Unilever braced for showdown with shareholders
Top shareholders in Unilever
have warned that the
household goods giant is
facing a crunch week as it
prepares to face questions
over its botched swoop on
Glaxo Smith Kline.
The FTSE 100 owner of
Marmite and Domestos
bleach was met with a fierce
backlash last month after The
Sunday Times revealed it had
made a £50 billion bid forGlaxo’s consumer health
business. The shares fell
almost 7 per cent, and
Unilever’s chief executive
Alan Jope was forced to
backtrack and promise not to
offer more than £50 billion.
Glaxo is thought to want
closer to £60 billion, leaving
the deal all but dead.
After Unilever reports full-
year results this Thursday,
management, including Nils
Andersen,the chairman, are
expected to embark on arenewed charm offensive
with shareholders; they have
already been meeting
investors in the weeks since
the leak of their tilt at Glaxo.
A City source said the results
were “crucial” for
shareholders waiting to
decide whether to back the
company’s plans.
“They’re under the
microscope,” said one top
investor. “They’re under a lot
of pressure with the results.”
Unilever is forecast toreport a rise in turnover to
€54.5 billion (£46 billion),
from €52.1 billion last time,
and an increase in underlying
operating profit to €9.9 billion
from €9.5 billion.
Analysts will be looking to
see how far the company has
been able to push through
price increases amid soaring
input costs.
However, analysts at UBS
said “sentiment towards the
management is
deteriorating”.Bert Flossbach, founder
and chief investment officer
at Flossbach von Storch, a
top-ten Unilever shareholder,
told the Financial Times that
it should “seriously think
about splitting the company”.
Unilever had been
attempting to repair its
relationship with the City
after its aborted plan to shift
its headquarters to
Rotterdam in 2018. At the
time, institutions turned to
the Investor Forum, whichallows investors to speak to
companies with one voice, to
voice their anger over the
decision. The Anglo-Dutch
Unilever ultimately
performed a U-turn and
unified in London instead.
The latest furore over the
Glaxo bid has piled pressure
on Unilever’s board.
US activist investor Trian
Partners has built a stake in
the company, which could
pave the way for a break-up.
Unilever has alreadyannounced a reorganisation
and plans to cut 1,500
management positions as it
splits the company into five
divisions, including ice cream
and nutrition.
Shares in Unilever closed
on Friday at £38.01, valuing
the company at £98.4 billion.
l Glaxo Smith Kline is due to
focus on its pharma division
when it reports full-year
results on Wednesday. Sales
are tipped to be £34.1 billion,
with £24.5 billion from “NewGSK”, the part of the
company that will be left
when it splits off its consumer
goods division.
The focus is expected to be
on pharmaceuticals and
vaccines, while a capital
markets day on February 28
will provide more details
about the new consumer
division.
Pre-tax profits for the
combined group are
expected to rise to £8.8billion
from £8 billion.Sabah MeddingsBUSINESS
&MONEY
February 6, 2022 · thesundaytimes.co.uk/business thesundaytimes.co.uk/money
MORE THAN A GAME
PAGE 5
BRITAIN GETS
READY
TO BLAST OFF
PAGE 7
PAGE 5
I WAS ON £200 A
WEEK UNTIL I WON
X-FACTOR
MATT CARDLE
MONEY PAGE 16
Ministers have been accused of “wasting”
more than £200 million of taxpayers’
money after ditching an agreement with
French vaccine-maker Valneva to buy
100 million doses of a Covid vaccine.
The UK government ordered the jab,
under development by Valneva, in 2020.
However, after rolling out vaccines by
Pfizer, Moderna and AstraZeneca, it
scrapped that order in September last
year. Valneva said ministers had thrown
it “under the bus” when the €1.4 billion
deal was pulled. Shares in the company,
which is listed on Nasdaq in the US as well
as in Paris, fell more than 45 per cent.
Now it has emerged that the termi-
nated agreement cost taxpayers
€253.3 million (£214 million) in non-re-
fundable payments that the government
had already made. In results for 2021,
Valneva revealed that revenues had risen
by 216 per cent to €348.1 million, which
included that €253.3 million relating to
the terminated UK Covid vaccine deal.
The expense comes after the govern-
ment was condemned after admitting
that £10 billion of spending on PPE had
been written off. Hundreds of millions
were wasted on unusable equipment
that had passed its expiry date, while
taxpayers paid extra in the scramble
for masks and gowns at the start of
the pandemic. It has also been criti-
cised for failing to stem fraud in Covid
loan schemes.
