Daily Mail - 21.08.2019

Daily Mail, Wednesday, August 21, 2019

City Editor: Alex Brummer http://www.thisismoney.co.uk Business Editor: Ruth Sunderland

City Finance

90,000

businesses being given a customs

identification number so they can trade

with the EU if we leave with No Deal

Morrisons at risk

as Brexit sparks

takeover frenzy

Supermarket is

vulnerable after

fall in pound,

warns its own

house broker

by Hannah Uttley

FOREIGN vultures could swoop on

Morrisons after a share price slump

and a fall in the pound left it vulnera-

ble to a takeover, experts warn.

The supermarket chain, led by chief exec-

utive David Potts (pictured), is a leading

candidate to fall to overseas buyers in a

dealmaking frenzy driven by a drop in ster-

ling due to jitters over Brexit.

This week Hong Kong’s richest man Li Ka-

Shing swooped on pub chain

Greene King with a shock £2.7bn

takeover offer and observers

believe a host of other household

names could soon follow suit.

The pound has fallen 2pc

against the US dollar to below

$1.22 since Boris Johnson

became Prime Minister, as trad-

ers bet on economic turmoil

because a No Deal Brexit looks

increasingly likely.

Morrisons’ house broker Shore

Capital said that a share price fall

of more than 30pc over the past

year, combined with Morrisons’

strong freehold property portfo-

lio and relatively low debt pile,

make it an attractive target.

Any deal could be followed by

takeovers of companies such as

ITV, Premier Inn owner Whit-

bread and pub chains such as

Mitchells and Butlers.

Clive Black, head of research at

Shore, said: ‘Morrisons is 85pc

freehold and is Britain’s largest

food manufacturer. A takeover is

something absolutely to be

thought about in the present

market conditions.

‘It’s pretty clear that a whole

raft of London investment banks

are trawling the world, saying “do

you want to buy this in Britain?”’

Morrisons declined to comment.

A raft of firms have already been

snapped up in a spree sparked by

the 2016 EU referendum. Japan’s

Softbank made a £24bn grab for

British microchip maker Arm

Holdings and firms including

Cathedral City maker Dairy

Crest, Alton Towers owner Mer-

lin Entertainment and Telford

Homes have fallen into foreign

hands. Takeovers have also been

spurred by activist investors tak-

ing stakes in struggling firms.

Hedge funds have been pushing

for change at companies span-

ning Saga to Whitbread, making

buyouts more likely. Meanwhile,

Virgin Media’s US owner Liberty

Global’s growing stake in ITV has

sparked speculation that it could

fall under American control.

And Nigel Parson, analyst at

Canaccord Genuity, said pub

chain Mitchells and Butlers’ con-

centrated share ownership means

a buyer ‘would only need to make

a few calls’ to gauge interest. Joe

Lewis, who made an unsuccessful

bid for it in 2011, owns 27pc. Irish

racing magnates, John Magnier

and JP McManus, hold 23pc.

Aldi and

Lidl push

Big Four to

15-year low

BRITAIN’S Big Four supermarkets’

share of the grocery sector has

fallen to a 15-year low as they bat-

tle an onslaught from German dis-

counters and online rivals.

Sales at Tesco, Sainsbury’s, Asda

and Morrisons were all lower in the

12 weeks to August 11 than they had

been a year earlier – partly because

of a bonanza in 2018 driven by a

heatwave, royal wedding and the

football World Cup.

Morrisons posted the largest fall

of 2.7pc, figures from the data

analyst Kantar revealed, with Tesco

and Asda declining by 1.6pc and

1.5pc respectively.

Sainsbury’s was the strongest

performer among the Big Four for

the first time since November 2017,

but still posted a 0.6pc fall in sales.

The four retailers now have a

combined market share of 67.4pc,

their lowest since November 2004.

Fraser McKevitt, head of retail

and consumer insight at Kantar,

said: ‘The memory of last year still

looms large for retailers.

‘This summer’s comparatively

poor weather, combined with low

levels of price rises, have made

growth hard to find.’

Traditional supermarkets are

fighting fierce competition posed

by the budget German rivals Lidl

and Aldi.

Lidl attracted an additional

489,000 shoppers during the period,

notching up a 7.7pc jump in sales.

Aldi posted a 6.2pc increase.

The two now have a joint 14pc

share of the market.

McKevitt added: ‘Nearly half of all

households shopped in an Aldi

store during the past 12 weeks,

showing the extent to which the

discounter has established itself in

our retail landscape.’

Online-only supermarket Ocado

enjoyed the largest growth over

the 12 weeks, with sales up 12.6pc as

customers spent an average of

£1.93 more on each delivery. How-

ever, its overall share is just 1.4pc.

Across the rest of the sector, Co-

op saw a 0.2pc sales rise, while

Waitrose and Iceland posted falls of

1.8pc and 0.4pc respectively.

by Hannah Uttley

Failed bid cost NSF £13m Minister’s Cobham pledge

DOORSTEP lender Non-Standard Finance
spent almost £13m on its doomed bid to
buy rival Provident Financial.
It blew £12.7m on its pursuit of the Provvy
before failing to win overwhelming share-
holder support.
NSF sought to pull investors back on-side
with an increased dividend as it revealed
the costs, which included fees for city
spinners and investment banks.
It increased its half-year payout by 17pc
to 0.7p per share, even though losses wid-
ened from £2.5m to £22.8m. Shares in NSF

have worse than halved since its doomed

£1.3bn raid on the Provvy fell through this

year, adding insult to injury for humiliated

boss John van Kuffeler.

The company abandoned its bid after

Provvy’s board and shareholders kicked

up a fuss, claiming the bid undervalued

the company and its prospects.

NSF’s diminished value leaves it vulnera-

ble to a foreign takeover. But it says it is

‘cautiously optimistic’ for 2019. Van Kuf-

feler said: ‘Each of our businesses contin-

ued to perform well during the first half.’

DEFENCE secretary Ben Wallace has prom-

ised the founding family of engineering firm

Cobham that he will look into their con-

cerns over its £4bn takeover.

Cobham, which dates back to 1934 and is

a significant supplier to the British military,

is set to be snapped up by US private equity

giant Advent International in a deal which

would see another defence stalwart disap-

pear from the stock market.

The Cobham family, led by Lady Nadine

Cobham, called for the Government to

intervene, saying it was not in ‘the UK’s

national interests’. Wallace, replying to a

letter from Lady Cobham said he would

consider the impact on ‘the security and

skills’ needed to protect the UK.

The daughter-in-law of company founder

Sir Alan Cobham, replied: ‘We are encour-

aged the defence secretary understands our

concerns about the proposed takeover,

which threatens UK national security, valu-

able high-tech jobs and this country’s man-

ufacturing capability.

‘The Government must block the takeo-

ver to prevent Advent from exploiting Cob-

ham’s years of investment, the weak pound

and recent stabilisation of its finances.’

£10m FOR GREENE KING BOSS

THE former boss of Greene

King is set to pocket £10m from

its takeover by Hong Kong’s

richest man, Li Ka-Shing.

Rooney Anand, who stepped

down this year, owns 1.1m

shares in the pub chain, putting

him in line for the windfall.

Around half the shares are

tied up in long-term incentive

plans but are likely to be

released once the £2.7bn deal

goes through.

Anand, 55, spent 14 years

running the Suffolk-based

brewer, almost three times

the average term of a British

chief executive.

He was paid £1.6m during his

final year at the firm.

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