Barclays is expected today to announce the sale of BZW one of the few
Posted in General on 14. Aug, 2010
Barclays is expected today to announce the sale of BZW, one of the few remaining British owned investment banks, to a foreign buyer. The deal, which would be the latest move in an accelerating consolidation of the banking sector, was due to be unveiled at a 7.30am meeting to which all staff have been called.
Market speculation that Commerzbank and ING, the owner of Barings, were the likeliest buyers was last night understood to be wide of the mark.In a second consecutive day of very heavy trading, Barclays shares closed at 1747p, down from the day’s high of 1800p, but more than 20 per cent higher than they traded at only a month ago.Despite the hectic dealing, Barclays said yesterday that it “was not commenting on market speculation”.The future of BZW has been the source of rumour for months following a period in which both Barclays and NatWest banks have come under fire for the performance of their investment banking arms. The company’s performance must rank 50th or above against the FTSE 100 for any shares to be released. If the performance is in the top quartile then 100 per cent of the shares are vested.Centrica’s shares have been on rising trend since the demerger in February as it has begun to unwind its take-or-pay liabilities in the North Sea and fought back against loss of market share to rivals through a series of price cutting initiatives.. A total of five executive directors, including Mr Gardner, were awarded another 1.18 million shares worth pounds 1.1m.
In total the five hold 6 million shares worth pounds 5.7m at last night’s closing price of 94.5p.
Mr Gardner has 2.7 million shares, of which 1.23 million are held under the long-term incentive scheme. Mike Alexander, managing director, has just over one million, finance director Mark Clare holds 774,000, commercial director Peter Lehmann has 967,00 and Roger Wood, managing director of British Gas Services, holds 626,000 shares.Under the Centrica scheme, directors are eligible for share awards equal to 125 per cent of their base salaries. The shares have to be held for a period of five to six years and can only be granted provided certain performance conditions are met based on total shareholder return. It denied putting a valuation of pounds 35m on Mr Waterstone’s latest retail venture, the Daisy and Tom children’s store on London’s King’s Road.That figure, it said, was inferred by WH Smith from its proposal and, if true, implied a valuation of pounds 1.6bn for the group, a substantial premium to its current market value. Roy Gardner, chief executive of the British Gas trading arm Centrica, was last night sitting on shares worth more than pounds 2.5m after the company issued a further tranche of options under its long-term incentive scheme. It also questioned WH Smith’s calculation of advisers’ fees of pounds 34m.. If there is something credible we would like to explore it, but we have a slight feeling that this is the 1980s all over again.”He added that, while new chief executive Richard Handover had a lot to prove, he should retain shareholders’ support.John Richards, an analyst at NatWest Markets, was equally sceptical: “We don’t regard it as a serious offer and taking on that level of debt is potentially problematical for a company with strategic issues to resolve.”He questioned whether Mr Waterstone had the experience or ability to run a public company of WH Smith’s size.The Waterstone team also hit back at the assumptions made by WH Smith in its rejection on Wednesday.
Smith, with more than 500 shops, has been losing market share to supermarkets, which sell many similar lines.Mr Waterstone’s proposals, which envisaged a 200p a share cash payment to WH Smith shareholders, together with a share in a heavily borrowed acquisition vehicle, were still being treated with scepticism in the City yesterday. Analysts and WH Smith’s large shareholders said they were waiting for concrete proposals to be tabled.Despite Mr Waterstone’s claim yesterday that WH Smith chairman Jeremy Hardie had been interested in his proposals as late as Tuesday afternoon, it was not felt that the company had acted hastily in dismissing the plan without putting it to shareholders.One leading shareholder, who wanted to remain anonymous, said: “There is often a lot of sound and not much light in these situations. Ranges would widen, the quality of staff would be improved and buying would get better “Smiths used to do it well We would concentrate on its old values,” he added. “You completely change the culture, you Waterstone it.”Transforming the chain would require beefing up the book section, enlarging the news offering to become the “authoritative newsagent again” and taking the stationery range upmarket. But he admitted that, for his proposals to make sense, he would have to generate like for like sales growth from the core retail chain of 4 to 5 per cent a year, compared to the current flat performance.”It is a complete tragedy to watch this foremost retail brand go backwards at a rate of knots,” Mr Waterstone said, as he promised to transform WH Smith’s drab, underperforming high street shops by focusing on “books, news and beautiful stationery”.He said videos and music would be ditched as WH Smith focused on its three main product lines.
That would reduce the pounds 1bn of debt that SBC Warburg, Waterstone’s adviser, has proposed raising to fund the deal.Making those disposals was not critical to the success of the takeover arithmetic, Mr Waterstone said. Tim Waterstone yesterday promised a root and branch shake up of the “deadening culture” at WH Smith if his takeover proposals for the record shops to stationery group are reconsidered. Speaking for the first time since his audacious highly leveraged takeover plan was rejected out of hand by the company, he outlined his vision for transforming WH Smith’s underperforming high street shops.
Countering the company’s claim that his bid proposals would simply saddle the group with unwanted debt, he promised to sell the Our Price record shops to WH Smith’s partner, Virgin, and to dispose of its American operations. Yesterday’s results came from initial probes of the surface as the spacecraft was establishing a circular orbit – Reuters. Tim Waterstone’s ambitious bid to take over WH Smith remained on the table yesterday as the bookseller outlined his plans for transforming the embattled high street chain Tom Stevenson shared his vision. Scientists told reporters at a news conference at Nasa’s Jet Propulsion Laboratory in Pasadena, California, that the early results from the orbiting spacecraft were “remarkable”.
The mapping project proper is not due to start for another six months.
The latest Martian findings came from the Mars Global Surveyor spacecraft, which began orbiting the planet last month in preparation for a 30-month mapping operation. Australians have been warned against eating undercooked game meat, including kangaroo and wallaby, after doctors discovered what could be a new parasite spread to humans. Professor John Goldsmid, professor of medical microbiology at the University of Tasmania, said that a parasite had been found in a Tasmanian man who had suffered severe muscle weakness. At one stage he needed a ventilator and tracheotomy to breathe.
The professor told the Australian College of General Practitioners in Hobart, that the patient was a big eater of native meat and undercooked wallaby and kangaroo involved “probable dangers”.The International Fund for Animal Welfare, which is campaigning against “the cruelty of kangaroo slaughter and the unhygienic treatment of the meat”, called on supermarkets in this country to stop selling kangaroo meat.