Daily Mail - 30.07.2019

Daily Mail, Tuesday, July 30, 2019

LSE surges to

record high as

it bids £22bn

for data firm

by James Burton

Amigo boss

gets golden

hello worth

up to £2.2m

AMIGO’S new boss is get-
ting a golden hello of up
to £2.2m.
Hamish Paton will get
£1m in shares from the
high-interest lender to com-
pensate for bonuses he gave
up when he left rent-to-own
retailer Brighthouse.
Another £325,000 cash
payment will go towards
the cost of moving his fam-
ily closer to Amigo’s head
office in Bournemouth.
And he will be handed up
to £800,000 in his first long-
term bonus payment after
the lender announces quar-
terly results next month,
with the final value depend-
ing on its performance.
Paton – who joined Amigo
in May as chief commercial
officer before being pro-
moted – will be on an
annual pay package of up
to £1.8m.
He previously worked for
scandal-hit Brighthouse,
which sells white goods
such as fridges to struggling
customers in exchange for
monthly payments.
Brighthouse has been
repeatedly criticised for
saddling vulnerable con-
sumers with huge charges,
and is facing a crackdown
from the City watchdog.
Paton served as a senior
executive in charge of trade
and marketing before
becoming boss in 2016.

SHARES in the London

Stock Exchange surged to a

record high after it unveiled

a £22bn mega-deal.

The LSE is buying financial

data business Refinitiv in a bid

to bulk up and take on Wall

Street rivals.

But the takeover is likely to

face close scrutiny from compe-

tition authorities.

Traders were delighted at the

move, sending LSE shares up

15.3pc, or 870p, to a record clos-

ing price of 6542p and adding

£3bn to its value.

Refinitiv is one of the world’s

biggest providers of data such

as share price information for

traders. It was previously owned

by financial news company

Thomson Reuters but was spun

off as a separate company last

year, with private equity busi-

ness Blackstone taking a 55pc

stake and Reuters holding the

rest of the stock.

The acquisition by LSE will

create a behemoth with turno-

ver of £6bn a year and is a coup

for boss David Schwimmer. It

will be the only real rival to data

company Bloomberg. Arnaud

Giblat, of research firm Exane,

said the deal could push LSE

earnings up by as much as

30pc.

However, competition watch-

dogs in London and Brussels

are likely to launch an investiga-

tion within days examining

whether the deal could concen-

trate too much power in the

hands of one company.

It could even lead to the plans

being blocked completely.

However, Berenberg analyst

Chris Turner said that this was

unlikely because regulators

have rarely intervened in data

company tie-ups before.

He said: ‘European competi-

tion rules are generally support-

ive of consolidation in the infor-

mation services space.’

LSE has been one of the best

performers in the FTSE 100 over

the past two decades.

Shares are up 1,563pc since

2001, meaning that excluding

dividends, an investor who put

in £1,000 at the time would now

have £15,630.

NEW MINISTER’S LINKS TO

ARRESTED BUSINESSMAN

N

EIL Woodford is a fund

manager without shame.

The former pin-up of the

stock picking industry has

been all but invisible since

he was required to shut-up shop at

his flagship Woodford Equity Income

Fund in early June. That closure has

been extended until December.
It is a cruel blow which separates sav-
ers from their money while Woodford
disgracefully will collect another £12m
in fee income.
Another outrage is that the financier, who
together with a colleague has extracted a
shade under £100m in dividends from the
fund management group since it was
founded, has raised £1m through share
sales at the quoted Woodford Patient Capi-
tal Trust.
Woodford’s excuse for selling is that he
has a tax bill to meet. It is mighty curious
that someone who has grown so wealthy on
the back of investors could not pay his taxes
without delivering another jolt to hapless
shareholders in Patient Capital.
The normal behaviour of a cornerstone
investor in a company experiencing difficul-
ties is to demonstrate confidence by buying
more shares. Woodford has done precisely
the opposite, selling 1.75m shares in a trust

which has seen its value plummet by 30pc

in a few months. He has piled on the misery

as the shares dropped a further 3pc.

In many ways Woodford is an extremely

lucky fellow. If regulators at the Financial

Conduct Authority and the Bank of Eng-

land showed more grit, he would be out on

his ear and replaced with one of the great

and the good from another City firm.

By delaying forceful action and allowing

Woodford to stagger on, they risk contagion

of the kind seen in the financial crisis.

One of the most disturbing aspects of the

whole Woodford affair has been watching

the self-indulgence of those involved.

Mark Dampier, the Hargreaves Lansdown

(HL) cheerleader for Woodford, sold shares

alongside his family in the broker to the

value of £5m days before the scandal

erupted. Stephen Lansdown, one of HL

founders, sold £130m worth of stock, as the

scale of the troubles at Woodford emerged.

The board of the Patient Capital Trust

headed by Susan Searle has been as feeble

as the regulators. As chairman Searle

tamely allowed the Equity Income fund to

dump assets in Patient Capital as Woodford

struggled to increase liquidity.