Wes Streeting, the shadow
health secretary, said the Val-
neva expense was “yet another
example of wasteful and care-
less spending” by the govern-Valneva’s jab is based on traditional
technologyCaring has lost his appetite for
Corbin & King’s top restaurants
The Mayfair tycoon Richard
Caring has withdrawn from
the battle for control of The
Wolseley as the restaurant
group behind it is fought over
by its owners.
Caring, 73, had been in
talks about a possible
acquisition of Corbin & King,
which fell into administration
last month. Its collapse was
sparked by a row between its
management, led by co-
founder Jeremy King, and its
majority shareholder, the
Thai hotel giant Minor
International.
But this weekend Caring,
owner of The Ivy, said that “at
this moment, I am not
intending to pursue” the deal.Caring had been due to meet
the Thai investor last week.
The statement will be a
relief for King, 67, who wants
to buy back his company with
finance from US investment
fund Knighthead Capital,
which has offered to repay
£38 million of debt. Both sides
argued in the High Court over
a disagreement about theadministration on Friday.
Minor, which has
appointed the restructuring
firm FRP Advisory, is said to
have received between 35 and
40 expressions of interest in
the company. Corbin & King
has appointed advisers from
Teneo’s restructuring arm.
Corbin & King owns eight
eateries including Piccadilly
haunt The Wolseley, which
counts the former Bank of
England governor Mark
Carney among its customers.
It employs 750 people and
lost £10.3 million on sales of
£22 million in 2020. In a video
to customers last month, King
said the company was “under
siege” from its investor.
Jeremy Clarkson, page 27Sabah MeddingsCity workers lead the
rush back to the office
Workers in England are
returning to their offices in
droves after Boris Johnson
ended his pre-Christmas
guidance to work from home.
Data from Transport for
London showed a 45 per cent
rise in the use of Tube
stations in the financial
district in the middle of last
week compared with two
weeks ago, when the
guidance was lifted.
Springboard, which
measures footfall in retail
areas, found a near 19 per
cent rise in the number of
people in central London, its
measure of office workers,
compared with a week
earlier. Footfall was alsohigher in regional cities,
rising 5 per cent.
Paul Swinney, director of
research at the Centre for
Cities think tank, said he
expected workers to return to
their offices more quickly
than last August, when
restrictions eased in England.
“My expectation is that this
time round people mentally
are much more prepared to
go back, as they have done it
once already,”said Swinney.
Even though footfall is
higher, workers are not
returning to the office five
days a week, and numbers
remain below the levels in
March 2020 when the first
lockdown was announced.
The buzz is back, p6BP dragged into Ukraine row
over $3bn profit from Rosneft
BP has been accused of
cashing in on Russian politics
as it prepares to report a
$3 billion profit from its stake
in the Kremlin-controlled
Rosneft as fears mount of an
invasion of Ukraine.
The British FTSE 100 oil
supermajor, run by Bernard
Looney, is poised to unveil
bumper fourth-quarter
profits when it presents to the
City on Tuesday.
Analysts predict BP will
report profits of $7 billion for
the fourth quarter of 2021,
including nearly $1 billion
from Rosneft, 40 per cent of
which is owned by the
Russian state. Total profits for
last year will be about$17.1 billion, of which nearly
$3 billion will come from
Rosneft.
UK households are bracing
for a sharp rise in energy
prices when the price cap is
lifted to nearly £2,000 in
April. This follows a surge in
natural gas prices in the past
year, which has triggered
accusations that President
Putin has been limiting
supply of gas to Europe for
political gain. Moscow is
seeking approval for the Nord
Stream 2 pipeline, which
critics fear will give Putin too
much control over Europe’s
gas supplies. Analysts predict
an invasion of Ukraine would
drive gas prices up further.
Sam Armstrong at the
Henry Jackson Society said:“For a British firm to profit off
Russia’s exploitative gas-price
raising at the same time as
British consumers are facing
record breaking price rises
would be plainly immoral.”
BP’s near-20 per cent stake
in Rosneft is what remains of
the company’s foray into
Russia with its TNK-BP joint
venture with oligarchs, which
was unwound in 2013.
Rosneft, run by Putin’s ally
Igor Sechin, has been subject
to US sanctions since Russia’s
annexation of Crimea in 2014
but has so far avoided
sanctions from the UK. Last
week Liz Truss, the foreign
secretary, threatened to
ratchet up sanctions, but
declined to comment on
potential targets.Jill Treanor Jamie NimmoRichard Caring: off the menuThe Fenwick family are courting buyers
for their £500 million Bond Street
department store after a plan to sell the
entire chain was scuppered by the
pandemic, writes Sam Chambers.
