Electric Business
A brief summary of business news to keep you informed on company start-ups, corporate downsizing and mergers and acquisitions. This service is free to access here or it can be emailed to you monthly. Just sign up.
Latest business news:
Shop Direct, the owner of the Littlewoods and Woolworths brands, is to close its call centres in Sunderland, Burnley and Newtown, with the loss of up to 1,500 jobs.
The value clothing retailer Ethel Austin and its sister company the homewares chain Au Naturale have gone into administration. The administrators say that in the current economic climate there is no guarantee that buyers will be found for the businesses and that they are “unable to rule out store closures and redundancies”. There are around 300 Ethel Austin outlets in the UK. The global financial crisis has hit the retail sector particularly hard and the adverse weather conditions in early 2010 have exacerbated the situation.
Toyota Motor Europe is to recall of up to 1.8 million of its vehicles to solve “a potential accelerator pedal issue”. The affected vehicles include the Auris, Avensis, Corolla, iQ, Verso and Yaris models, and 180,865 of them are in the UK. The global recall will cost the Japanese carmaker billions of dollars and its share price fell by more than 10% following the announcement. Miguel Fonseca, managing director of Toyota GB, said “At Toyota, we’ve built our reputation on quality, durability and reliability and most importantly trust. We want to rebuild that trust with our customers by effectively working through this issue.” The news came just days after the company announced that it was cutting up to 750 jobs in the UK.
Crystal Palace Football Club has gone into administration.
Adams Childrenswear has gone into administration for the second time in as many years. The administrators hope to sell the 75-year-old retail clothing business as a going concern. Adams, which is also known as JS Childrenswear Ltd, has more than 100 stores in the UK, and a further 19 concessions in the UK and Eire, and employs over 1,100 people.
Figures from the Office for National Statistics show that during the last quarter the number of unemployed people in the UK fell by 7,000 to 2.46 million, the first fall in the unemployment count since May 2008. However, the number of people in full-time employment fell by 113,000, while the number of people in part-time work increased by 99,000 to reach a record high of 7.71 million. There were 1.03 million employees and self-employed people working part-time because they were unable to find a full-time job; this is the highest figure since comparable records began in 1992, and is up 46,000 on the quarter.
Google has won the rights to broadcast live coverage of the Indian Premier League (IPL), in a landmark deal which will see all 60 games streamed online around the world on YouTube. The IPL, established in 2008 and based on the popular 20-over form of the sport, sees the world’s best players, such as Andrew Flintoff and Kevin Pietersen, auctioned off to the highest bidding city-based team.
The consumer price index (CPI) in the UK rose by 1% between November and December 2009, the largest ever month-on-month increase. The CPI is the government’s preferred method of measuring inflation, and increased from 1.9% to 2.9% over the period. The figures sparked fears of inflation getting out of control, but statisticians pointed out that the record increase is due to a number of exceptional events that took place a year before, specifically the reduction in the rate of VAT, the fall in the price of oil and drastic pre-Christmas sales, which led to the CPI falling by 0.4% between November and December 2008.
The Court of Appeal has ruled that BSkyB must reduce its stake in ITV. The satellite broadcaster bought 17.9% of the company in 2006 in a move widely believed to be an effort to prevent it merging with NTL (now Virgin Media). The court has backed the Competition Commission’s view that it is not in the public interest for BSkyB to own more than 7.5% of its rival. Separately, ITV has been given the go-ahead by the regulatory authorities to broadcast ITV1+1, a time-shifted version of its flagship channel. The move should reap the broadcaster an increase in advertising revenue for very little expenditure. ITV will also launch a high-definition channel, ITV1 HD.
E-Clear, the company that processed the online ticket sales of the collapsed travel firm Globespan, has itself been forced into administration by the High Court. The legal action was brought by Globespan’s administrators, PriceWaterhouseCoopers. E-Clear is believed to owe around £35m to Globespan and it is reported that the Serious Fraud Office is now looking into the activities of the credit card processing company.
Trading in shares in Handmade Films has been suspended “due to uncertainty in relation to the financial position of the company”. The company was founded by the former Beatle George Harrison in 1972 and its films include Life of Brian, Withnail & I and Lock Stock & Two Smoking Barrels.
Royal Mail is to increase the price of standard first and second class stamps by 2p, to 41p and 32p respectively, from 6 April 2010. However the prices for ordinary meter and account business mail will remain at 36p and 25p for standard letters weighing up to 100g. Royal Mail points out that UK stamp prices are among the lowest in Europe, with the average cost of sending a 100g item by first class post or equivalent across the continent now standing at 82p.
