In a week shortened by a public bank holiday, investors witnessed an uptick in M&A news which may suggest more activity is yet to come. The latest deal on the pipeline came from Blackstone, which agreed to buy Industrial REIT as part of efforts to grow its logistics operations in Europe. Elsewhere in the corporate world, however, the gloom persists with Superdry ditching its full-year guidance after weak start to 2023.
(Bloomberg) — In a week shortened by a public bank holiday, investors witnessed an uptick in M&A news which may suggest more activity is yet to come. The latest deal on the pipeline came from Blackstone, which agreed to buy Industrial REIT as part of efforts to grow its logistics operations in Europe. Elsewhere in the corporate world, however, the gloom persists with Superdry ditching its full-year guidance after weak start to 2023.
Here’s the key business news from London this morning:
In The City
Superdry Plc: A slow start to the year forced the apparel maker to scrap its previous guidance of a broadly breakeven adjusted profit before tax in 2023.
- It now expects a full-year revenue between £615 million and £635 million as the cost-of-living crisis takes a toll on spending and footfall trends, with poor weather conditions also sapping demand for its new spring-summer collection
- Company also said it is now considering steps to strengthen its balance sheet, including a potential equity issue, as part of turnaround efforts
Hays Plc: The recruitment firm expects operating profit and conversion rate to be modestly higher in the second-half of the year, after delivering record fees in the third-quarter.
- “Our key markets continue to be characterized by acute skill shortages and wage inflation, and we are benefiting from our early management actions to increase fee margins in skill-short markets,” its Chief Executive Alistair Cox said in a trading update
Industrial REIT Ltd : Blackstone has agreed to buy the real estate investment trust for 168 pence per share in cash, representing a 2.8% premium to the closing share price on Thursday.
- The deal, which values the London-based company at about £511 million on a fully diluted basis, allows Blackstone to double down on the logistics sector with the UK as its largest market in Europe
888 Holdings Plc: The gambling business still sees an adjusted Ebitda significantly higher in 2023, it said in a statement, citing an “encouraging” performance in the first-quarter of the year.
In Westminster
The UK government is considering proposals to pool private sector defined contribution pension plans in a bid to unlock investment in British industry, Chancellor of the Exchequer Jeremy Hunt told reporters at the International Monetary Fund’s spring meetings in Washington. Calling it the “big reform that now needs to happen”, Hunt said the goal is to improve pension fund returns for members and drive economic growth.
Meanwhile, President Joe Biden wraps up his Irish tour before returning to the US on Saturday. The trip saw formal events overshadowed by a more personal schedule, in which Biden was greeted by crowds more adoring than what he usually gets in America, where his popularity is middling. Yet, he stopped short of announcing a bid for reelection next year at age 81.
In Case You Missed It
Dechra Pharmaceuticals Plc is in talks with Swedish investment firm EQT AB about a possible all-cash takeover of the veterinary drugmaker in what could be among the largest take-private deals in the UK this year. The UK-based company said EQT is proposing to pay 4,070 pence a share, which would value the business at about £4.6 billion.
Looking Ahead
Next week will see the earnings season pick up pace, alongside a fresh batch of jobs and inflation data that will likely be key for the Bank of England’s next meeting in May.The UK’s March consumer prices index is seen falling below 10%, according to estimates compiled by Bloomberg, which would mark a deceleration from 10.4% in February and possibly encourage the BOE to keep rates on hold.
Asset manager Ashmore Group Plc and recruitment firm PageGroup Plc release quarterly updates on Monday, followed by EasyJet Plc’s first half results the day after.
Analysts see the low-cost airline possibly benefiting from travelers cutting down on spending amid the cost-of-living crisis. “An easing of fuel prices and recovering capacity give EasyJet a better chance of nearing its medium-term mid-teen Ebitdar margin goal,” Bloomberg Intelligence’s Conroy Gaynor writes.
Also watch for mining companies Antofagasta Plc and Rio Tinto Plc as well as Deliveroo Plc later in the week.
For a more considered take on the UK’s economic and financial news, sign up to Money Distilled with John Stepek.
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