Share Tips, Bids and Rumours
Fosun abandons purchase of Israeli insurer Phoenix: Fosun International has abandoned the purchase of an Israeli insurance company, in the first apparent sign that the recent detention of the Chinese conglomerate’s Chairman has had an impact on its investment strategy.
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Fairchild rejects $2.6 billion Chinese offer: China’s appetite for U.S. assets was stifled on Tuesday after Fairchild Semiconductor turned down a $2.6 billion bid from Chinese state-backed enterprises over fears that the deal would be blocked by U.S. regulators.
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Newspaper Summary
The Times
Ageing nuclear plants to keep lights on for years to come: Four of Britain’s oldest nuclear power plants are to keep generating electricity for up to seven years longer than planned, renewing fears about the capability of Britain’s over-stretched nuclear safety regulator to cope with a growing workload.
Oil falls as traders snub producers’ freeze: Saudi Arabia reached a conditional agreement to freeze oil production with Russia, Qatar and Venezuela, but the move was met with scepticism from traders, who marked crude prices sharply lower.
Anglo sets wheels in motion for $4 billion sell-off: The vast majority of Anglo American, at one time was the world’s biggest mining group, is to be closed or sold off in an escalation of an overhaul plan announced alongside a $5.4 billion annual loss.
Game has it all to play for in Spain: Game Digital has pushed further into the competitive video game market after acquiring SocialNAT in Spain.
Landlords left to pick up bill for Brantano: Landlords of more than 50 Brantano stores are on the hook for tens of millions of pounds in lost rent a year after the footwear chain fell into administration.
BHS hopes backing is a blockbuster: The Owner of BHS has secured a loan from an American restructuring company best known for trying, and failing, to rescue Blockbuster.
No let-up for U.K. home buyers as prices keep climbing: A shortage of homes for sale, the rising demand for property and a lack of people moving house meant that house prices continued to climb in December, driven by sharp rises in London and the east of England.
Zoopla invests to become a one-stop-shop for property: Zoopla’s aim to become the “go-to” site for all areas of the real estate market took another step forward after it backed four start-up property technology companies.
The Independent
Ikea accused of dodging $1.1 billion in corporate taxes: Ikea has been accused of avoiding up to €1 billion ($1.1 billion) in corporate taxes between 2009 and 2014, according to a report by Green Party Ministers in the European Parliament.
Monopoly Ultimate Banking scraps cash with a tiny ATM that scans property cards: Monopoly-makers Hasbro have declared war on cheating players everywhere with their latest edition of the game.
Apple Pay in China: Payment system to be rolled out to new countries including France: Apple Pay is about to launch in China, according to reports, and could be coming to more countries too.
McDonald’s opens first Asian store selling beer in South Korea: A McDonald’s restaurant in South Korea will be the first in Asia to sell alcohol, according to the Korea Herald.
Reckitt Benckiser profits up by 4%: Nurofen Owner Reckitt Benckiser defied the gloom among many consumer goods firms as it posted strong full-year profits.
CityJet and Flybe join BA in threat to pull out of City airport if charges are raised: CityJet and Flybe have joined British Airways in threatening to pull out of City airport, if new Owners raise airport charges.
Financial Times
Anglo American raises asset sale targets amid commodities rout: Anglo American is targeting an extra $3 billion to $4 billion of asset sales this year as it plots a course to recover from the commodities rout by disposing of some of its largest and oldest business units.
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Powa Technologies missed staff and contractor payments: Powa Technologies, one of the U.K.’s most highly valued technology start-ups, held back staff salaries and payments to suppliers as the company struggled to secure new investment.
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Metro Bank to cut size of initial public offering: Metro Bank is slashing the size of its initial public offering by almost a fifth following the recent sell-off across the banking sector, investors in the U.K. challenger bank were told on Tuesday night.
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Oil group claims successful test on ‘Gatwick gusher’: Shares in the British company developing the so-called “Gatwick gusher” in the south of England jumped by a third on Tuesday after it said it had conducted a successful test on the well.
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ITV appoints Sir Peter Bazalgette as Chairman: Sir Peter Bazalgette, the television industry veteran who brought Big Brother to the U.K., has been appointed Chairman of ITV.
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Pharma whistleblower takes total payouts close to $100 million: A Louisiana doctor who has brought a series of whistleblower lawsuits against pharmaceuticals companies is in line for a windfall from Pfizer that would take his total payout from fraud settlements close to $100 million.
