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UK News ALEX BRUMMER: Glaxo boss must send the private equity ghouls packing

02:43  13 october  2021
02:43  13 october  2021 Source:   dailymail.co.uk

ALEX BRUMMER: Britain sounds the air raid siren over Meggitt deal

  ALEX BRUMMER: Britain sounds the air raid siren over Meggitt deal As the archdeacon of free market capitalism, the Business Secretary Kwasi Kwarteng, might have seemed an unlikely candidate to bring the proposed takeover of UK aerospace group Meggitt.It is easy to see how Britain’s Sir Sell-off, Nigel Rudd, could have thought he was in for an easy victory after the value of the UK aerospace group had been bid up to £7billion.

Public dissonance with private equity from Legal & General Investment Management and others is falling on deaf ears. The hard-bitten scavengers, which have bid for no less than 366 UK enterprises this year, are showing boundless ambition. The confirmation by Bridgepoint that it will float on the main market in London, and raise £300million in the first instance, must be a good thing which should bring more openness. Less welcome may be the decision of the original 'Barbarians at the Gate' – KKR – to increase a presence in Mayfair with the aim of targeting UK companies.

ALEX BRUMMER : Advanz Pharma ramped up the price of its liothyronine - used to treat thyroid deficiency and thyroid cancer - by 6,000 per cent, raising the cost from £20 to £248 for the NHS. Cinven boasts, as has become fashionable, that as an investor it has a ‘clear set of environmental, social and governance principles’. This vapid slogan, like the promises and pledges made by the private equity ghouls , is not worth the paper it is written on. HG Capital and Cinven preyed on the NHS and toyed with the well-being of fellow citizens and patients.

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As the former boss of the Glaxosmithkline consumer healthcare division, Emma Walmsley has never been in any doubt that it is a crown jewel buried within the pharmaceuticals and vaccine champion.

Long before activists Elliott Partners, and more recently minnow Bluebell, stepped up their agitation at GSK, the chief executive set herself the goal of releasing the value by doing the splits in 2022.

It has been a tricky balancing act because the reliable earnings from the owner of such brands as Sensodyne, Panadol and Tums has helped support R&D in pharma and vaccines as well as sustain the dividends.

ALEX BRUMMER: Tesco steals march on rivals by turning to rail freight

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ALEX BRUMMER : Activist investor Elliott's arrival on the doorstep of GSK may require boss Emma Walmsley to strengthen the defences. By Alex Brummer for the Daily Mail.

ALEX BRUMMER : At 9.54pm on Friday Andrea Leadsom made the most important decision of her short period as Business Secretary. Pictured: Sir Alan Cobham. The family behind defence giant Cobham has slammed the Government for sneaking out a decision to approve its £4billion takeover by a US private equity firm. Ministers were accused of burying bad news by slipping out the announcement at almost 10pm on Friday. Lady Cobham said the decision to allow Advent International to buy the company had been 'cynically timed to avoid scrutiny on the weekend before Christmas'.

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This, at a time, when GSK’s scientific chief Hal Barron is seeking to bring new medicines to fruition. The pandemic illustrated that the distinction between vaccine and oral treatments is increasingly blurred.

The hidden value of the consumer healthcare, a business with a global turnover of £10billion, was never in dispute.

One of the big questions for Walmsley and her advisers was whether to float it off to existing investors or sell.

The preference of long shareholders is a split, which has tax advantages. A trade sale also is a possibility with fast moving consumer goods firms including Unilever and Nestle touted as buyers as they have diversified into the health sector.

There has always been the possibility that private equity, looking for ever-bigger targets, would be in the wings, stirred into action by Elliott’s machinations.

Morrisons faces petrol station probe ahead of £7bn takeover deal vote

  Morrisons faces petrol station probe ahead of £7bn takeover deal vote Morrisons chief exec David Potts (pictured) could make £22m from the proposed £7bn takeover. Regulators are concerned about the number of petrol stations the group would own. Officials at the Competition and Markets Authority are monitoring the situation after Clayton, Dubilier & Rice beat rival Fortress in a bidding war over the weekend.In a rare auction that gripped the City, CD&R tabled a winning bid of 287p a share, which valued the supermarket at £7billion and topped the Fortress offer of 286p. © Provided by This Is Money ( Shares fell 3.7 per cent, or 11.1p, to 285.

GlaxoSmithKline stock jumped early on Tuesday on reports that the pharmaceutical giant’s consumer unit is attracting interest from a number of private - equity firms. The London-listed drugmaker is working to spinoff its consumer healthcare business—a joint venture with Pfizer (ticker:PFE)—and is preparing for a separate listing.

