and the Stelios Haji-Ioannou, the carrier’s founder, who owns a 33% stake, will enjoy a dividend bonanza of almost £80 million. Easyjet is Britain’s busiest airline and the leading operator at Gatwick. Over the past year it has carried a record 88.5 passengers, 10% higher than in the previous year. It flies 315 aircraft, all Airbus planes, having added 36 in the past year. It employs more than 11,500 people throughout Europe.
One of the Restaurant Group (RTN) biggest institutional investors has come out against the proposed £559 million acquisition of the Wagamama chain. James Thorne, UK equities fund manager at Columbia Threadneedle Investments, said that he would be using the firm’s 7.7% stake in the Frankie & Benny’s and Chiquito operator to vote against the deal at next week’s shareholder meeting. “The strategic appeal of combining two good businesses may be understandable but the size and price of the deal at this point in the cycle throws up too many red flags,” he said. “The share price plunge reflects the depth of concern there is.” However, in a sign of how the deal is dividing opinion in the City, Glass Lewis, the proxy advisory group, has today recommended that shareholders vote in favour of both the proposed acquisition and the £315 million rights issue to fund it.
Pressure over pension fund after Johnston Press (JPR) sale. The new owner of Johnston Press, publisher of The Scotsman, The Yorkshire Post and the i newspaper, came under pressure yesterday when the Pension Protection Fund and MPs questioned the treatment of its 5,000 pension fund members. The fund said that it had “concerns” about the pre-pack administration and the sale of Johnston assets to JPI Media that was announced on Friday evening. It is understood to be concerned that the pre-pack took place only 48 hours before Johnston Press was due to make its monthly contribution into the scheme, a sum thought to be about £800,000, and is also looking at whether the assets were properly marketed to other potential buyers.
TSB picks new chief after tech meltdown. The recruitment of a chief executive will help TSB to put a disastrous year behind it, its chairman said yesterday. The bank has hired Debbie Crosbie, 48, a senior executive at CYBG (CYBG), as its new boss, two months after its previous chief was ousted amid anger at a bungled transfer of millions of accounts that led to an increase in fraud incidents and thousands of customers switching to other banks. Richard Meddings, TSB’s executive chairman, said that the appointment of Ms Crosbie was a “big step forward” and would allow it to get on with repairing the damage to its reputation. “This is the sword that cuts the mesh of a whole series of different issues,” said Mr Meddings, who has been running the group since Paul Pester stepped down as chief executive in September.
BHP Billiton pays out £300m to settle Australian tax dispute. The world’s biggest mining company has agreed to pay about £300 million to solve a long-running dispute with Australia’s tax authorities. said that it had made “no admission of tax avoidance” as part of the settlement over its Singapore-based marketing business, but had agreed to changes that would result in it paying an increased rate from now on. The Australian Taxation Office, which originally had sought more than A$1 billion, said that the “landmark” settlement of A$529 million set a precedent for the industry and meant that all profits from BHP’s sale of Australian commodities would now be taxed in that country.
Nestlé shrugs off speculation and stays sweet on its British brands. The chief executive of Nestlé has reaffirmed the company’s commitment to its British confectionery business, only months before Britain is to exit the European Union. Mark Schneider, who took charge in January last year, said that the food manufacturing group’s UK business, which includes Rowntree’s, was performing extremely well in a challenging market. “I have been very impressed with how the UK management team has been performing under difficult conditions, and that is in part driven by certain categories, with one good example being our confectionery category,” he said.
Vodafone chief vouches for Huawei in security debate. The new boss of Vodafone Group (VOD) has backed Huawei, the Chinese telecoms supplier that is under scrutiny from the government amid concerns about risks to national security. Nick Read said that Huawei was “actively engaged” with British and European cybersecurity agencies. “I think they’re doing everything possible to ensure they remain a very serious and credible supplier,” the Vodafone chief executive said. The government recently warned companies that supply chains for new fifth-generation, or 5G, networks that they could be affected by a review of telecoms infrastructure. Huawei was not named in the letter sent last week by the Department for Digital, Culture, Media and Sport and the national cybersecurity centre. It stated that the review was designed to ensure that national infrastructure remained “resilient and secure”.
It is still “too early” to invest in domestic British stocks such as banks, housebuilders, retailers and property companies, analysts at JP Morgan warned yesterday. Royal Bank of Scotland Group (RBS), Countryside Properties (CSP) and Marks & Spencer Group (MKS), among the worst affected in their sectors last week, were steady yesterday as investors awaited further news on Brexit talks. However, JP Morgan said that investors should hold off buying back into domestic stocks. Its analysts argued that even if Britain did agree a deal with the European Union, the likelihood of it passing in the House of Commons initially looked slim. On the road to the eventual rubber-stamping of a deal, if the perceived risks of either a no-deal Brexit, leadership challenge or new elections arose, the analysts said, then UK domestic stocks would suffer a further sell-off. Only when a deal appeared to be secured would domestic stocks be “investable” again, they said, as the downside risks would disappear. At the same time, a rising pound would constrain the performance of exporters.
Indivior (INDV) rose 4p to 206½p after announcing that Perseris, its schizophrenia treatment, had been approved by the US Food and Drug Administration for the treatment of adults.
Dignity (DTY) edged up, too, after it emerged that John Jakes, an investor who founded the Acorn Mobility Services stairlift company 25 years ago, had continued to raise his stake in the business, from 5.3% to 6%, according to a stock exchange filing. Dignity’s profits have been hit by a price war among the industry’s largest players.
Sound Energy (SOU) fell by 6p, or 24%, to 18p after it failed to find producible gas at the first of three exploration wells in the onshore Tendrara area.
Versarien (VRS) rose 7½p to 130p after announcing progress on its plans to establish a manufacturing centre in China. The company expects to receive funding from Jinan High-tech Financial Investment as part of a joint venture to manufacture and sell Versarien’s graphene products in Jinan, in eastern China.
Mears Group (MER) slips down a few rungs. Shares in a social housing and property maintenance contractor fell by almost 9% yesterday after it announced a discounted placing to fund the purchase of Mitie’s social housing business. Mears Group raised £22.5 million from a placing of 6.8 million shares priced at 331½p a share — a 9.9% discount to Friday’s closing price. It will be used to buy assets and contracts from the property management division of Mitie, the outsourcing group. A further £12.5 million will be paid subject to conditions linked with earnings in the two years after completion. The division, which provides repairs and maintenance services to social housing providers, has been loss-making in the past 18 months. Mears said that it was working on a turnaround plan. Mitie Group (MTO) said that proceeds from the sale would be used to reinvest in its main businesses, strengthen its balance sheet and accelerate repayment of a pension scheme deficit. Analysts at Liberum said: “We have little doubt the business will be worth more in Mears’ hands than Mitie’s.”
Tempus – Faroe Petroleum (FPM): Buy. Faroe remains one of the more compelling independent players in Britain and Norway
Tempus – Restaurant Group (RTN): Hold. Shareholders should back the chief executive
