Below are the key morning headlines from today’s papers, featuring the Financial Times, The Times, The Telegraph, The Daily Mail & more - see the full Press section here.
Retail tycoon Mike Ashley wants to see a 20% tax levied on online sales and prison sentences for executives who consistently “fiddle” their way out of paying the levy, as part of his plan to save the country’s “dying” high streets. He said any companies with more than 20% of their sales generated online should have to pay the tax, which would “level the playing field” in the retail sector and give local councils more money to help encourage people to shop close to home, such as offering free parking. “Why are so many stores closing on the high street? It’s not the high street’s fault it’s dying, we all know the answer: it’s the internet, the internet is killing the high street and I would know because I have £400m of internet business,” Mr Ashley, the founder of Sports Direct, told a committee of MPs. “If you want to save the high street you have to address that problem.” He said 20% of the high street was not saveable, 60% was in critical condition, while the top 20% of stores located in upmarket places like Oxford Street and Bond Street were not relevant.
Glaxo’s £7bn day of drama: Horlicks is sold for £3bn and a US cancer firm is bought for £4bn… But shares tumble 7.6%. GlaxoSmithKline (GSK) is buying an American cancer specialist for £4billion as boss Emma Walmsley seeks to rebuild its pharmaceuticals business. In a dramatic day for Britain’s biggest drug firm, Walmsley revealed it was purchasing Boston-based Tesaro for around £59 ($75) a share, a 62% premium on its previous closing price. The announcement came just hours after Glaxo separately confirmed the £3.1billion sale of malt drinks brand Horlicks to Unilever (ULVR) . That deal initially lifted shares. But the Tesaro announcement sent them crashing back down, wiping almost £6billion off the company’s value, as investors worried that Glaxo had overpaid for assets that did not fit with the rest of its portfolio. But Walmsley and her star scientist, Dr Hal Barron, argued that the Tesaro deal could be transformative for the company. Since taking the helm in April 2017, Walmsley, 49, has led a radical overhaul at Glaxo to get it producing blockbuster drugs again.
Ted Baker shares sink after staff petition against ‘forced hugs’ culture. Shares in Ted Baker (TED) plunged more than 15% after staff called for an end to the “forced hugging” and alleged inappropriate behaviour of the group’s founder Ray Kelvin. A petition set up by staff, which had 2,496 signatures by Monday morning, demanded that Mr Kelvin’s forced hugging policy comes to an end and accused the chief executive of inappropriate behaviour. “The owner regularly makes sexual innuendos at staff, he stroke people’s necks, he took off his shirt on one occasion and talked about his sex life,” read the claim. It also alleged that he has asked female staff to sit on his knee, cuddle him, or let him massage their ears. Pursuing the issue through HR had been “hopelessly ineffective”, the employee behind the campaign claimed. “I went to HR with a complaint and was told ‘that’s just what Ray’s like’,” the person said. Campaign platform Organise, which published the petition, said over 100 anonymous reports of harassment had been sent to Ted Baker’s board.
Shell links chiefs’ pay to green targets. Executive pay at Royal Dutch Shell ‘B’ (RDSB) will be tied to targets for reducing the Anglo-Dutch group’s carbon emissions after it bowed to pressure from investors over climate change. Shell previously had set out a long-term “ambition” to halve the carbon footprint of its products by 2050 but had claimed that binding targets would be “foolhardy”. However, yesterday it said that from 2020 it would set targets each year for the subsequent three or five years and that these would be linked to executive pay. Shell employs about 80,000 people in 70 countries and reported profits of $12 billion last year from operations ranging from exploring for oil and gas to petrol retailing. Ben van Beurden, its chief executive, received about $10 million in pay and perks in 2017.
Quarter of investors ‘could vote against Shire Plc (SHP) takeover’. A former director of Takeda has claimed that investors holding up to a quarter of the Japanese drugs maker’s shares could vote against its £46 billion takeover of Shire tomorrow. However, Kazuhisa Takeda, a member of the founding family and a rebel shareholder, conceded that the level of opposition was unlikely to succeed in blocking the deal. The comments were made at a press conference in Tokyo yesterday as part of a last-ditch effort to recruit opponents. Kunio Takeda, a former chairman, came out against the deal last week.
