The Sunday Times - UK (2022-04-03)

The Czech billionaire who

won the battle to take over

the National Lottery is in line

for a $750 million

(£572 million) jackpot when

he lists his company in New

York in a $9.3 billion deal.

Karel Komarek stands to

earn the lion’s share of the

cash windfall when he

launches Allwyn

Entertainment on the public

markets through a deal with a

special purpose acquisition

company (Spac).

As the majority owner of

Allwyn’s parent company,

KKCG, Komarek will be the

main beneficiary of a

$750 million cash payout as

part of the deal, with US

private equity firm Apollo a

minority shareholder.

His stake in the business is

expected to be worth close to

$6.6 billion.

Komarek, 53, emerged

victorious last month when

his company was awarded

the contract to run the

National Lottery from 2024.

Allwyn, previously known as

Sazka, runs lotteries in

Austria, Italy and Greece. It

proposes to cut the cost of

tickets from £2 to £1.

Last week Camelot, which

has run the lottery since 1994,

launched a legal challenge to

the decision by Britain’s

Gambling Commission.

Camelot, owned by Ontario

Teachers’ Pension Plan, is

being represented by leading

QCs Lord Pannick and Jason

Coppel in its legal fight.

The National Lottery has

the potential to provide

hundreds of millions in

dividends over the course of

the ten-year licence. Since its

launch, it has created 6,300

millionaires and handed out

£56 billion in prize money.

Komarek made much of his

fortune from investments in

oil and gas after the 1989

Velvet Revolution. Last

month he began steps to cut

links to the Russian gas giant

Gazprom in the wake of the

war in Ukraine. KKCG also

runs a gas storage venture

with Gazprom in the Czech

Republic. Last month

Komarek condemned

Russia’s invasion of Ukraine,

and said he was in talks with

the Czech government about

removing Gazprom from the

venture.

Allwyn said its Spac

valuation was based on

Sabah Meddings

Premier Inn’s FTSE 100 owner is prepar-

ing for its chief executive to step down

after seven years, with the finance

director of advertising giant WPP among

early contenders to replace her.

Whitbread has begun working with

headhunters at Spencer Stuart on succes-

sion planning for Alison Brittain, The

Sunday Times can reveal. Brittain, 57, has

reshaped the leisure group since joining

in 2015, selling the Costa Coffee chain for

a knockout price to Coca-Cola and taking

Premier Inn into Germany. She has

steered Whitbread through Covid lock-

downs that saw its hotels and bars forced

to close for swathes of 2020 and 2021,

and in January was able to report that

sales in the quarter to November 25 were

5.5 per cent ahead of 2019 levels.

The search for a new chief executive

follows the appointment of former Asda

and Greene King executive Hemant Patel

as Whitbread’s finance director, after

predecessor Nicholas Cadbury left for

British Airways owner IAG. It is under-

stood that Brittain plans to retire from

executive life and build a portfolio of non-

executive jobs, meaning she is in no rush

to leave. She is likely to stay until next

year — long enough to help Patel, 52, set-

tle into the finance director role and to

oversee further expansion in Germany.

John Rogers, finance director of WPP,

whose agencies include GroupM and

Ogilvy, is understood to be among early

candidates interested in succeeding Brit-

tain. Rogers, 53, has long been seen as a

future chief executive; he joined WPP in

2020 from Sainsbury’s, where he helped

oversee the takeover of catalogue retailer

Argos, which he then ran for three years.

Alongside his role at WPP, Rogers sits

on the board of Grab, the Singaporean

ride-hailing app whose shares have

crashed since it went public in the US via

a special purpose acquisition company

last year. Rogers was paid a total of

£4.8 million by WPP last year — more than

its chief executive, Mark Read.

Whitbread employs 30,000 staff and

has 870 hotels in Britain, Germany and

the Middle East. Its main brand is Pre-

mier Inn. It also owns 400 Beefeater,

Brewers Fayre and Table Table pub res-

taurants. Its shares have fallen by about a

quarter under Brittain’s tenure, while the

FTSE 100 has risen by the same degree.

The company traces its roots back to

1742, when Samuel Whitbread opened a

brewery with the brothers Godfrey and

Thomas Shewell. It grew into one of the

biggest leisure conglomerates in Britain,

at one point owning David Lloyd Leisure,

Marriott Hotels, TGI Fridays and Pizza

Monzo backer’s co-founder on sex charges

A venture capital fund led by

a former adviser to Boris

Johnson has been forced to

remove one of its founding

investors after he was

charged with sexual assault.

Passion Capital, which is

led by Eileen Burbidge,

Johnson’s digital adviser

when he was mayor of

London, said it had learnt of

criminal charges against

Stefan Glaenzer.

Passion is understood to

have temporarily suspended

two of its funds as a result. Its

investments include the

banking app Monzo.

The Metropolitan Police

said Glaenzer, 60, had been

arrested in September 2021

following an allegation made

in June that year. He is due to

appear at Westminster

magistrates’ court on April 7.

