- The Long & Short
- Posts
- š Apollo Gives Up On John Wood Offer
š Apollo Gives Up On John Wood Offer
PLUS: Centre Parcs was put up for sale by its private equity owner, and electrical retailer Currys raised its profit outlook after strong UK demand.
Good morning. In todayās update - Apollo walked away from their second UK bid in less than a week, Centre Parcs was put up for sale by its private equity owner, and electrical goods retailer Currys raised its profit outlook after strong UK demand.
Markets
A quiet day for UK stocks as investors kept one eye on the ongoing debt ceiling talks in the US, whilst banks and financial services firms in particular provided support to markets. Overall, the FTSE 100 and FTSE 250 churned out gains of 0.3% and 0.4% respectively. One notable mover in the FTSE 250 was ASOS - the eCommerce retailerās shares sunk 20% after broker Shore Capital raised questions over the companyās financial stability, following interim results last week.
Top Stories
š Apollo walks from John Wood buyout
For the second time in less than a week, buyout group Apollo Management ruled itself out of an acquisition for a UK company, this time engineering firm John Wood Group. Apollo had previously submitted five non-binding proposals to the John Wood board, all of which were rejected; the latest of these bids valued the company at Ā£1.7bn, a 59% premium to the value before any bid was made public. In response to Apolloās announcement, the John Wood board said they were confident in the āstrategic directionā of the firm, and reiterated the āgood momentumā across the business so far in 2023. John Wood shares sunk 34% on the news.
š Currys outperformed profit forecasts
The electrical goods retailer raised its profit forecast for the year ending April*, driven by better than expected trading in the UK & Ireland, despite the current cost of living crisis. The company now expect profits before tax of Ā£110m-Ā£120m, above its previous guidance of Ā£104m (but lower than the Ā£186m it pulled in last year). CEO Alex Baldock said Currys had focussed on fuller-priced items, whilst cost cutting also had a positive impact on the bottom line. On a less upbeat note, Baldock predicted that the UK tech market would ācontinue to go backwardsā as consumer confidence remained historically low. Shares popped 3% higher on the day. (Official)
*Currys are due to report 2023 annual results in July
šļø Centre Parcs up for sale
UK holiday resort operator Centre Parcs has been put up for sale by its owners Brookfield, the Canadian private equity group. Brookfield are reportedly looking to pocket between Ā£4bn-Ā£5bn from the sale of Centre Parcsā six locations across the UK and Ireland, having acquired the group for Ā£2.3bn from Blackstone back in 2015. Potential bidders werenāt revealed, but its thought that bankers have been drafted in to kick off a process.
What Else Happened?
Economics / Politics / General
The UKās Competition and Markets Authority has found evidence that a lack of competition amongst UK supermarkets has caused higher fuel prices for consumers. (CMA update)
BoE Chief Economist Huw Pill signalled the central bank may be thinking about pausing, saying that he āhopesā they have hiked rates by enough; Separately, Pill addressed previous comments that brits should āacceptā theyāre poorer, saying the backlash āwasnāt helpfulā to communications. (BBG)
Deals
Troubled tech firm WANdisco claims it only has enough cash to last until July, and plans to tap investors for an emergency $30m capital raise.
Todayās VC round up:
OMass Therapeutics - an Oxford University biotech spinout - raised Ā£10m from British Patient Capital for its drug development platform.
ScubaTx - a Newcastle University spinout looking to extend the time organs can be transported for - raised Ā£1.5m.
Company News / Trading Updates
Hotel chain Travelodge benefitted from a resurgence in events and staycations as revenue jumped over 60% in 2022, to Ā£910m.
Diploma - the FTSE 250 supplier of technical products and services - raised its profit forecasts for 2023 after a āpositiveā start to the second half of the year; first half sales jumped 30%. (Official)
After calls to spin off its Asian business were foiled at the AGM two weeks ago, HSBC reassured investors that the region is key to growth and that all parts of HSBC Asia were āmotoringā.
š Global Snapshot
The European Commission cleared Microsoftās $69bn acquisition of Activision, putting the spotlight back on the UKās CMA decision to block the deal on competition grounds.
Vice Media confirmed it has filed for Chapter 11 bankruptcy in the US, seeking protection whilst it plans a sale to lenders for $225m.
Private equity giant TPG agreed a $2.7bn acquisition of Angelo Gordon as it looks to push into private credit markets.
Consumer debt in the US reached a record $17tn in the first quarter of 2023, despite new mortgages sliding to an eight-year low.
š Share The Long & Short
Know any friends who would benefit from having a daily summary of all things UK business and finance delivered directly to their inbox?
Copy and paste this link to others: www.thelongandshort.co.uk/subscribe
Feedback
Got any suggestions for how we can make The Long & Short more useful for you? Fire them over to [email protected] (or just reply to this email).