Patient Capital let it be known it was look-

ing to replace Woodford as manager of the

fund and is still pledging to do so.

It should have acted far more decisively to

bring another manager in, as St James

Place did just days after events unfolded.

Even now Searle and her fellow directors

are making excuses, describing Woodford

as a ‘reluctant seller’.

Investors in the Equity Income Fund

should be so lucky as to be able to free up

their cash.

Everything about this affair, including

alleged conflicts of interest at Link Asset

Services, the authorised corporate director

monitoring rules, is malodorous.

Decisive action is needed.

London calling

FInALLy, a London Stock Exchange deal

that can be supported. The LSE’s little

known chief executive David Schwimmer, a

refugee from Goldman Sachs, is seeking to

agree a £22bn takeover of information pro-

vider Refinitiv, the main rival to Bloomberg.

The deal is complex and will load the LSE

with debt. But it will finally give the LSE the

strategy it has lacked over the decades as it

has been besieged by potential buyers.

If completed, the transaction opens up

fantastic new opportunities in financial

data, reduces dependence on the UK equi-

ties and indexes and bolsters exposure to

bond and foreign exchange trades.

The transaction also adds to the LSE’s

exposure to the rest of the world, fitting into

the ‘global’ Britain image as Boris Johnson’s

government dashes towards Brexit.

Should Schwimmer be successful, it will

keep overseas boarders, such as the new

york Stock Exchange owner ICE, at bay.

Investors showed support marking LSE

shares up 15pc. That rarely happens to the

stock of the buyer.

Exit strategy

SIMOn Fox doesn’t believe in hanging

around when his time is up.

He rapidly resigned from HMV before it

ran into difficulty.

Having delivered robust results he is leav-

ing Mirror and Express owners Reach on

August 16 after a seven year stretch.

He is to be replaced by former Ladbrokes

boss Jim Mullen.

How efficient.

Woodford helps himself

Alex

Brummer

CITY EDITOR

Reach chief leaves job

REACH’S boss is stepping
down next month after
seven years in charge.
Simon Fox will leave the
newspaper publisher, which
owns the Mirror, Express
and Star titles, on August

16. The 58-year-old will be
    replaced by Jim Mullen, the
    former boss of gambling firm
    Ladbrokes Coral, who previ-
    ously worked at Rupert
    Murdoch’s news Interna-

tional. Fox’s exit comes after

he oversaw a series of major

deals at Reach, formerly

known as Trinity Mirror.

It acquired local newspa-

per owner Local World for

£220m in 2015 and in 2018 it

bought Richard Desmond’s

northern & Shell publish-

ing titles, including the

Daily Express, Sunday

Express, Daily Star and OK!

Magazine, for £184m.

FIVE banks are facing a

£1bn class action lawsuit

over claims they manipu-

lated foreign exchange

markets.

Barclays, Citibank, Royal

Bank of Scotland, JP Mor-

gan and UBS are being

sued by pension funds,

asset managers, hedge

funds and major compa-

nies, US law company

Scott+Scott said. They have

been accused of engaging

in illegal manipulations

between 2007 and 2013.

The claim is being funded

by litigation specialist

Therium Capital Manage-

ment and led by Michael

O’Higgins, former chair-

man of the Pensions Regu-

lator. The banks declined

to comment.

A TOP executive at Metro

Bank has been poached by

rival Revolut.

Finance director David

MacLean serves as second-

in command to Metro’s chief

financial officer David Arden.

But he is jumping ship to

online-only finance firm

Revolut, where he will

become chief financial officer

himself. The move follows

an 88pc drop in Metro’s

share price over the past

year as it battles the fallout

from an accounting error.

MacLean is likely to face

challenges at Revolut too,

which is grappling with

accusations it has a cut-

throat corporate culture.

Metro Bank has also

announced it is opening a

branch in Birmingham, the

first of four it plans to set up

in the Midlands this year.

Banks face class action Metro man poached

Page 67

BRITAIN’S new veterans minister

earns £85,000 a year from a company

linked to the scandal over collapsed

London Capital & Finance.

Johnny Mercer is employed by The

Crucial Group, a training firm set up by

businessman Paul Careless, who was

later arrested by fraud investigators.

On Sunday, former army officer

Mercer (pictured) was appointed as

a junior defence minister to oversee

veterans’ affairs.

Sources said he was still deciding

whether he must give up his role as a

director of Crucial. Crucial was

founded by Careless (pictured inset

right with Mercer) to train veterans

in cyber-security. But he severed ties

with the firm after becoming

embroiled in a scandal over collapsed

savings business LCF, which went bust

owing £237m to 11,500 people.

The ex-policeman ran a marketing

business which promoted toxic bonds

to LCF savers and made £58m in fees.

He was arrested earlier this year as

part of a probe into the failure of LCF,

and later released without charge.