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Daimler extends CEO’s contract and appoints new R&D head: Daimler’s leadership is no longer in question after the company extended the contract of its Chief Executive and offered the clearest sign yet that it has a successor in place.
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Furla success underlines rise of accessible luxury: A jump in sales at Furla, the Italian maker of mid-priced handbags, has underlined the growing demand for so-called accessible luxury, even as global consumers pull back from spending on costlier brands.
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Apple prices $12 billion bond sale: Apple, the most valuable company in the world, completed the second largest bond sale of the year on Tuesday to fund its share buyback programme, as international debt markets began to reopen after a challenging start to the year.
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Lex:
Groupon: wanes and waxes: It advertises 51% off Brazilian waxes and 62% off a couples massage. But there is no such discounting for Groupon’s own shares, which rose 41% after Alibaba disclosed a stake. The coupon company may have boomed and busted four years ago, but it enjoyed its biggest percentage rise since going public in 2011.
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Apollo/ADT: calling bluffs: A few weeks ago, the Apollo Global private equity honcho and emerging sports mogul, said at an industry conference that his company would back away from buyouts.
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Anglo American: rocky road: Miner Anglo American has very high plumbing costs. Operating expenses to revenues touched a toe-curling 120% in its 2015 results, up from 99% the year before, compared with peers Rio Tinto and BHP Billiton on 80% and 83%, respectively.
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Lombard:
Going with the flow: The “Gatwick Gusher”, an oil find in Surrey, has been true to its nickname, at least for seven hours. “Light . . . sweet oil flowed naturally to the surface” during a test, according to U.K. Oil & Gas, an Aim-quoted shareholder.
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The Daily Telegraph
U.K. business gas supplies could be diverted to households in Europe, under EU crisis plan: British businesses could have their gas supplies cut off in order to keep households in other parts of Europe warm, under a proposed new EU law.
RBS ‘enjoyed £1 billion tax breaks after investing in Harry Potter’: Royal Bank of Scotland was handed £1 billion-worth of tax breaks after investing in Hollywood blockbusters such as Batman Begins, Troy and two Harry Potter films, according to reports.
German central bank Chief on collision course with Draghi over QE: Germany’s powerful central bank Chief has said quantitative easing is no longer appropriate for Europe, putting Berlin on a collision course with the European Central Bank over expanding stimulus measures to revive the single currency area.
‘Too big to fail’ banks are as big a threat as nuclear power plants, says Fed: U.S. banks are still “too big to fail” and may need to be broken up to defuse the “nuclear” threat they pose to the economy, according to a top Federal Reserve policymaker.
Billionaire activist investor Carl Icahn cuts Apple stake: Several big hedge fund backers of Apple, including billionaire activist investor Carl Icahn and David Einhorn’s Greenlight Capital, trimmed their stakes in the fourth quarter amid a decline in the value of the iPhone maker’s shares.
Investment banks’ profits to fall after market meltdown: Investment banks are set to suffer a fall in profits this year as the market ructions scare off large trades and deals, according to JP Morgan analysts.
Pernod Ricard targets British millennials with ‘unfussy’ new wines: The French drinks giant behind Jacob’s Creek is trying to entice young Britons put-off by the “fussy” wine industry with a new range that will sell for just £6 a bottle.
The Questor Column:
Steel woes and coal power blackout lead to profits collapse at largest U.K. coal miner: The parlous state of Britain’s coal and steel industry was laid bare in Hargreaves Services’ interim results. Pretax profits at the miner collapsed by 97% as management grapple with a downturn in the largest part of its business. Hargreaves is heavily exposed to a challenging industry. It mines coal in the U.K., buys and trades in the commodity from other mines around the world, processes coal to be used in steelmaking and operates a transport division that supplies power stations and other industries. The glut of oil and gas on global commodity markets has caused the price of coal to halve in the past five years. Coal-fired power stations in the U.K. are also under threat. The impending closure of Eggborough in North Yorkshire and the early closures of Fiddlers Ferry and Rugeley are yet another blow to the industry. The impact all this has had on Hargreaves has been devastating. Revenues fell to £175 million in the six months to the end of November, down from £351 million in the same period the previous year. Pretax profits dropped to just £842,000, from £15 million. The coal mining operations slumped to a £3 million loss, reversing an £8 million profit at the same stage a year earlier. Hargreaves is cutting production to about 350,000 tonnes from its seven mines in Scotland, and the Tower Colliery in Wales will also reduce output. The shares have dropped to record lows of 200p, but Chief Executive Gordon Banham believes investors are missing a trick, as the balance sheet is worth 450p per share. Hargreaves’ shares trade on 10 times forecast earnings, and at a wide discount to the net asset value. It is tempting to chase the value here, but in this industry it could quickly become a trap. Avoid. Hargreaves Services at 201p -36.9p. Questor says “Avoid”.
