Media Bites 10 August: Deliveroo/Delivery Hero, Morrisons, Vectura

Delivery Hero, the Berlin-based food delivery group, has built a 5% stake in Deliveroo, driving shares in its UK-based rival to their highest point since March’s initial public offering (The Financial Times £).

Shares in the London-listed food delivery company rose by as much as 10% to 360p in early trading on Monday after it announced the news (The Guardian).

Delivery Hero, which has not had a presence in the UK since its sold its Hungryhouse operation to what is now Just Eat Takeaway.com in early 2018, acquired the Deliveroo stake on Friday for an estimated price of about £284m (The Times £).

Delivery Hero said they ‘strongly’ believed in Deliveroo’s future potential (The Mail).

“At Deliveroo things could be about to get very messy after Delivery Hero launched a secret raid on its rival’s shares, emerging with a near-6pc stake in one fell swoop first thing Monday morning,” writes the chief City commentator in The Telegraph.

The battle for Morrisons continued today after the takeover panel extended the deadline for US private equity suitor Clayton Dubilier & Rice to make a firm offer for the supermarket (The Mail).

The UK’s Takeover Panel, which regulates takeover activity, said it had given CD&R until 5pm on 20 August to announce a firm intention to make an offer for Morrisons or walk away, known as a “put up or shut up” deadline, an extension of the previous 9 August deadline (The Guardian).

The move indicates that an extended bidding war for the company is likely: the panel typically grants extensions to bidders only if convinced they are serious about making a higher offer (The Financial Times £).

Clayton, Dubilier & Rice will start its fightback with a higher bid for Morrisons early next week, after the deadline to raise its offer was extended, according to The Mail. Insiders said it had the firepower to raise its bid and was preparing to enter the race next week with a higher offer and a fresh slate of pledges to protect the grocer’s legacy.

The Lex column in The Financial Times (£) adds that the tussle shows not only that UK assets are cheap but also the weight of funds has reduced private equity groups to scrapping over them. “Private equity is sitting on mountains of “dry powder” — $413bn in Europe alone, reckons Preqin — which they need to deploy,” the paper writes.

Alex Brummer in The Mail thunders that “spineless company bosses cower before the private equity bidding stampede” in reference to the Takeover Panel intervening yesterday in the Morrisons bidding and also the tussle between Carlyle and Philip Morris for Vectura.

The bidding war for Vectura is set to be decided by a rare auction process after the Takeover Panel intervened (The Times £).

The face-off aims to break a to-and-fro takeover battle that has seen the tobacco giant Philip Morris and The Carlyle Group put in multiple offers in a matter of weeks for the Chippenham-based business (The Mail).

Health charities and anti-smoking campaigners have voiced concern at the prospect of the asthma inhaler maker Vectura succumbing to a £1bn bid from tobacco company Philip Morris International, as the improved offer triggered a rare quickfire auction (The Guardian).

The Takeover Panel will oversee a series of daily sealed bids from suitors Carlyle and Philip Morris - the first auction since Sky was bought for £30bn by Comcast in 2018 (The Telegraph).

An analysis in The Times (£) examines the toll the bidding war between Carlyle and Philip Morris is taking on Vectura.

Business commentary in The Times (£) goes on to warn that “Vectura board can’t let ethics go up in smoke”.

Commentary in The Guardian says that the Vectura board needs to see through the smoke. “The asthma inhaler-making company can surely see that healthcare and tobacco don’t mix,” the paper writes.

McColl’s Retail Group has confirmed that it is considering a capital raise, prompting a sharp fall in its share price (The Times £).

Butternut Box, a dog food company set up by two former Goldman Sachs bankers, has raised £40m to fund expansion plans and capitalise on a huge rise in pet ownership during the pandemic (The Telegraph).

Sainsbury’s failed to warn cat owners that they might be giving their pets toxic food for a month because customers who had opted out of marketing emails were also excluded from alerts about a nationwide product recall (The Guardian).

Gino D’Acampo’s loss-making chain of upmarket Italian restaurants had to be rescued with a £12.9m bailout even before the Covid-19 pandemic hit (The Mail). The money was lent from a linked restaurant company owned by the celebrity chef’s co-investors, Iceland bosses Sir Malcolm Walker and Tarsem Dhaliwal.

Tesco Bank has had to stop customers from switching accounts after it became overwhelmed by a rush of current account holders trying to move banks before the supermarket closes all accounts in November (The Telegraph).

The removal of coronavirus restrictions boosted retail sales last month but growth has started to slow as consumers spent more in restaurants rather than shops, the latest BRC-KPMG retail sales figures showed (The Times £).

The end of lockdown has come too late to prevent fresh store closures on Britain’s high streets as businesses count the cost of 18 months of pandemic disruption, the latest update on consumer spending has shown (The Guardian).

Cargill and Continental Grain Company have jointly agreed to acquire Sanderson Farms, valuing the US poultry producer at $4.53bn at a time when demand for chicken meat has been soaring (The Financial Times £).