The proposed merger between Ticketmaster and Live Nation has been given the go-ahead by the Competition Commission. Critics had voiced concerns that the merger of the event promoter and the ticket seller would result in the combined entity monopolising the market for live music, with a detrimental effect on ticket prices. The merger is yet to be approved in the US, where it has met with vociferous opposition, most notably from Bruce Springsteen.
Portsmouth Football Club’s financial worries continue with rumours of a winding up petition served by HM Revenue and Customs (HMRC), and a full court hearing scheduled for February 2010. The Premier League is to use the club’s latest payout of TV rights income to pay off debts owed to other clubs including Chelsea, Tottenham Hotspur and Watford for unpaid transfer fees. The club also failed to pay its employees’ December wages on time. Another venerable football club, Notts County, has been served with a winding-up petition by HMRC over an unpaid tax bill believed to be in the region of £400,000.
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Latest company mergers and acquisitions:
The US project management firm Versar has acquired the UK-based Professional Protection Systems. PPS manufactures protection equipment for the nuclear industry.
The Tall Group, a provider of special cheques and payment solutions, has acquired Card Data Management. The company, which trades as ID Data, provides secure card payment services.
KKR, an alternative asset management firm, has acquired the pet retail chain Pets At Home from the investment company Bridgepoint.
The online gaming company Sportech is to acquire Scientific Games Racing, a division of the US-based gaming systems specialist Scientific Games Corporation, for up to £51.4m. As a result of the acquisition, the combined company will be a leading pool-based betting systems provider focusing on football and horseracing services. To fund the deal Sportech has sold a stake in its business to software firm Playtech who will bring e-gaming solutions to the group.
Watson Pharmaceuticals has acquired the UK-based Eden Biopharm Group. Eden will become part of the global brands division at Watson and boost its biopharmaceutical development and manufacturing capabilities. Watson already owned a small stake in the business following its previous acquisition of the Arrow Group.
The private equity firm Advent International has acquired Xafinity, the pensions administration and employee benefits consultancy.
Warburg Pincus, the private equity firm, is to acquire a majority stake in the safety and survival equipment manufacturer Survitec Group. Survitec’s management will retain a minority share in the company, which was previously owned by Montagu Private Equity. It hopes that investment from Warburg Pincus will allow the company to continue its global expansion.
The engineering and project management company Amec has acquired Currie & Brown, an Australian cost management consultancy.
The business telecommunications provider SpiriTel has acquired Boucon Network Solutions, a Swansea-based telephony specialist.
Vindon Scientific, a company that provides environmental testing and storage solutions, has acquired Westech Instruments, a US-based business that has been distributing Vindon products since 2006. There are plans to expand the US business, which will now trade as Vindon.
West Africa Diamonds, a mining company with projects in Guinea and Sierra Leone, is to complete a reverse takeover of Stellar Diamonds, which operates in the same region.
Horizon Print Finishing Equipment has acquired Graphic Arts Equipment, a finishing equipment distribution company that went into administration at the beginning of 2010. The newly formed company will trade as Intelligent Finishing Systems.
The environmental consultancy RSK Group has acquired Green-Car-Guide.com, a website providing news and information on green vehicles. RSK believes this may be the first deal of its kind for an environmental consultancy and plans to utilise the website in its work within the transport sector.
The education and information group Pearson will expand the services offered by its business publication The Financial Times through the acquisition of Medley Global Advisors. Medley provides macro policy information for hedge funds, asset managers and investment banks.
Amobee Media Systems is to acquire the UK-based mobile advertising company RingRing Media. Amobee, which provides advertising solutions for mobile operators, plans to create the industry’s largest mobile advertising exchange by using RingRing’s platform to connect advertisers, media buying agencies, mobile publishers, operators and application developers.
The advertising agency JCDecaux has purchased certain assets of Titan Outdoor Advertising, including the rail and retail divisions, after the company was placed into administration.
West Ham United Football Club has been acquired by David Sullivan, the former owner of Birmingham City. He has purchased a 50% controlling stake in the club, and will become joint chairman alongside David Gold, his partner at Birmingham.
Adecco Group has acquired the US recruitment company MPS Group. The MPS UK subsidiaries Badenoch & Clark and Modis International will join Adecco UK but will continue to operate as individual businesses.
