French Connection soars on fresh takeover talk
IF ONLY French Connection could make its clothes as popular as its shares were yesterday.
They soared following talk of a possible bid for the beleaguered business over the weekend.
While the retailer has said it is not in active discussions with any bidders at present, it did admit that, as the company is currently loss-making, its share price looks undervalued and that attracts regular interest from third parties.
Names in the frame on this occasion included US private equity firm Neuberger Berman, which owns clothing brand Ben Sherman, and UK-based Rutland Partners, which recently sold turkey brand Bernard Matthews. Talk over the weekend suggested that activist investors were pushing for change at the trouble retailer.
But sources were keen to point out that Stephen Marks, founder of the firm, still owns 41.6pc of the business so any deal would need his approval to get the green light. Shares opened some 19pc higher than where they finished on Friday night, but eased off throughout the day.
They finished up 14.5pc, or 4.75p, at 37.5p. Fashion commentators do
seem keen for a merger in the industry. Burberry yesterday fell back 2.1pc, or 32p, to 1463p after rumours of a merger with Coach last week sent shares higher.
Stock Spirits Group stole headlines earlier this year as activist investor Western Gate overrode the board to appoint two non-executive directors. The activist, which has a 9.8pc stake in the firm, had also pushed for Stock’s chief executive to step down after the business revised down profit forecasts. Yesterday more changes to the board were announced at the group, which produces premium branded spirits sold primarily in central and eastern Europe.
Three independent non- executives – Tomasz Blawat, Diego Bevi- lacqua and Mike Butterworth – will join the board while Andrew Cripps will step down as senior independent director, to be replaced by John Nicholson.
Blawat is chief executive of Carlsberg Poland, Bevilacqua comes with 40 years’ experience in the food and beverage sector, while Butterworth was formerly group finance director at ceramics company Cookson Group.
Chairman David Maloney said: ‘Stock Spirits has seen a lot of change since its IPO three years ago and these latest appointments should be taken as a clear sign of the board’s unwavering commitment to improving the business.’ Investors seemed largely uninspired by the changes. Shares trickled down 1.6pc, or 2.5p, to 152.5p.
Elsewhere in the world of activist investors, STV Group jumped as Crystal Amber upped its stake in the business. The fund now owns more than 10pc of the media company. Shares gained 6.75pc, or 27p, to 427p.
It wasn’t the only broadcaster whose shares reacted to news across the pond of a potential deal between AT&T and Time Warner.
Entertainment One shares were up 1.5pc, or 3.5p, to 236.2p, while ITV advanced 0.5pc, or 0.9p, to 171.9p despite revealing it is to cut 120 because of Brexit uncertainty around advertising.
The FTSE 100 closed down 0.5pc, or 34 points, at 6986.4.
GlaxoSmithKline fell back as it announced it had submitted a license application for a shingles vaccine to the US Food and Drug Administration. The Shingrix vaccine, which has been trialled in a programme including more than 37,000 people, aims to prevent the virus in people aged 50 or over. If approved, it will be administered in two doses with an interval of between two and six months between. Glaxo slipped 1.1pc, or 17.5p, to 1641p. Household products retailer
McBride said business in the first quarter was encouraging, despite falling sales.
The firm behind brands including Oven Pride and Surcare said sales in the three months to September 30 were 2.9pc lower than the same period a year ago. But McBride said the business was on track to deliver full year expectations.
Shares were flat at 192.5p.