Passion said it condemned

“any forms of assault or

harassment in any situation”,

and would consider its legal

position in holding Glaenzer

to account should the

allegations be substantiated.

Passion Capital, backed by

the taxpayer-owned British

Business Bank, which

invested £17.5 million in 2015,

said it had removed Glaenzer

from membership of its

companies, and that it was

seeking to “exercise any

rights” that would restrict

him from benefiting from

successes in its portfolio.

“Whilst we are not privy to

specific facts around the

charges as Mr Glaenzer is not

commenting on the events,

we have moved to sever any

and all trailing contractual

commitments that remained

between him and our historic

funds and activities,” it said.

Glaenzer founded Passion

in 2011 along with Burbidge,

50, and Robert Dighero, 55.

Glaenzer made his millions in

companies including music

streaming site Last.fm and

Ricardo.de, a European

online auction site.

He stepped down from

Passion Capital in 2018, but

remained involved as an

investor and limited partner.

Glaenzer did not respond

to a request for comment.

Sabah Meddings

Hut. Whitbread sold its brewing business

in 1999, followed by a string of brands in

the 2000s, leaving it based around Costa

Coffee and Premier Inn.

Brittain, who grew up in Derbyshire,

joined in 2015 from Lloyds Bank, where

she was director of retail banking. Three

years after she replaced Andy Harrison as

chief executive, the aggressive American

hedge fund Elliott Management claimed

to have built a stake of more than 6 per

Alison Brittain is

to step down

after seven years

in charge of the

former brewer

Boots owner offers to help £7bn suitors

The American owner of Boots

has offered to retain a stake of

up to 30 per cent in the

pharmacy chain to smooth

the path towards a £7 billion

sale, amid concerns war in

Ukraine will hamper buyers’

ability to raise debt financing.

Walgreens is said to be

willing to keep between 15

and 30 per cent of Boots,

which would pave the way for

Ornella Barra, boss of its

international businesses, to

take a seat on the board

under the new ownership.

Barra, who is the partner

of Walgreens executive

chairman Stefano Pessina, led

presentations to suitors

including Asda’s owners TDR

Capital and the Issa brothers,

as well as US private equity

firms Apollo and Sycamore.

Walgreens plans to pick a

preferred bidder by Easter

and strike a deal in early May.

Even as it closes in on a

sale, Walgreens is raising just

over £80 million with a sale

and leaseback of a Boots

distribution centre in Burton-

on-Trent processing online

orders. It is under offer. A

source close to Walgreens

said the sale process for the

site began after an unsolicited

approach. Walgreens has

extracted more than £1 billion

in dividends since acquiring

Boots in 2014.

Boots reported a 22 per

cent increase in like-for-like

sales in the three months to

February on the back of

stronger online sales,

reversing a 17.8 per cent drop

in the same period last year.

Sam Chambers and

Sabah Meddings

Barra: possible board seat

Oliver Shah

Whitbread fires starting

gun in race for new boss

Camelot successor set for $750m float jackpot

revenues from its “current”

lotteries across Europe, not

including future revenues

from the UK. The transaction

is expected to close in the

second quarter of this year.

Allwyn’s bid was led by Sir

Keith Mills, chief executive of

the London 2012 Olympics,

and Justin King, the former

boss of Sainsbury’s.

Lord (Seb) Coe, president

of World Athletics, is

expected to serve on Allwyn’s

board.

Carnival sails into

row over bonus

Carnival, the owner of P&O

Cruises, Cunard and Princess,

is on course for a blazing row

with shareholders after the

company ripped up its rules

on pay to award its chief

executive a $15 million

(£11.4 million) package.

The cruise operator, which

was forced to suspend

operations for months during

the pandemic, has awarded a

$6 million bonus to Arnold

Donald even though the usual

performance criteria were

not met. Donald, 67, was also

awarded shares with a value

of $7.5 million that vest over

three years and do not appear

to have any performance

conditions attached. In total

he received $15 million,

including $20,399 for

personal use of an aircraft.

Proxy advisory agency ISS

has advised shareholders to

vote against the pay awards at

the annual meeting this

Friday. Rival agency Glass

Lewis has also urged

investors to vote down the

awards. Their advice is likely

to lead to sizeable protest

votes by institutional

investors. The UK-based

Investment Association,

which has 270 members

managing more than

£9.4 trillion of assets around

the world, has issued a “red

top” notice on the pay deals —

its highest warning.

Legal & General

Investment Management is

set to vote against the pay

deal too. It said the payments

were being made “despite the

company making use of

furlough, not paying

dividends and having made

employees redundant”.

LGIM also intends to vote

on a number of board

directors it does not regard as

sufficiently independent.

Carnival, listed in New York

and London, did not respond

to requests for comment.

The FTSE 250 company is

one of the first big firms to

hold its annual meeting this

year — and the anger about its

pay policies could set the

tone for the remainder of

the season.

