Sunday newspaper round-up: Ladrokes, Tesco, Diageo
Live by the sword, die by the sword. In anticipation of a Labour victory at the next general election, hedge funds appear to have ramped up their bets against Ladbrokes.
Beverages
21,993.12
14:04 25/04/24
Diageo
2,758.50p
14:10 25/04/24
Food & Drug Retailers
3,901.55
14:09 25/04/24
FTSE 100
8,057.46
14:10 25/04/24
FTSE 250
19,632.98
14:10 25/04/24
FTSE 350
4,425.15
14:10 25/04/24
FTSE All-Share
4,379.29
14:10 25/04/24
Ladbrokes Coral Group
173.50p
16:04 28/03/18
Tesco
289.50p
14:10 25/04/24
Travel & Leisure
7,534.06
14:09 25/04/24
The proportion of the company's shares out of loan - a rough gauge for short-selling - hit 8.9%, its highest level since October 2013, data from Markit revealed. That makes it the seventh most shorted stock on the FTSE 250. Analyst James Letten believes that is because the Labour Party has pledged to crack-down on fixed-odds betting terminals to which Ladbrokes has “massive exposure”, according to the Sunday Telegraph.
Should an Ed Miliband-led government come to power, that could threaten the UK's flexible labour market, which has seen the number of people in work reach 31m. A labour administration would be likely to bring in restrictive labour laws, raising the minimum wage and eliminating zero hours contracts. IOD director general Simon Walker said: "There is a sense that Miliband still feels employment regulations can be tightened without consequence," The Sunday Express reports.
Tesco has rebuffed an unsolicited £4bn bid from US private equity outfit Carlyle for its South Korean assets. The grocery giant serves over 6m customers a week in the Asian country through 400 wholly-owned stores and another 200 franchises. The proposal, the second of its kind, was made after John Allan replaced Sir Richard Broadbent at the helm of the company in March, but it was quickly “kicked it into touch”. Private equity firms are thought to be running the rule over Tesco's other operations in eastern Europe. Sources say at one point Carlyle looked into teaming up with Wilbur Ross to bid for Tesco Bank, The Sunday Times reports.
Diageo is set to sell part of its wine division amid the wider sector consolidation now underway. The unit, which makes brands such as Piat d’Or and Blossom Hill, could fetch over £1bn. That comes as Inbev is widely tipped as a potential suitor for SAB Miller, that FTSE 100-listed firm's own attempt to link up with Heineken and a possible InBev takeover attempt of Diageo itself. Diageo has received several offers for the wine division. Shareholders have been disappointed by the company's recent lacklustre sales performance, The Sunday Times says.
Pharmacy giant Walgreens Boots Alliance may table a $8.5bn offer for US drug supplier Omnicare. The American company, which put up the for sale sign last month, supplies drugs to nursing homes and elderly patients. The process is at an early stage and it is not yet certain that a bid will materialise. CVS Health and Express Scripts are also thought to be interested in making a bid. Should a transaction take place it would mark the latest bold move by Walgreen's chief Stefano Pessina, who has built a pharmacy empire over the last decade, The Sunday Times writes.
Virgin Money continued to take a bigger share of the declining UK mortgage market in the first quarter. The lender boosted lending by 34% in the first three months of the year. Virgin Money ended the three months with a 3.6% share, versus a target of 3% and after the 3.1% share it took in the second half of 2014. Gross mortgage lending rose to £1.6bn in the three months ended in March. The group is also targeting £3bn of credit card balances by the end of 2018. Virgin Money hopes the result of a competition investigation into the banking sector will make its current account business more appealing, The Scotsman reports.
When it reports its latest results this week, HSBC is expected to announce it will set aside several hundred million more dollars to deal with additional penalties for foreign exchange manipulation. That comes as American authorities look to close a settlement with over half a dozen banks for the same charges. A charge for HSBC could see the total for three bank involved top $5bn (£3.3bn). The London-based lender has also come under intense scrutiny over the tax practices at its Swiss private bank, says The Sunday Telegraph.
German insurer Allianz has joined the consortium led by Amber Infrastructure and Dalmore which is bidding to provide private sector support for the Thames Tideway Tunnel, the Sunday Telegraph wrote. The second round of proposals in the tender is expected in May with a final decision expected after the new government is in power. Allianz takes the place of Australian investment group QIC, who decided not to continue with the project. The other consortium who is bidding is made up by the Universities Superannuation Scheme, Borealis, M&G’s Infracapital unit, and Innisfree. Construction is scheduled to begin in 2016, reaching completion in 2023.