Maitland/AMO Morning Monitor – Monday 24 September 2018

24th September 2018

What really matters... COVID-19

The FTSE is expected to open lower this morning whilst the French CAC opened up and the German DAX opened down.

Markets around the globe continue to focus on what the future holds for U.S. China relations, as the two major nations fail to meet eye to eye over trade.

Stock market moves

In other news

  • Majority of Cabinet now favour a Canada-style Brexit deal
  • Labour aims to make large firms turn 10% of equity over to staff
  • Private Equity firm Apollo criticized over fees charged to life insurer

Corporate announcements

* Maitland Client

Sky PLC Accept the Recommended Comcast Offer Immediately
  • Independent Committee unanimously recommends that Sky shareholders accept the Comcast Offer, and in order to ensure the successful closing of the Comcast Offer, and given the possibility of a delisting of Sky in the near future, urges shareholders to accept immediately.
  • The Comcast Offer price of £17.28 represents a premium of 125% to the closing price of £7.69 on 6 December 2016, the last business day before 21CF’s initial approach.
  • The offer represents a multiple of 15.5 times Sky Adjusted EBITDA of £2,349m for the twelve month period ended 30 June 2018.
  • Martin Gilbert, Chairman of the Independent Committee of Sky, said: “We consider the Comcast Offer to be an excellent outcome for Sky shareholders, and we are recommending it as it represents materially superior value. We are focused on drawing this process to a successful and swift close and therefore urge shareholders to accept the recommended Comcast Offer.”
Randgold Resources Recommended Merger of Barrick and Randgold
  • The Boards of Barrick Gold Corporation and Randgold Resources Limited have announced that they have reached agreement on the terms of a recommended share-for-share merger of Barrick and Randgold to create a gold company.
  • Under the terms of the Merger, each Randgold Shareholder will receive 6.1280 new Barrick shares for each Randgold share.
  • Following completion of the Merger, Barrick Shareholders will own approximately 66.6% and Randgold Shareholders will own approximately 33.4% of the New Barrick Group on a fully-diluted basis.
  • John L. Thornton, Executive Chairman of Barrick, said: “The combination of Barrick and Randgold will create a new champion for value creation in the gold mining industry, bringing together the world’s largest collection of Tier One Gold Assets, with a proven management team that has consistently delivered among the best shareholder returns in the gold sector over the past decade.”
  • Mark Bristow, Chief Executive Officer of Randgold, said: “Our industry has been criticised for its short-term focus, undisciplined growth and poor returns on invested capital. The merged company will be very different. Its goal will be to deliver sector leading returns, and in order to achieve this, we will need to take a very critical view of our asset base and how we run our business, and be prepared to make tough decisions.”
Pennon Group PLC Trading Statement
  • On track to meet management expectations for 2018/19.
  • No water restrictions for the 22nd consecutive year, despite high demand and dry weather.
  • £430m of financing raised, of which £240m under Pennon’s sustainable financing framework.
  • Since 31 March 2018, Pennon has secured £430m of financing, £240m of which has been through the use of its sustainable financing framework, with £110m through the European Investment Bank with an inaugural Pennon facility.
Drax Group PLC Possible acquisition
  • Further to recent press speculation Drax confirms that it is in discussions with Iberdrola regarding a potential acquisition of a UK portfolio of pumped storage, renewable hydro and gas-fired generation assets.
  • The discussions are preliminary in nature and there can be no certainty of any agreement or the timing or terms of any such agreement.
  • Any potential acquisition would be fully debt funded and subject to shareholder approval.
Thomas Cook Group PLC Pre-Close Trading Update
  • Full year underlying EBIT now expected to be around £280 million, based on recent trading.
  • Challenging period of ‘lates’ trading following unprecedented months of hot weather.
  • Peter Fankhauser, CEO, said: “Summer 2018 has seen a return to popularity of destinations such as Turkey and Tunisia. However, it has also been marked by a prolonged period of hot weather across Europe. This meant many customers spent June and July enjoying the sunshine at home and put off booking their holidays abroad, leading to even tougher competition and higher than usual levels of discounting in the ‘lates’ market of August and September.”
Thomas Cook Group PLC Succession plan for Chief Financial Officer
  • The Company has announced that Group Chief Financial Officer Bill Scott has decided to step down. Bill will leave the company and the Board on 30 November 2018 following the full-year results announcement.
  • The Board has named Sten Daugaard as Group Chief Financial Officer on an interim basis. He will join the company on 1 October 2018 and Bill will lead a detailed handover before Sten is formally appointed to his role on 1 December 2018.
  • Frank Meysman, Chairman, said: “I would like to thank Bill for the contribution he has made over the last six years at Thomas Cook. I am pleased that we have secured someone of Sten’s considerable experience to assume this important role while we find a long-term successor to Bill. I look forward to working with Sten as he supports us through the next phase of the Group’s development.”
Great Portland Estates PLC Appointment of Chairman
  • The Company has announced the appointment of Richard Mully as Non-Executive Chairman with effect from 1 February 2019.
  • Richard Mully will succeed Martin Scicluna who will retire from the Board on 31 January 2019.
  • Martin Scicluna said: “I am delighted that Richard has been selected to succeed me as Chairman and I wish him and the Company every success. It has been a privilege to serve on GPE’s Board for the past ten years and I have thoroughly enjoyed working with Toby Courtauld and the GPE team. The Company is in great shape with its robust financial position enabling management to continue to capitalise on both internal and market opportunities”.
  • Richard Mully said: “With management’s strong track record, the quality of the portfolio and potential of the development pipeline, I look forward to working with the GPE team. On behalf of the Board, I would like to thank Martin for his valued contribution and stewardship over the past ten years. His wise counsel and collegiate approach both in and outside the Board room will be missed.”
Brockmans* Brockman Toasts Record Results
  • Total revenue up 35% to £4.73m (2017: £3.5m).
  • UK revenue up 90%, Germany revenue up 35% and USA revenue up 32%.
  • Neil Everitt, Brockmans’ joint founder and CEO, said: “The UK is our fastest growing market and it’s going great guns. Our move into the supermarkets has helped new drinkers discover the brand as well as making Brockmans easier to find for existing fans. It means more and more customers can choose either to enjoy a Brockmans when out with friends at their favourite cocktail bar or restaurant or pick up a bottle on their way home and take the party there instead. Starting with bars and restaurants before widening our presence to retailers is a model that’s working for us in the UK and so we’re repeating the formula in several other markets.”