Major investors are in the

throes of setting out their

“red lines” for companies

that could trigger protest

votes at AGMs. While pay is

usually a contentious matter,

this year investors are also

expected to focus on

boardroom diversity and

companies’ progress towards

net-zero targets.

Jill Treanor

Toyota warns jobs at

risk in net-zero dash

Toyota, the world’s largest

carmaker, has warned

transport secretary Grant

Shapps that it may cease

manufacturing in Britain after

30 years unless the

government waters down a

mandate for a rapid switch to

pure electric vehicles (EVs).

The threat to the future of

3,000 jobs at its factory in

Burnaston, Derbyshire, and

its engine plant at Deeside in

north Wales, comes as the

Department for Transport

prepares to impose targets

requiring a rising percentage

of new car and van sales to be

zero-emission models each

year from 2024.

Firms that fail to meet the

threshold under the Zero

Emission Vehicle standard

will have to pay a penalty or

buy credits from rivals such

as Tesla. Neither the quotas

nor the penalties have yet

been made public.

Toyota sold more than

100,000 vehicles in the UK in

2021, when sales were

depressed by Covid-19. If the

penalty was £1,000 per

vehicle and Toyota missed

the quota by 30,000, the

charge would be £30 million.

There will also be targets for

CO 2 levels for petrol and

diesel sales to prevent a firm

Nicholas Hellen

and Gabriel Pogrund

selling gas-guzzlers alongside

compliant electric cars.

Sales of new petrol and

diesel cars will be banned

after 2030, although new

hybrids will still be permitted

until 2035, provided they

meet standards that have not

yet been announced. This

could include a minimum

electric range or plug-in

charging, rather than

Toyota’s self-charging petrol-

electric hybrid approach.

Whitehall sources

confirmed Toyota’s warning

but said ministers felt there

was an element of “sabre-

rattling” in this as Toyota

tried to gain control of the EV

timetable to its advantage.

Toyota has bet heavily on

hybrid technology since the

launch a quarter of a century

ago of the Prius, the first

mass-market petrol-electric

hybrid. It has been making a

new version of the Corolla,

another hybrid, at Burnaston

since 2019.

Last December Akio

Toyoda, the president of the

car giant, announced a

strategic shift: “I wasn’t

interested in Toyota’s EVs

until now. But now I’m

interested in future EVs.”

He said that the firm would

pour billions into electric

vehicles, with 30 models

launched by 2030, and a goal

of 3.5 million sales by then.

cent and demanded a demerger of Costa.

At one point, Elliott even made its own

£2.9 billion bid for the coffee chain. Brit-

tain and chairman Adam Crozier stunned

the City in 2019 when Whitbread

announced it had sold Costa to Coke for

£3.9 billion. Whitbread returned £2.5 bil-

lion to investors via share buybacks.

She was paid a total of £1 million in

2020-21. Whitbread suffered a share-

holder revolt over pay last June for carry-

ing over bonuses accrued during the pan-

demic despite having cut jobs and taken

taxpayer support to furlough staff.

Brittain is one of only nine women run-

ning FTSE 100 companies. In a 2012 inter-

view, she said she was “ambivalent”

about the use of diversity quotas,

although she is an advocate of less formal

targets and has spoken about the need to

promote more women through the exec-

utive ranks. About 40 per cent of Whit-

bread’s senior team are women.

BUSINESS

&MONEY

April 3, 2022 · thesundaytimes.co.uk/business thesundaytimes.co.uk/money

BUSINESS

&MONEY

HUNTER DAVIES:

WHY I DITCHED

MY CAR

MONEY, PAGE 14

THE CITY’S

MR BUMP

DOES IT AGAIN

PAGE 4

END OF

CHEAP

BOOKS?

PAGE 5

BRITTAIN’S BATTLES

BEN GURR FOR THE TIMES

Alison Brittain to step

down from leisure giant,

with WPP finance chief

contender to take over

0 May 2015: Whitbread chairman

Richard Baker hires Alison Brittain

from Lloyds Bank to take over from

Andy Harrison as chief executive.

0 March 2016: Premier Inn opens its

first hotel in Germany, a 210-bed

property in Frankfurt.

0 December 2017: Activist investor

Sachem Head reveals a 3.4 per cent

stake, sending the shares flying.

0 January 2018: Former ITV boss

Adam Crozier named new chairman.

0 April 2018: Pressure increases as

US activist Elliott Management

emerges with a 6 per cent stake.

Whitbread confirms it will spin off

Costa Coffee.

0 August 2018: Coca-Cola

announces it will pay £3.9 billion to

acquire Costa Coffee.

0 May 2020: After Covid shuts down

the economy, Whitbread launches a

£1 billion rights issue to reinforce the

balance sheet and provide firepower

for deals.

0 September 2020: Brittain says she

will cut up to 6,000 jobs, blaming a

slump in hotel guest numbers during

lockdown.

0 March 2021: As recovery beckons,

Whitbread opens hotel bookings for

2022’s Cheltenham festival — and

sells out in 48 hours.