Glasenberg takes £343m hit on corruption probe
Glencore’s boss was £343m out of pocket last night after the commodity giant’s shares sank as it was subjected to a US corruption probe.
Glencore revealed yesterday that the US Department of Justice had ordered it to provide ‘documents and other records’ relating to its compliance with corruption and money laundering laws. The government body was focusing on Glencore’s business in Nigeria, the Democratic Republic of Congo and Venezuela.
Chief executive Ivan Glasenberg, who owns an 8.4pc stake and is its second largest shareholder behind Qatar’s state-backed wealth fund, took a hit as its shares sank 8.1pc, or 28.3p, to 321p.
A massive £4bn was wiped off Glencore’s value in total, in what turned out to be the worst day for its shares since March 2016 when two miners died in an incident.
Glencore said it was ‘reviewing the subpoena and will provide further information in due course as appropriate’.
Though Glencore’s fall walloped the FTse 100, Britain’s blue-chip index managed to end the day up 0.60pc, or 45.44 points, at 7593.29 as Donald Trump’s attack on the World Trade Organisation caused investors to flock to heavyweight defensive stocks. British American Tobacco ended the day up 2.4pc, or 90p, at 3910p, Glaxosmithkline up 1.7pc, or 25.8p, at 1543p, Unilever up 1.5pc, or 64p,
at 4225p and Imperial Brands up 1.7pc, or 48.5p, at 2874.5p.
World Cup fever was also nudging investors to take a punt on London-listed gambling companies. Ahead of England’s last 16 match with Colombia last night,
Paddy Power ended the day up 1.9pc, or 155p, at 8220p. 888 Holdings
notched up an impressive 3.3pc, or 8.6p, to close at 272.6p. Ladbrokes Coral owner GVc and
William Hill both ended the day more than 1pc higher, as statistics from payments processor Worldpay showed the boost that gambling companies are getting from England games.
Online betting activity soared by 50pc ahead of England’s opening game against Tunisia compared to the same time the week before, and 7pc before they faced Belgium in a tougher challenge.
Elsewhere in the FTSE 250, shares in household goods manufacturer McBride slumped 4.5pc, or 6p, to 126p.
The business, which makes Oven Pride cleaner as well as a swathe of private label household and personal care products for supermarkets around Europe, warned investors that ‘ weaker than expected sales levels in May and June’ meant it had lowered its profit expectations.
McBride blamed higher distribution and warehousing costs for hitting profits, which it now predicts will be ‘marginally below the lower end of analyst expectations’.
A separate announcement that it would sell its loss-making European personal care liquids business to Royal Sanders Group for £12.5m did little to encourage investors.
But a flurry of acquisitions helped lift other London-listed companies yesterday. Paragon
Banking Group climbed 8.4pc, or 39.6p, to 510p as it bought Titlestone Property Finance for £48m.
Paragon, which specialises in buy-to-let mortgages, swooped on the housebuilding lender to help it break into the niche and address the UK’s housing shortage. It said the deal should lift profits ‘ by a high single- digit percentage’ in the first full year. electronic Data P rocessing (EDP), which provides sales software to retailers and wholesalers, rocketed 26.5pc, or 18p, to 86p as it agreed on a 91p per share takeover. The bid, which values EDP at £11.85m, came from Kerridge Commercial Systems – which itself counts Virgin Mobile and Pimlico Plumbers among its clients.