Approach ‘Gatwick gusher’ with caution: The “Gatwick gusher” has defied all its critics and produced oil, but Questor would still proceed with caution. The results of one well test do not translate into a viable long-term company. U.K. Oil & Gas Investments said its well at Horse Hill, Surrey, near Gatwick had managed to produce oil at the rate of 463 barrels a day. In addition, the oil was light sweet crude with a density of 40 API, slightly better than the 38 API Brent crude. The chance that an estimated reserve of 9.2 billion barrels has been unlocked at the site was enough to send the shares soaring 77% at one point before ending 41% up on the day. However, there are some caveats. The well was tested for just seven hours; so while this shows oil can be retrieved from a depth of 900 million unaided, it does not show the oil will flow for the months and years needed to operate a viable company. The problem for many onshore oil drillers is maintaining the initial pressure over an extended period of time. The other issue to consider is the cost to drill each well. A decision about commercial viability really needs all those parts of the puzzle. We have early promise here, but in order to maintain pressure the well diameter was reduced from the industry standard one inch to half an inch – about the width of a fingernail. Knowing how much oil might be underground and getting some to the surface is very different from actually recovering it at a price that generates a profit. Questor would advise proceeding with extreme caution for those who want to follow this early promise. Avoid. U.K. Oil & Gas Investments at 1.975p +0.575p. Questor says “Avoid”.
The Guardian
Interest rate rise judged unlikely as inflation increases only slightly: The prospects of a rise in interest rates from the Bank of England has receded after the latest official figures showed only weak upward pressure on the cost of living.
U.K. inflation rises on dearer alcohol and clothes: Inflation edged up to its highest rate for a year last month as rises in the price of alcohol and clothing pushed up the cost of living.
Talks about cutting oil output show Russians and Saudis feel the pain: Imagine for a moment that the U.S., EU and India announced that they were willing to freeze carbon emissions at their current level on the condition China did the same. Would anybody believe that this was a serious attempt to tackle global warming?
Oil prices rise temporarily on talk of output cut: Oil prices surged temporarily on Tuesday, reaching their highest levels in more than a week after Russia and Saudi Arabia provided the markets with hope of an eventual deal to tackle a deep supply glut.
Discounted starter homes plan ‘will fail to help most buyers’: The government’s plan to offer discounted properties will fail to provide affordable housing for most families, according to local councils.
Architect of 2008 bailout says U.S. banks still pose ‘nuclear’ threat to economy: America’s biggest banks present a “nuclear” threat to the U.S. economy and should be broken up, a Federal Reserve policymaker and architect of the 2008 banking bailout said Tuesday.
Daily Mail
Anglo American set to slash 85,000 jobs and sell off assets to reduce debt following £3.9 billion loss: Troubled Anglo American is to shed 85,000 jobs and reduce its mining operations by two-thirds as the catastrophic rout of commodities left it nursing a £3.9billion loss.
U.K.’s first click and collect service for cars boosts sales for Stratstone and Evans Halshaw: A scheme for car buyers to ‘click and collect’ from dealerships has been credited with giving a boost to chains Stratstone and Evans Halshaw.
EDF still dithering over Hinkley Point but announces it is to extend the life of of half its existing British nuclear plants: EDF will extend the life of half its British nuclear plants, safeguarding 2,000 jobs and shoring up national power supplies – but it has yet to make progress on Hinkley Point.
Vodafone fights to dodge £1.4 billion Indian tax bill for ‘offshore’ takeover deal a day after it told how it pays no corporation tax in U.K.: Vodafone has been hit with a £1.4billion tax bill from India, just one day after it laid bare how it pays no corporation tax in Britain.
Daily Express
Euro on the brink of disaster: Germany’s debt plans could send currency into meltdown: Germany could spark the Eurozone’s collapse with controversial changes to government debt and bailout rules, a leading economist has warned.
