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What to Watch: Barclays slams activist investor, Bonmarche rejects takeover, and Plus500 shares crash

Oscar Williams-Grut
Senior City Correspondent, Yahoo Finance UK
Barclays offices in New York. Photo: Seth Wenig/AP

Here are the top business, market and economic stories you should be watching today in the UK, Europe and abroad:

Barclays slams activist investor

Barclays (BARC.L) hit out at activist investor Edward Bramson in a letter to shareholders published after markets closed on Thursday.

Bramson’s Sherborne Investors has built a stake of close to 5% in the bank and is pushing Barclays to cut its investment banking activities. Bramson is also campaigning for a seat on the board to help achieve his aims.

“The Board of Barclays strongly opposes Mr Bramson's appointment to the Board of Directors and unanimously recommends shareholders vote against the resolution,” Barclays said in a statement on Thursday.

The board “recognises that Barclays does not yet perform at the level at which it should” but said: “Another strategic overhaul is not what Barclays needs right now.”

Barclays management said Bramson has a “a poor understanding” of the bank and said his plan is “based on multiple factual errors.” He would be “a disruptive and uncollaborative influence.”

Chairman John MacFarlane said: “Essentially we have a leveraged investor seeking enhanced returns by disrupting the deliberations of the board in favour of its specific interest.”

Bonmarche rejects takeover

Bonmarche (BON.L) has said that a £5.7m takeover offer for the womenswear retailer “materially undervalues” the company.

Billionaire Philip Day, who is behind the Edinburgh Woollen Mill Group, earlier in April acquired more than half of the company’s shares through holding company Spectre, triggering a mandatory takeover bid.

Bonmarche said: “The board will be writing to shareholders with its formal response to the mandatory cash offer once the offer document has been posted by Spectre.

“In the meantime, Bonmarche shareholders are strongly advised to take no action in relation to their Bonmarche shares.”

The retailer said it is planning a number of “cost reduction actions across the group and anticipates starting the implementation of these shortly.”

Plus500 shares crash

Online trading platform Plus500’s (PLUS.L) shares plummeted over 40% on Friday after it announced a big drop in revenue.

Revenue at Plus500, which offers contracts for difference to retail investors, fell by 65% to $53.9m in the first quarter of 2019. The number of active customers also dipped by 4% to 97,921.

Plus500’s share price fell by 42% in response.

CEO Asaf Elimelech said: “Given the level of global political and economic news, financial markets were surprisingly subdued in the period, which reduced the number of trading opportunities for customers.”

National Express buys employee bus stake

National Express (NEX.L) has bought a 60% stake in Silicon Valley bus company WeDriveU.

The bus operator announced that it had spent $84.3m on the stake. WeDriveU operates shuttles on university campuses and for Silicon Valley companies such as Nvidia to help their employees easily get to work.

National Express CEO Dean Finch said: "As the premier operator in Silicon Valley and the wider San Francisco Bay Area, WeDriveU provides the opportunity for expansion into a fast-growing market.

“WeDriveU also has a presence in other fast-growing cities in the US, which present other platforms for growth in this very attractive market.”

Pest merger problems

The competition watchdog has found that rat catcher Rentokil’s (RTO.L) takeover of Mitie’s (MTO.L) pest control unit could restrict choice and lead to higher prices for customers.

The Competition and Markets Authority said the deal could see a substantial reduction in competition, which may lead to “higher prices or reduced quality” for customers that primarily use a single provider across the whole or a large part of the UK.

Rentokil must now offer proposals to address the concerns by 23 April or face an in-depth Phase 2 investigation into the merger.

European markets

European markets were generally lower after weak Chinese data stoked fears of a global growth slowdown.

Chinese imports fell by 7.6% year-on-year in March, which was “nearly 6 times worse than the 1.3% decline estimated by analysts and the fourth negative reading in a row,” according to SpreadEx’s financial analyst Connor Campbell.

“The tariff war with the US is responsible for part of it; however, what has people worried are the signs that China’s domestic economy itself is in trouble,” he said.

Britain’s FTSE 100 (^FTSE) was flat, Germany’s DAX (^GDAXI) was down by 0.2%, France’s CAC 40 (^FCHI) was down by 0.1%, and the Euronext 100 (^N100) was down by 0.1%.

Asian markets were mixed overnight. Japan’s Nikkei (^N225) closed up by 0.7%, but the Hong Kong Hang Seng (^HSI) and China’s Shanghai Composite index (000001.SS) were both flat.

What to expect in the US

Futures were pointing to a slightly higher open later in the US. S&P500 futures (ES=F) were up by 0.1%, Dow Jones futures (YM=F) were up by 0.2%, and Nasdaq futures (NQ=F) were up by 0.1%.

Companies reporting later today in the US incldue:

  • JPMorgan Chase & Co. (JPM)

  • Wells Fargo (WFC)