As Publicis boss Maurice Levy explained on French TV, the founder of his agency ‘would have turned in his grave’ at prospect of a deal that left key roles in US hands. Scots-born Ian Read of Pfizer should perhaps contemplate this before launching his expected higher bid for AstraZeneca. As for the tax advantages of the deal, Senator Carl Levin, one of the most powerful figures on Capitol Hill, is creating urgent new legislation to block tax inversions. The truth about big mergers, especially in the ethical drugs industry, is that they struggle. It took Glaxo and SmithKline almost a decade to clear up the

Confidence is so high that IMF warnings of surging inflation, higher interest rates and a world awash in debt seems no obstacle to ambition.

Bloomberg reports that among the potential predators are Advent, CVC Partners and the new look ‘Barbarians at the Gate’ themselves, KKR.

The proposed price tag of £40billion would elevate it to the top of the public-to-private buyout list if it came to fruition.

Indeed, that might just be a starting point. Those of us who believe in the future of the UK’s healthcare and pharma enterprises, key sectors for the UK, would fear the impact of a private equity offer.

Among other things it could leave core pharma and vaccines vulnerable to one of the Covid vaccine-empowered US giants, Pfizer, Moderna or Johnson & Johnson.

Robust chairman Jonathan Symonds, now personally under fire from dissident Bluebell, must hold his nerve.

Unscrupulous activists and private equity ghouls must be seen off the battlefield.

Grammys release inclusion requirement to ensure diverse show

  Grammys release inclusion requirement to ensure diverse show LOS ANGELES (AP) — The Grammys will stick to its word with the public release of the full inclusion rider to ensure equity and inclusion in hiring on all levels of production for next year’s ceremony. The Recording Academy released on Tuesday an eight-page document detailing the rider’s purposes and objectives. The agreement requires producers to recruit and hire more diverse candidates backstage and in front of the camera for the 64th annual awards ceremony on Jan. 31. (AP Photo/Julio Cortez, File) The Recording Academy released on Tuesday an eight-page document detailing the rider’s purposes and objectives.

ALEX BRUMMER : How Aviva got it wrong targeting Glaxo boss - DiazHUB. Often on Monday mornings, listeners to Radio 4's flagship Today show wake to the withering comments of David Cumming, chief investment officer of insurer. Post to Tumblr.

Glaxo stock (GSK.London) was close to 3% higher in late morning London trading, while the company’s American depositary receipts (GSK) were 3.1% higher in premarket trading in New York. Earlier this year, Glaxo said the demerger was on track to be completed by mid-2022. The split would see the consumer unit, which includes Sensodyne toothpaste, Centrum vitamins and Advil painkillers among its brands, become an independent business with separate headquarters. The existing company will receive a dividend of up to £8 billion from the separation and will continue to focus on pharmaceuticals

Mud Hut

The shares of tech firms are often volatile in their first year on the public markets. Amazon dropped after it first floated at $18-a-share and now trades at around $3,250!

Nevertheless, the speed of the decline in The Hut Group (THG) shares has been truly spectacular, tumbling 58 per cent in the last 25-days.

What is disturbing is that the latest 35 per cent descent came within hours of founder-chairman Matt Moulding emerging from a capital markets teach-in.

His main task was to explain why he was opting to float off THG’s technology arm Ingenuity.

The aim, he explained, was to secure the support of Softbank and its clients, and gain access to new investors.

In this attempt to mollify, he singularly failed. There is much about the governance of THG to be concerned about.

This ranges from the ‘golden’ share, which gives Moulding a veto over deals, to inter-company property arrangements. All of this has been known about since the float last year.

The run on the company’s shares came after a warning from the City firm The Analyst that Ingenuity and the whole group was overvalued.

ALEX BRUMMER: Fat cats squeal now they can't rely on cheap labour

  ALEX BRUMMER: Fat cats squeal now they can't rely on cheap labour ALEX BRUMMER: UK business leaders demand the Government reopen borders to overseas labour to avert a Christmas crisis. They seem intent on defeating Boris Johnson's plan for Brexit.Business leaders demand that the Government rapidly reopen the borders to cheap overseas labour in order to avert a Christmas crisis.

The report sparked aggressive activity by four short-sellers who were again active in latest trading. The London Stock Exchange should take a look.

Moulding normally is ebullient about the prospects for his company. He has plainly been shaken. He sought to reassure investors, including his employees, that this was short-term volatility.

In spite of the slide in shares, the company remains highly cash generative and has access to bank facilities. That should provide some comfort to shareholders fearful of a deeper crisis.

Chinese teaser

Kristalina Georgieva lives on at the IMF, in spite of being placed on probation by the US Treasury Secretary Janet Yellen.

Yet some things at the World Bank and IMF don’t change. First question to chief economist Gita Gopinath at the online press conference on the World Economic Outlook came from the Chinese media. There’s a surprise.

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This is interesting!