CLIN – Pressure on Triton to up bid
LLOY – Redemptions
MKS – Another brand bolt-on?
RWI – CFO stepping down
RYA – Passenger data
SPDI – Arcona disposals
CLIN – Pressure on Triton to up bid
Media reports (The Times) this week say that PE firm Triton Investment Management is under pressure to raise its 883p/share recommended offer for Clinigen. This is not a huge surprise, given that the shares have traded above 900p since the deal was first announced. A number of hedge funds including Elliott, Sparta Capital and Carlson Capital, are said to believe that the recommended offer undervalues the company. I’m happy to wait and see what (if anything) happens here.
RYA – Passenger data
Ryanair announced its December passenger data on Wednesday. These show that the carrier had 9.5m passengers in the month, which compares favourably to the 1.9m people it carried in the same month in 2020. Load factor of 81% last month is an 8 point improvement on the same month in 2020. For the first 9 months of RYA’s FY22 financial year (which runs to end-March), the Group has carried 70.1m passengers. Omicron has weighed on short-term bookings, but on the strength of these numbers I suspect that the FY total should come in somewhere around 95m (FY21: 27.5m, FY20: 149m)
SPDI – Arcona disposals
Arcona, the Dutch property fund that SPDI is transferring its property assets to in exchange for shares, provided an update on its disposal strategy on Tuesday. The Group has sold two office buildings (Prazska 2 and Prazska 4) in Kosice, Slovakia for €4.55m or 98% of their appraised end-2021 value of €4.63m. Arcona will utilise €2.25m of the proceeds to discharge three short-term loans at fund level. The offices that have been sold had an occupancy rate of just 76.8% and both assets had been on the balance sheet as being ‘held for sale’. Arcona has previously stated that “as soon as the short-term loans at N.V. level have been repaid, it is possible to start buying back the Fund’s own shares, as decided in the EGM on 5 October”. Given the delta between the Arcona share price (€6.80 at the time of writing) and the NAV (€11.77 per share, as at 19 November), a buyback would be very accretive. What would also be very welcome would be news of the progress of the transfer of further SPDI assets to Arcona – the Stage 2 (of 3) agreement was signed in June, with closing guided to take place during H2 2021 (the absence of news since then suggests that this has slipped into 2022).
LLOY – Redemptions
On Tuesday Lloyds Banking Group issued notices of redemptions in respect of a number of legacy instruments. The Group is calling its 7.281% Perpetual Tier One Securities (issued by Bank of Scotland) of which £18m is outstanding; its 7.881% Preferred Securities (issued by HBOS) of which £245m is outstanding, albeit £237m of this is held by HBOS; 12.0% Fixed-to-Floating Perpetuals issued by Lloyds Bank, of which $1.9bn is outstanding; and 13.0% Step-Up Perpetual Capital Securities (issued by Lloyds Bank) of which £134m is outstanding. Adjusting for the securities held by HBOS, this move will deliver £185m (at current FX rates) of recurring coupon savings (although this impact may be reduced if LLOY issues new AT1 securities). The catalyst for this move is that these instruments ceased to count towards AT1 capital from the start of this year. LLOY has a strong capital position (CET1 ratio of 17.2% as at end-September; 23.6% total capital ratio as of the same date).
MKS – Another brand bolt-on?
According to media reports (The Times) this week, Savile Row tailor Gieves & Hawkes has been placed into liquidation. The brand dates back to 1771. The Times said that Marks & Spencer is interested in a potential deal around the brand name, although the ownership structure may complicate this. Last year MKS acquired the Jaeger brand, so it is no stranger to opportunities of this nature. As the UK’s second largest online clothes retailer, adding a recognised brand (G&H had around 60 High Street stores) seems like a no-brainer.
RWI – CFO stepping down
On Wednesday Renewi announced that its well-regarded CFO, the affable Toby Woolrych, is to step down after nearly 10 years in the role. He leaves the Group in excellent shape, with the balance sheet at its strongest in many years and the building blocks in place for continued strong earnings growth.
Theodosian Capital 