Companies in the news ... and how they were assessed
Standard Life/aberdeen: “Staberdeen”
Scotland’s recent record in the finance industry isn’t much to write home about, said Alex Brummer in the Daily Mail. This week saw a new “bid for glory”. Two tartan titans, Standard Life and Aberdeen Asset Management, have announced a surprise £11bn mega-merger that will create the biggest active investment manager in Britain, and the second-largest in Europe. “The idea of a new Scottish £660bn financial powerhouse to erase bad memories of both Royal Bank of Scotland and Bank of Scotland… should be as welcome as a Burns Night feast.” Even if it’s “a case of two whisky-soaked Scottish drunks holding each other up in stressful times”, it’s still “far better than letting them fall into a ditch”. The bosses behind the move – Aberdeen’s Martin Gilbert and Standard Life’s Keith Skeoch – talk about creating a “powerhouse”, said Christopher Williams in The Daily Telegraph. But “no amount of bluster” can disguise the fact that this is a defensive deal, probably triggered by the companies’ recent share-price falls. At least the fit, in terms of their respective portfolio strengths, looks good. Gilbert and Skeoch plan to run “Staberdeen” as co-ceos – an “unusual approach”, said Patrick Hosking in The Times. The pair know each other well: they are fishing chums in private life. But some analysts reckon the arrangement is nonetheless a recipe for “friction and turf wars”.
Sports Direct/agent Provocateur: dirty knickers?
The high-end lingerie chain Agent Provocateur entered administration last week – and was immediately snapped up by Mike Ashley, owner of the discount retailer Sports Direct, said Josie Cox in The Independent. But the deal is already causing a stink. Founded in 1994 by Vivienne Westwood’s son, Joe Corré, Agent Provocateur quickly grew into a global brand, but of late it has hit trouble. In November, its owner, the private equity group 3i, wrote down the value of its 80% stake by £39m. Ashley’s investment vehicle, Four Holdings, is believed to have paid £31m for the company in a pre-pack administration deal. But his “foray into frilly knickers” has been slammed as a “phenomenal stitch-up” by Corré, said City AM. Corré claims there was “a higher bidder” at the table: Quadro Capital had reportedly offered £35m for the business, and wanted to save both the majority of jobs and “the international presence of the brand”. Ashley, by contrast, will close the international business down; he will keep just a few stores in the UK running. The Agent Provocateur brand has been “dropped like a pair of dirty knickers”, charges Corré, who predicts “a phenomenal swathe of litigation actions”.
Foxtons/g4s: Budget tactics
The ability of the “accident-prone” security group G4S to turn its work into “total farce” has “wowed the Square Mile for years”, said Simon Goodley in The Observer. Who could forget the prisoner who tricked his G4S guards into tagging his (detachable) prosthetic leg, “thereby allowing him to skip his curfew”? So when the firm deployed that “tired” old tactic of “burying” its results on Budget Day, analysts feared the worst. Wrongly, as it turned out, said Reuters: shares hit a 20-month high on Wednesday after G4S posted a 13.9% hike in annual profits. But Foxtons, the London estate agent, which also filed that day, had every reason to hide, said City AM. London’s “cooling market” had cut profits from £41m in 2015 to £18.8m in 2016, and shares duly “took a dive”.