Mark Fenwick, the retailer’s former
chairman, is marketing the Bond Street
store as a redevelopment opportunity.
City sources said the family were close
to selling the business to Thai
conglomerate Central Group a couple of
years ago, only for the deal to collapsewhen the pandemic took hold. Central has
since acquired Selfridges for £4 billion.
Potential buyers are understood to
include Sir Stuart Lipton, the developer
behind Broadgate in the City, and LVMH,
which acquired and refurbished the Paris
department store La Samaritaine.
However, the £500 million asking price
is said to have deterred some buyers. One
source close to the sale process said he
believed the Fenwick family wanted to
continue trading from the location.FENWICK’S PRIME SITE IN THE SHOP WINDOW
Ministers wasted£200m in Covid
vaccines fiasco
ment. “The Tories have already lost bil-
lions of taxpayers’ money to fraud and
waste during the pandemic,” he said.
“The British public are paying the price...
in higher taxes.”
As part of the deal with Valneva, the
UK government agreed to invest in a
manufacturing plant near Livingston — in
exchange for early access to the jab. It is
understood the investment would have
been discounted from the price of the
vaccines, if they were approved.
However, ministers cancelled the
order and accused Valneva of breaching
its contract — a claim the company stren-
uously denied.
Soon after, Sajid Javid, the health sec-
retary, said in the House of Commons
that the jab would not win approval from
the UK’s Medicines and Healthcare prod-
ucts Regulatory Agency (MHRA). Javid
had been in post for less than three
months at the time and later corrected
his statement in Hansard. Valneva is opti-Government scrapped order for jabs from French drugs giant
Valneva, but paid a non-refundable €253m of taxpayers’ moneySabah Meddings mistic of approval by the MHRA in the
coming weeks.
After the deal was scrapped, Valneva
paused plans to ramp up its workforce to
begin manufacturing, and said jobs were
under threat. It later entered discussions
with Scottish ministers for more funding
to secure the jobs and the plant.
Clive Dix, former chairman of the gov-
ernment’s Vaccine Taskforce, which was
formed to select Covid jabs on behalf of
the government, said he remained “dis-
appointed” the UK did not “fulfil all the
obligations we had with Valneva and help
them get a good vaccine to the world”.
The Valneva jab uses an inactivated
Covid virus, deploying similar technol-
ogy to traditional vaccines used for
measles and yellow fever. In Germany, a
poll found that vaccine willingness would
rise if they were based on so-called “clas-
sical methods”.
Since the UK government cancelled its
order, Valneva has won contracts with
the European Commission. It is pushing
on with its application for approval by the
MHRA and the body’s European equiva-
lent, the EMA, after reporting positive
phase-three trials in October. A decision
is expected in weeks.
David Lawrence, former chief finance
officer at Valneva, said the government
had co-invested alongside Valneva in
developing the product and building a
new plant in Livingston. “UK plc didn’t
leak money in the same way it did for
PPE,” said Lawrence. “But they
haven’t got any vaccines for their
investment.”
The Department of Health and
Social Care did not respond to
requests for comment.ALAMYThe landmark Bond Street store comes with a suitably extravagant £500 million price tagPrivate
equity on
the prowl
at THG
Private equity firms Advent
International and Leonard
Green are exploring a buyout
of the beleaguered online
retailer The Hut Group.
Executives from Advent
are said to have recently
visited THG’s offices in
Manchester, and Los Angeles-
based Leonard Green is also
understood to be running the
rule over the company.
Shares in THG, led by co-
founder Matt Moulding,
jumped 16 per cent on Friday
after news of the private
equity interest surfaced in a
speculative blog post on the
Betaville website. Sources
close to THG said Apollo,
another firm linked with a
deal, was a less likely buyer.
Apollo is already one of THG’s
debtholders, sources said.
THG’s shares have
slumped 82 per cent over the
past year amid growing
concerns over its corporate
governance, cashflows and
the value of Ingenuity, the
tech platform licensed by
THG to other online retailers.
In an interview with GQ
magazine last November,
Moulding said his experience
on the public markets had
“just sucked from start to
finish”. The chief executive
added that he had “other
options” because more than
half of THG’s shares were
owned by himself and his
early backers.
A source close to Moulding
said private equity firms had
approached THG, rather than
the other way around.
City sources said if private
equity were to buy THG, they
may seek to re-list it in the US,
where investors are readier to
tolerate minimal profits from
fast-growing businesses.Sam Chambers