SDL, the translation and information management software provider, has acquired the ecommerce software specialist Fredhopper. The acquisition allows SDL to move into the retail sector and create new solutions for online customer support. Fredhopper will operate as SDL eCommerce Technologies.
The ICT infrastructure specialist Logicalis Group has acquired NetStar Group, an IP network service provider in the Asia-Pacific region and the US, for $19.8m.
Teachers’ Private Capital, the investment department of the Ontario Teachers’ Pension Plan, has acquired the UK-based organisation Acorn Care and Education. Acorn operates a network of schools and fostering services for children and young people with learning difficulties.
James Fisher & Sons, the specialist marine services provider, has acquired Australian Commercial Marine through its subsidiary FenderCare Marine Solutions. The £3m acquisition allows FenderCare to expand in the Asia-Pacific region where ACM is a local supplier of equipment to the commercial shipping and offshore industries.
Halma, a group of companies that develops health, industrial safety and hazard sensor technologies, has acquired the US firm SphereOptics for £1.5m. SphereOptics, which specialises in light measurement products, will merge with Labsphere, a company within Halma’s health and analytics division.
Daily Mail & General Trust has acquired a 50% stake in the property search engine Globrix through its consumer website division Associated Northcliffe Digital. Globrix will become part of The Digital Property Group, AND’s network of property sites that already includes Primelocation.com and FindaProperty.com.
Spectrum Interactive, the internet kiosk and WiFi provider, has acquired the specialist marina WiFi operator Ocean Wave Europe. As a result, Spectrum will be responsible for connecting around 15,000 permanent and visiting berth holders to the internet at 40 marinas in the UK and Ireland.
Jardine Lloyd Thompson Group has strengthened its employee benefits consultancy service with the acquisition of iimia Wealth Management, a division of Midas Capital. JLT hopes to benefit from iimia’s expertise in discretionary portfolio management, as the popularity of arranging personal pensions grows.
Deloitte has expanded its capabilities in the real estate market with the acquisition of the property advisory firm Drivers Jonas. Deloitte will create a new company trading as Drivers Jonas Deloitte that will offer real estate advisory and transaction services.
After much negotiation, Kraft Foods has announced it is to acquire Cadbury for £11.6 billion. The combined group will be a global market leader with a portfolio of 40 confectionery brands, and both companies stand to benefit from an increased international presence. Kraft is having success in developing markets such as China, Brazil and Russia, while Cadbury offers a strong position in Europe and India.
The accountancy firm Cowgill Holloway has merged with the Liverpool-based accountancy Jackson UK. The combined company will operate as Cowgill Holloway.
Virgin Holidays has acquired the tailor made and escorted holiday firm Bales Worldwide.
Perspective Financial Services ended 2009 with the acquisition of the financial planning firm Platinum Portfolios. The company has since acquired the Somerset-based firm Future Lifestyle, which will become part of Perspective’s subsidiary Charles Reynolds Associates.
Impact Holdings, a provider of short term funding solutions and business services, is to acquire Sutherland Professional Funding.
Alberto Culver Company, the US-based manufacturer of beauty care brands such as TRESemme, St. Ives and Alberto VO5, has acquired the UK company Simple Health & Beauty. As a result of the acquisition, Alberto Culver will become the second-largest skin care manufacturer in the UK, its primary foreign market.
Latitude Digital Marketing has announced a management buy-out backed by the private equity firm Vitruvian Partners.
Wolseley UK, the construction materials distributor, has sold its entire business in Ireland to WIBHM Limited for £23.8m. The Irish network consists of 67 branches, including a subsidiary in Northern Ireland.
Obtala Resources, a mining company with interests in East Africa, has acquired Sierra Leone Hard Rock, a subsidiary of African Minerals.
Pinnacle Telecom Group has acquired the business internet and telecommunications provider Solwise Telephony, and its subsidiary Sipswitch.
Vertu Motors is to acquire its first dealership in Scotland through its subsidiary company Bristol Street First Investments. Specifically Vertu will acquire Boydslaw, the owner of the Ford dealership Dunfermline Autocentre, for around £2.7m.
The directors of the vocational training provider JHP Group have completed a management buy-out of the company backed by Lloyds TSB Development Capital.
The marketing communications group Media Square has acquired Chick Smith Trott, an advertising agency formerly part of the Cagney group. CST will be based at the same offices as The Gate, Media Square’s existing advertising agency.
