Yahoo Finance What to Watch: Mike Ashley's Debenhams coup, Goals shares battered, and Deutsche Bank merger talks
Here are the top business, market, and economic stories you should be watching today in the UK, Europe, and abroad:
Mike Ashley launches Debenhams boardroom coup
Sports Direct (SPD.L) founder Mike Ashley has launched a dramatic attempt to oust the board of directors at department store Debenhams (DEB.L) and take control of the failing retailer.
In an update late on Thursday, Sports Direct said it had called a general meeting to remove all but one of the current members of Debenhams’ board and install Ashley. If successful, Ashley would leave Sports Direct and focus on turning around Debenhams full time. Ashley and Sports Direct currently own just under 60% of Debenhams.
“The board has been engaging with Sports Direct and our other stakeholders regarding options to restructure our balance sheet and is disappointed that Sports Direct has taken this action. In the meantime, discussions to address our future funding requirements are well advanced,” Debenhams said in a statement on Friday morning.
Shares in Debenhams jumped by 18% in response to the news of Ashley’s coup attempt. Earlier this week Debenhams shares fell by 11% in a day after the retailer put out its fourth profit warning in 18 months.
Goals shares battered
Shares in Goals Soccer Centres (GOAL.L) dived after the operator warned that annual profits will be “materially below expectations” due to accounting errors uncovered as part of a review.
The five-a-side football pitches operator said that the board and its auditors are working to resolve accounting errors for the financial year ending 31 December 2018. In addition, they are reviewing some “accounting practices and policies”.
The firm also said that while the “accounting adjustments” are of a non-cash nature, Goals is in breach of one of its banking covenants.
“We are in discussions with the bank with a view to agreeing re-negotiated facilities,” Goals said.
Shares in Goals collapsed over 46% to 30p at the market open. They have recovered somewhat since, but remain down by 28% after close to an hour’s trade in London.
Deutsche Bank merger talk heats up
German magazine Focus has reported that the CEOs of Deutsche Bank (DBK.F) and Commerzbank (CBK.F) have resumed merger talks.
Deutsche Bank has long been rumoured to be considering a tie-up with the rival German lender as part of efforts to reverse years of underperformance.
“While some may see this as a necessary step to helping support the German banking sector, we already know from bitter experience that merging two struggling banks has the potential to be a recipe for disaster,” Michael Hewson, the chief market analyst at CMC Markets, said in an email.
Both Deutsche Bank and Commerzbank declined to comment on the story.
Worst February in a decade for High Street
High Street retailers suffered their worst February in a decade, according to a new survey.
In-store sales were down 3.7% last month from February 2018, according to BDO’s High Street Sales Tracker. Sophie Michael, head of retail and wholesale at BDO LLP, said, “Consumer confidence is teetering on the precipice and shoppers are resisting unnecessary spending.”
L K Bennett, a brand favoured by the Duchess of Cambridge, collapsed into administration on Thursday, while fashion retailer Quiz (QUIZ.L) warned that sales across its UK stores and concessions had tumbled 11.1% between 1 January and 28 February.
£3.3bn takeover for RPC
US firm Berry Global Group has secured the backing of RPC to take over the British plastic packaging maker in a £3.3bn deal.
This comes as RPC withdraws a previous recommendation that shareholders accept a rival bid from Apollo. RPC has opted for Berry’s 793p per share deal versus Apollo’s 782p offer.
“The combination of RPC and Berry would create a leading global plastics products design and engineering company and represents a strong strategic fit. Both companies are highly complementary in terms of product portfolio, customer base, polymer conversion technologies, and geographic footprint,” RPC chairman Jamie Pike said.
“This transformational combination will create a strong global leader in plastic packaging and recycled solutions that enhances our organic and inorganic growth opportunities moving forward,” Berry boss Tom Salmon said.
European markets
European stock markets were lower after a downbeat verdict on European growth from the ECB on Thursday, poor data from China and Germany, and a session in the red for Asian markets.
“Chinese exports saw their biggest fall in three years in February amid the trade war with the US,” Russ Mould, investment director at AJ Bell, said in an email. “And German industrial orders fell by their steepest amount in seven months in January.
“It is understandable why investors have been so worried about the outlook for global growth when you see figures like these.”
Britain’s FTSE 100 (^FTSE) was down by 0.6%, Germany’s DAX (^GDAXI) was 0.6% lower, France’s CAC 40 (^FCHI) was off by 0.5%, and the Euronext 100 (^N100) was 0.6% lower.
Japan’s Nikkei 225 (^N225) closed down 2%, Hong Kong’s Hang Seng index (^HSI) was 1.9% lower, and China’s benchmark Shanghai Composite (000001.SS) fell by 4.4%.
What to expect in the US
US stock futures were pointing to a lower open. S&P 500 futures (ES=F) were down by 0.3%, Dow Jones Industrial Average futures (YM=F) were 0.2% lower, and Nasdaq futures (NQ=F) were 0.4% lower.
