Activist investors hunt for UK targets with as many as 54 London-listed firms in the firing line
A BULLSEYE has been drawn on the backs of British company bosses as activist investors ramp up their hunt for UK targets this year.
Experts reckon the energy, consumer and industrial sectors could be the most vulnerable.
As many as 54 London-listed firms are in the firing line.
It comes after Entain, the owner of Ladbrokes, and Wagamama owner The Restaurant Group both survived takeover bids last year.
Dr Martens and Purplebricks were also in activists’ sights.
Activist investors are typically hedge funds that build stakes in companies, and then agitate and jostle for change.
When activists ask for costs to be cut, jobs are often lost.
They like to make a noise with calls for the removal of bosses, a change in strategy, asset disposals or — in the most extreme cases — for the company to be put up for sale.
They target struggling firms with sluggish share prices, hoping to make a buck from a price bump when their arrival gives the boardroom a jolt.
Even huge international companies are not immune.
In the US, entertainment giant Walt Disney is currently fending off an approach by Nelson Peltz, the aggressive hedge fund owner and father-in-law to Brooklyn Beckham.
An “Activist Alert” report by UK management consultancy Alvarez & Marsal says Britain is a particular lure because firms here offer good value.
Hedge funds are accused of being driven by short-term profits and not the long-term health of the businesses.
However, the consultancy found that British companies targeted by activists typically had a nine per cent rise in their valuation after five years.
Alvarez & Marsal’s Malcolm McKenzie said: “Boards should expect increased scrutiny and challenge from activists.”
Asda fuel defence
THE private equity owners of Asda yesterday attempted to tell MPs that they didn’t mean to rip-off drivers with high petrol prices.
A competition investigation found last year that Asda had trebled its fuel profit margins ever since its £6.8billion takeover by TDR Capital and the billionaire Issa brothers.
TDR’s Gary Lindsay said: “There wasn’t a particular strategy to bump the price of fuel or to make a larger profit on fuel.”
Critics have said Asda is under more pressure to make bigger profits to service the debt taken on in the takeover.
Industry experts say that since Asda’s fuel became more expensive, it has allowed rivals prices to also drift up.
Boohoo model site axe
FASHION firm Boohoo is closing its multi-million pound factory in Leicester — less than two years after it opened to much fanfare.
The site, which launched in April 2022, had been part of the brand’s aim to restore its reputation after a scandal over poor treatment of workers.
It employs around 100 staff making clothes and printing T-shirts for its stable of brands including Dorothy Perkins and Karen Millen.
A spokesman said the factory would shut in due course “to ensure we are a more efficient, productive and strengthened business”.
They said the firm had entered into consultation with affected workers.
Hays job fever on the wain
ONE of the country’s biggest recruitment firms, Hays, could cut more jobs in further signs of a slowdown in the market.
Shares slipped by eight per cent after a warning that profits were likely to tumble from £73million to £60million.
Hays has already axed 1,100 jobs over the past year and the tough conditions mean more could be lost as bosses try to save £30million in costs.
Hays’ fees across the globe fell by ten per cent in the last three months of 2023 but the sharpest slump has come in the UK and Ireland, where they have dropped by 16 per cent.
Big British companies such as Barclays and BT have already slashed thousands of jobs, while others are delaying hiring as they wait for greater confidence in the economy.
Figures from job site Indeed show teachers and delivery drivers are most in demand, with those roles seeing the highest number of vacancies.
EU probe A.I union
JUST months after ChatGPT’s boardroom became a circus, their largest investor Microsoft is now facing a full probe by European regulators.
Microsoft has a $13billion stake in ChatGPT’s owner OpenAI but maintains it is not a traditional investment.
The firm took a key role in the power struggle with founder Sam Altman, highlighting the links.
Regulators now want to see if the AI partnership risks “distorting market dynamics”.
B&M sales gain
BARGAIN hunters boosted sales at B&M over the festive period with the retailer enjoying a 5 per cent rise in sales over the past three months.
Its sales rose by 3.7 per cent during the period as shoppers used the discounter for decorations and Christmas gifts.
CEO Alex Russo called the performance “pleasing”.
B&M plans to open 45 more UK shops this year, and 20 more of its cut-price grocery chain, Heron Foods.
Cut-price chain Shoe Zone also saw a sales rise, and profits up by almost a fifth.
Drug takeover
DRUG giant GSK has struck a £1billion takeover of asthma drug firm Alios Bio.
The move gives it access to a jab, still in trials, which could be given to patients twice-yearly rather than monthly.
737 flightmare
THE nightmare at planemaker Boeing shows no sign of ending, with Alaska Airlines and United finding loose bolts on their 737 Max 9 aircraft.
The discovery came days after a door was blown out during a flight.
The plane, carrying 171 passengers, made an emergency landing.
The US has grounded 171 of the latest and most popular Boeing model.
There are thought to be 215 Max 9s in service, but none at UK airlines.
Ryanair uses Max 8s, and has a big order of the next 737 version, the Max 10.