Designed for companies that offer services and consultancy to organisations undergoing significant corporate change, M&A News offers you a fresh list, every month, of finance directors, HR directors, marketing directors and chief executives. All companies featured have been involved in M&A activity during the last month and are likely to be spending budget on consultants and advisers to deal with a raft of corporate issues thrown up by merging or acquiring new companies.
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The bookshop chain Borders UK has closed its doors for the last time after administrators failed to find a buyer for the business. The company operated 45 Borders and Books Etc stores across the UK and employed 1,150 people.
In his pre-Budget report, the Chancellor of the Exchequer has announced that the planned 1% increase in corporation tax for small businesses will be deferred. Alistair Darling’s plans also include a 0.5% increase in employees' and employers’ national insurance contributions, a super-tax on bank bonuses which will be paid by the banks and not the individuals concerned, a reduction to 10% of the tax on profits derived from patents, and a 1% cap on public sector pay rises. Other changes include a 2.5% increase in the state pension and a 1.5% increase in child benefit, both from April 2010.
Corus is to mothball part of its Teesside plant with the loss of 1,700 jobs. The steelmaker blames the decision on the loss of a major contract and accuses four international customers of reneging on a ten-year deal that was signed in 2004. The chief executive of Corus, Kirby Adams, said “We are acutely aware that this will be devastating news for our employees, our contractors, their families and the local community…This is the last thing we wanted and we feel deeply about what is happening. Sadly, it has become unavoidable, through no fault of our people on Teesside”.
The US internet giants Google, Facebook, eBay and Yahoo have written to the business secretary Peter Mandelson, urging him to remove a clause on copyright from the government’s new Digital Economy Bill. The clause gives any future secretary of state the power to amend the Copyright, Design and Patent Act, and the companies claim that this could discourage innovation and impose unnecessary costs on companies that develop new technologies in the future. The government says that the clause is necessary to combat copyright theft.
The Bank of England has revealed that it secretly lent Royal Bank of Scotland and HBOS £62bn in order to save the companies from collapse at the height of the banking crisis. The revelation was met with anger by some shareholders of Lloyds TSB, who were unaware of the loan when they voted for Lloyds to merge with HBOS.
Blacks Leisure has avoided administration by coming to a company voluntary agreement with the landlords of its shops. The operator of the Milletts and Blacks outdoor clothing stores will now implement a turnaround strategy which will see the closure of around 90 outlets and the refurbishment of the remainder.
Mothercare is to open a further 31 of its successful out-of-town parenting centres over the next three years. The mother and baby goods retailer says that 65% of its UK stores profit comes from outlets of this type. The company has also identified 90 less profitable high street stores on which the lease expires within the next three years, and it plans to either move these to out-of-town locations, renegotiate rental terms or close the outlets altogether. In addition, Mothercare plans to open 12 in-town ‘landmark’ stores in high footfall sites, and it expects the changes to deliver a £10m increase in profits each year by 2012.
T-Mobile has said that it believes that some of its employees sold the personal details and contract expiry dates of thousands of its customers to the mobile phone operator’s competitors. The customers were then cold-called prior to the expiry dates and offered alternative contracts with rival firms. The Information Commissioner’s Office has investigated the case and says that the information was sold on to several brokers and that “substantial amounts of money have changed hands”. The ICO is preparing a prosecution file.
The Communications Workers Union and Royal Mail have reached an interim agreement in their dispute over modernisation and terms and conditions, and the planned postal strikes have been called off. The strike ballot remains in place and further strikes are possible in the New Year if a permanent agreement is not reached.
General Motors has reversed its decision to sell its European operations, including Vauxhall in Britain and Opel in Germany. The company says that the U-turn is due to an improving business environment for GM and the importance of Opel and Vauxhall to its global strategy. Unite, the union that represents workers at Vauxhall’s plants in Luton and Ellesmere Port, described the news as “fantastic”.
The government has invested a further £25.5bn in Royal Bank of Scotland, taking its share in the bank to more than 84%. To comply with European state aid requirements, RBS will be forced to sell off parts of its business including all RBS branches in England and Wales, all NatWest branches in Scotland, Direct Line, Churchill Insurance, Green Flag, its Global Merchant Services and its stake in RBS Sempra Commodities.
Lloyds Banking Group has launched the UK’s biggest ever rights issue, which will see £13.5bn worth of new shares in the bank being put on the market. To maintain its 43% share of the bank, the government is also to buy a further £5.7bn worth of the company’s shares. In addition, Lloyds is to sell off the TSB brand and the Cheltenham & Gloucester and Intelligent Finance businesses.