Italian jitters
Political risk within European markets ratcheted up this week, after Italian president Sergio Mattarella refused the anti-establishment Five Star Movement/League coalition’s choice of finance minister, Paolo Savona. The rise of the anti-establishment parties and nomination of eurosceptic Mr Savona – and the ensuing concerns around the security of Italy’s EU membership – sent the yield on Italian two-year government debt up to a near six-year high. Mr Mattarella has appointed former International Monetary Fund official Carlo Cottarelli as interim prime minister. If the populist parties cannot agree talks to form a new government, the electorate is expected to head back to the polls in the autumn.
Hot property
IWG in PE sights
Investment groups are circling IWG (IWG). The temporary workspace provider has rejected another private equity approach, this time from Prime Opportunities Investment Group, which said it was still considering making a formal offer. The Regus office owner was last month forced to announce that it had received separate all-cash takeover proposals from private equity groups Lone Star, Starwood Capital and TDR Capital, following a sharp uptick in its share price. Those three have until 8 June to make a formal offer, while US-based Prime Opportunities must do so by 26 June.
Into the fold
Pret takeover
Investment giant JAB looks set to secure its foothold in the global coffee market by buying UK-based sandwich shop chain Pret A Manger. The investment vehicle – owned by Germany’s Reimann family – already has majority stakes in coffee specialists including Jacobs Douwe Egberts, US coffee chain Peet’s and Keurig Green Mountain, among others. Private equity group Bridgepoint bought Pret in 2008 for £364m and while the sale price has yet to be confirmed, reports suggest it will realise its investment for £1.5bn. Pret, which generates £879m via its 530 stores, will give its 12,000 staff a £1,000 bonus once the deal completes.
Plastic not fantastic
EU ban proposed
European regulators have stepped up plans to ban single-use plastics, to help protect marine life. The European Commission has proposed banning 10 items including single-use cutlery, plates and straws by 2021, which together with discarded plastic fishing equipment, account for 70 per cent of marine litter. The EU estimates the ban – which would have to be approved unanimously – would help avoid 3.4m tonnes of carbon emissions. The new rules would also require member states to collect 90 per cent of single-use plastic drinks bottles. Meanwhile, producers will be forced to contribute to the clean up and recycling costs of products including balloons, food containers and wet wipes.
Sorrell’s S4
WPP take-two?
Most people expected Sir Martin Sorrell to return to the public stage following his ungraceful departure from WPP (WPP). Few expected him to do so this quickly. Just over a month after being ousted from the advertising giant he helped establish, Sir Martin has been appointed executive chairman of S4 Capital, a new business with a remarkably familiar strategy: “to build a multi-national communication services business, initially by acquisitions”. The company has been formed after Sir Martin’s investment vehicle, S4, reversed into the shell of listed-group Derriston Capital (DERR). S4 recently raised £51m to fund the transaction, to which Sir Martin contributed £40m.
Risers and fallers
| TATE & LYLE | 12.56 |
| SOFTCAT | 12.25 |
| RENOLD | 12.23 |
| GREENCORE GROUP | 9.903 |
| ELECTROCOMP. | 9.75 |
| CENTAMIN | -25.46 |
| PETRA DIAMONDS | -23.64 |
| ENQUEST | -22.08 |
| DIXONS CARPHONE | -21.18 |
| PREMIER OIL | -20.91 |
Week to 29.05.18
Agri powerhouse
Bayer/Monsanto approved
German pharmaceuticals and chemicals giant Bayer has received regulatory approval to buy US rival Monsanto, following two years of scrutiny by regulators. The US Department of Justice gave the green light to the $66bn (£50bn) takeover – which will require $9bn of divestments to German chemical group BASF – after the European Commission signed off on the deal earlier this year. Among the businesses to be sold to BASF are those that Bayer and Monsanto compete directly in, including Bayer’s cotton, canola, soyabean and vegetable seed business, which along with its Liberty herbicide business rivals Monsanto’s Roundup.
RBS CFO search
Stevenson out
Just as Royal Bank of Scotland (RBS) was granted greater certainty over its future – following its settlement with the US Department of Justice (DoJ) – it now faces questions over its leadership. The state-owned banking group announced chief financial officer Ewen Stevenson would be resigning to take up a position elsewhere, after four years in the role. The news follows speculation the group’s chief executive, Ross McEwan, may soon announce his departure, after the lender’s $4.9bn agreement with the DoJ to settle its investigation into the mis-selling of mortgage-backed securities prior to the financial crisis. Mr Stevenson will stay in his role while the search for his replacement is ongoing.
