Sunday newspaper round-up: Vodafone, National Grid, bank legal claims
Several of Vodafone's major shareholders have urged the telecoms giant to pursue a merger with US-based Virgin Media owner Liberty Global and offload some of its overseas businesses. After Liberty's owner, US billionaire John Malone, dropped heavy hints about a potential deal, the Sunday Telegraph reported that some of the UK's largest investment groups would support a plan by FTSE 100 telecoms giant Vodafone to sell off networks in countries such as India, Turkey and South Africa in order to focus on a merger of its European arm. The paper said two major shareholders in the UK company confirmed they were backing the plan, with several more understood to be debating the idea, “putting the board under growing pressure to respond”.
UK electricity network owner National Grid is planning the sale of its electricity meter business for £1bn, the Sunday Times said. Is it understood that FTSE 100 former state company is exploring options for offloading the unit, which provides roughly 17m gas meters in homes and businesses, in order to generate cash for a major investment drive.
After regulators fined several banks, including Barclays and Royal Bank of Scotland, $5.6bn for rigging forex markets, legal experts have warned this may act as a springboard for many more new class-action legal claims on the same companies. The Sunday Telegraph has resuscitated a similar earlier story from but now has reported opinions from some lawyers that settlements in the UK and Europe could ultimately exceed the regulators' penalties. Some cases having already been settled in the US, where such cases are easier to arrange, but law firm Hausfeld, which has been involved in several class action cases in the US, has begun to drum up support from institutions, with court cases expected in Europe before long.
Anglo American will spin-off part of its platinum operations with a flotation in Johannesburg, disappointing investors who had been hoping for the cash windfall from a disposal. The FTSE 100 business has decided against an outright sale, according to a source cited by the Sunday Times, as offers from suitors were less than chief executive Mark Cutifani was prepared to accept. Anglo needs to raise cash in order to avoid being downgraded to junk status by credit agencies.
Plans for the flotation of Worldpay have been accelerated from recent plans for a 2016 IPO and the payment processing business, which was spun out of RBS, could list in London with a £6bn valuation by the end of the summer. Buoyed by increasing market confidence, Worldpay and its advisers have agreed to speed up the listing process, the Sunday Times reported. Goldman Sachs and Lazard have begun the initial process and are expected to be joined by further investment banks as part of the bookbuilding process. If the company does not quite manage to float by its current September target, it is likely to list by the end of the year at the latest, banking sources whispered.
Aston Martin, the carmaker turned into a global super-brand by the James Bond films, is revving up for its own London stock market flotation, according to the Sunday Times. One of Aston Martin's owners, Kuwait’s Investment Dar is being forced to restructure its debts due to overextending itself a decade ago. However, the newspaper noted that industry sources dismissed the likelihood of a float soon as the company only 3,662 cars last year, is perennially loss-making and had debts only slightly shy of its £468m revenues.
The Big Six energy suppliers, such as British Gas and SSE, seem to be losing material levels of customers to smaller rivals, the Sunday Times suggested, after challenger supplier First Utility revealed customer numbers had more than doubled to 800,000 in a year. First Utility, which was founded in 2008, has benefited from increasing public disapproval of the Big Six energy suppliers' stranglehold on the market, the paper noted. Last week SSE blamed the loss of 500,000 customers on the rise of small challengers.
The chief executive of Airbus has warned of the dangers to the aerospace industry of the campaign by Air France-KLM and Lufthansa, backed by the German and French transport ministers, to restrict access to their fast-growing Gulf rivals by tearing up free movement treaties. The Sunday Times reported that Airbus chief Tom Enders recently visited European commissioners in Brussels to warn against bowing to the demands of European carriers, who have objected to state subsidiaries for Middle East competitors. Emirates is by far the biggest customer for Airbus’s huge A380 double-decker jet, with 140 ordered.
A highly respected property guru has predicted a 15-year super-cycle for UK property, reported the Sunday Times. Mike Hussey, former executive director at Land Securities and current Taylor Wimpey non-executive director, said the sector is only a small way through “a boom in property that I think will exist for at least 15 years — by which I mean 2010 to 2025. And in London, I think we won’t see a cyclical downturn for a generation.” Hussey said the current mix of tight property supply, caused by glacially slow planning processes and soaring construction costs, as well as plentiful demand would continue to force both commercial and residential property prices higher and higher for the foreseeable future.
A handful of UK retail businesses owned by Legal & General's private equity arm, including Cycle Surgery, Runners Need and Snow & Rock, are due to be sold off to private equity buyers as the insurance group winds up the division. The Sunday Telegraph reported that Legal & General has hired advisor Campbell Lutyens to sell off LGV Capital's entire portfolio of assets.
Barclays has lost its highly respected and long-serving head of corporate broking, Alisdair Gayne, the Sunday Times reported, after he was poached by UBS. Gayne, who joined Barclays in 2010, quit the bank on Friday and is expected to be named chairman of UBS’s UK investment bank shortly. The paper noted that corporate broking is unique to Britain, with banks acting as unpaid advisers to companies in the hope of taking a fee for potential fundraisings or dealmaking.
Before the current bosses took over, it has emerged that Barclays paid one trader at its investment bank £170m in the five years after the 2008 financial crisis - more than the group's chief executive at the time, the Sunday Times said. Trader Jonathan Hoffman, a specialist in US government debt, was given a £53m signing-on fee to tie him in after his employer Lehman Brothers collapsed in 2008 and then earned £118m from 2009 to 2013, more than Barclays' then-CEO Bob Diamond.
A Japanese company has agreed to buy Mira, the company that owns and operates several UK automotive tests tracks, including the one made famous by Jeremy Clarkson and chums on the BBC's Top Gear programme. Horiba, a Tokyo-listed testing company, is believed to have won the race to buy Mira with its £85m bid, the Sunday Times revealed.
Network Rail lavished £60m in bonuses on its staff last year despite failing to meet many targets on punctuality and the late running of several key upgrade projects, the Sunday Times wrote. Payouts of 50% of salary were given for many staff in spite of the organisation's inconsistent performance.