Tesco demands Sainsbury’s changes. Tesco (TSCO) has said that the proposed merger of Sainsbury (J) (SBRY) and Asda should not go ahead unless “extensive remedies” are provided by its rivals. Britain’s biggest retailer made the remarks in a hearing with the Competition and Markets Authority, which is investigating the supermarkets’ proposed combination. Tesco also questioned the rationale behind the merger and suggested that it could lead to higher petrol prices in some areas. Sainsbury’s and Asda, which is owned by Walmart, of the United States, announced in April that they intended to join forces in a £12 billion transaction that would create Britain’s biggest grocer. They have claimed that the merger can generate at least £500 million of synergies and result in lower prices, better quality and more flexible ways to shop. However, in September the CMA warned that the tie-up posed a substantial risk to competition in 463 locales.
The supply of bad news continues at McColl’s. A convenience stores chain has ended a “very difficult year” by releasing a second profit warning in less than six months. McColl’s Retail Group (MCLS) said yesterday that its full-year like-for-like sales were down by 1.4% and that it now expected to report earnings of about £35 million for the year to November 25. In July, when it last issued a profit warning, McColl’s told the City that it would report earnings of about £44 million. The announcement sent its shares, which touched 280p in January, tumbling by 30%, or 35¼p, to 83½p. The company blamed continued disruption to its supply chain, as well as erratic consumer spending, for its woes. Jonathan Miller, chief executive, said that the business was continuing to recover from the collapse of Palmer & Harvey, a key supplier, last year.
Stobart Group cuts dividend to pour money into aviation and biomass. Investors in Stobart Group Ltd. (STOB) were baling out of the aviation and biomass group yesterday after it said that it was cutting its dividend. Shares in Stobart tumbled by almost 12% to an 18-month low after it said that it would investing more of its cash in building its business. In addition to a 12.5% residual stake in Eddie Stobart Logistics, the trucking company familiar to the nation’s motorway drivers, Stobart Group operates Southend airport, flies some turboprop aircraft on behalf of Flybe and supplies woodchip to incinerators. Stobart Group has been paying a 4.5p quarterly dividend, on the back of the proceeds of a property portfolio built up by Andrew Tinkler, the former boss who created the Stobart empire. Even at a peak price of 300p a share, the stock was yielding 6%, one of the best returns on the market. Stobart Group said yesterday that it would cut the quarterly dividend to 1.5p a share. The shares fell 23¼p to 174½p.
Britain’s biggest estate agent Countrywide (CWD) has thrown its weight behind a new property portal which is seeking to topple the duopoly of Rightmove (RMV) and ZPG Plc (ZPLA) . Rummage4Property has received support from Countrywide, as well as 30 other estate agency groups and some of the largest London-listed housebuilders, such as Barratt Developments (BDEV) and Persimmon (PSN) , all of which have agreed to list their properties on the site. In launching in the UK, expected next year, Rummage4Property will be competing with giants Rightmove and Zoopla, which dominate the property portal space. According to Rightmove’s most recent annual report, it holds more than 70% of the market, while Zoopla has a 20p% share. Rummage4Property chief executive Anthony Codling, a former analyst at investment bank Jefferies, said: “As an analyst, Rightmove is the most profitable company I ever analysed. It has been the dominant number one in the market for more than ten years.
Gas production has stepped up at the Ceres field in the southern North Sea giving Egdon Resources (EDR) a boost. Egdon owns 10% of the Ceres field, which is operated by Centrica’s Spirit Energy. Egdon’s share averaged 1.2m cubic feet of gas per day in November, which was the first full month of production since the installation of a flowmeter. The company said its net gas sales for the month would be in excess of £235,000. Egdon shares climbed 14.8%, or 1p, to 7.75p.