Safety systems maker cuts accident risk for construction firms and hauliers: Growing manufacturer Spillard Safety Systems’ war on vehicle blind spots is saving lives and lowering insurance costs for the construction industry.
Markets sent crashing by secret Russia and Saudi Arabia oil deal: A secret meeting between the world’s biggest oil exporters, including Russia and Saudi Arabia, has led to an agreement to freeze output at almost record high levels, sending prices and markets crashing once again.
The Scottish Herald
Record fall in food sales in Scotland amid washout puts retailers under pressure: Retail leaders in Scotland have called on Ministers to take action to boost the sector following a washout January when food sales fell at a record rate.
Research project aims to grow Scotland’s sensors industry: A research and development project that aims to put Scotland at the forefront of the growing £7 billion global sensors and imaging systems market has been awarded £2.6 million of funding from state development agency Scottish Enterprise.
Former Owner of Clydesdale Bank books hefty loss on disposal of lender: Clydesdale bank’s former Owner National Australia Bank has said it expects to record a loss of Aus$4.2 billion (£2 billion) on the disposal of the Glasgow-based lender and its Yorkshire stablemate.
App developer has big plans for Edinburgh office: A London mobile apps company plans to capitalise on Scotland’s tech talent by growing the size of its Edinburgh office five-fold.
Tomatin boosts turnover and visitor numbers: Tomatin Distillery in Inverness said it had increased visitor numbers by 40% after investing in its visitor centre.
Falling coal price fuels mine closure: An opencast mine in Dumfries & Galloway is to be closed as a result of falling coal prices.
The Scotsman
Castle Street buys data centre outfit for £20.2 million: Castle Street Investments has acquired data centre and network services firm C4L for £20.2 million in cash and shares.
Uni agrees global deal to accelerate start-ups: Edinburgh University’s commercialisation arm has struck a global partnership that aims to “supercharge” entrepreneurship and take students from business idea to start-up within 72 hours.
Wood Group makes first move into U.K. refining market: Energy services giant Wood Group announced its first deal in the U.K. petrochemicals sector.
Fuel prices drive inflation to 12-month high: The rate of consumer prices index (CPI) inflation rose to 0.3% in January, from 0.2% the previous month, official figures showed.
Scotland on-track to be U.K.’s fastest growing rental market: Patterns of home Ownership across Scotland and the rest of the U.K. are changing greatly, analysis from PwC has revealed.
Car dealer Peter Vardy rolls out heritage division: Scottish motor trader Peter Vardy is tapping into the booming market for automotive investments with the launch of a “heritage” dealership.
City A.M.
Local governments demand more control over starter homes after warning they will be unaffordable: Local governments have warned Westminster that discounted starter homes will be unaffordable to the majority that need them unless the scheme is given more flexibility.
Investor pessimism soars to three-year high as gold becomes second favourite asset class: Investors are at their most pessimistic for nearly three years, according to survey data released.
ABI warns Chancellor George Osborne against further hikes to Insurance Premium Tax in Budget 2016: Any further rise in Insurance Premium Tax (IPT) would “hit millions of people doing the right thing”, the Association of British Insurers (ABI) has said.
Royal Dutch Shell share price rises despite scrapping sale of south American oil assets: Royal Dutch Shell scrapped the sale of some of its South American oil assets, which were expected to net it around $150 million (£105 million), saying it couldn’t elaborate on the reasons why.
Redefine International raises £115 million to fund property deal: Redefine International has raised £115 million via a share placing to help fund its £437 million acquisition of a portfolio of properties from insurer Aegon’s U.K. Property Fund.
S&P: Low Brent crude prices not biggest threat to credit ratings of Russian oil majors such as Lukoil, Gazprom, Rosneft, Gazprom Neft, and Novatek: Ratings agency Standard & Poor’s has said Russian government policy poses the biggest threat to the country’s oil majors, not oil prices which have crumbled over the last 18 months.
U.S. private equity giant Apollo buys ADT to create $15 billion security firm: U.S. private equity firm Apollo said it is taking security equipment firm ADT private and merging it with another security company in a deal valued at $15 billion (£10.5 billion).
Circle Property makes £42 million debut on London’s junior market: A regional property company chaired by former Land Securities Boss Ian Henderson has listed on London’s junior market with a market value of £42 million.
North Sea oil workers will be given government funding to retrain as teachers as price rout continues: Funding will be available for North Sea oil and gas workers who wish to retrain as teachers, the Scottish education secretary Angela Constance announced.
