The “Bakka brothers” have returned and also the City is able to welcome all of them with open arms. You most likely haven’t heard about Lydur and Agust Gudmundsson however in their homeland the siblings are well known for his or her part in pushing the nation towards the edge of monetary ruin.
The happy couple were among a number of “Viking oligarch” trailblazers from Iceland who made waves overseas throughout the country’s remarkable debt-fuelled boom, snapping up foreign assets in a ferocious rate.
Once the music abruptly stopped in 2008 and Iceland imploded, the siblings also came unstuck. These were the co-founders of Exista, that was the greatest shareholder in unsuccessful loan provider Kaupthing. Lýdur was delivered to prison and Agúst was sued by investors staying with you.
Both had assets grabbed however they were able to cling onto Bakkavor, a huge supplier of ready meals to the kind of Tesco, Waitrose, Marks & Spencer and Sainsbury’s.
Now, the siblings are plotting their return having a £1.5bn float of the organization working in london. Very good news for that Square Mile, that has been struggling with a dearth of recent share issues stretching back many years now. There’s been instant IPO activity in recent days and, among all of the uncertainty of Brexit, it’s hugely reassuring the United kingdom hasn’t lost its allure overseas.
Credit: Toby Melville
Yet there’s something slightly troubling about London’s apparent readiness to support individuals with under exemplary records. The main city has always prided itself like a place that demands companies meet especially high standards.
Rather than just a location to purchase and sell shares, the London stock exchange should be a bastion of strong corporate governance and possession legal rights which help to safeguard investors. But because the world’s big stock markets have grown to be involved in an more and more fierce fight for global dominance, it seems like the bar keeps being decreased, frequently with disastrous effects.
The unravelling of Kazakhstan mining giant Eurasian Natural Sources Corporation and it is Indonesian rival, Bumi, left shareholders nursing huge losses. Both were attributed to the influence of company insiders and controlling shareholders but, getting tightened the guidelines, standards turn to be sliding again. Just take a look at how regulators go from their way to really make it simpler for Saudi Aramco to list out working in london. It transmits the incorrect message.
The “Bakka brothers” have built a remarkable business empire but they’ve created a trail of destruction by doing this. Their penchant for debt almost sank Bakkavor in 2012, but bondholders saved the organization via a questionable debt-for-equity swap that left a lot of Iceland’s pension funds and banks because the proprietors. They rapidly got it back and also have skilfully switched it around. Debts are now in check and Bakkavor is perhaps the main player within the ready meals market.
Yet given their highly chequered past, does which make them appropriate custodians of the openly listed company? Regulators and exchange officials ought to be poring throughout this, demanding guarantees that London’s integrity is going to be upheld. Rather, the red carpet will likely be folded by helping cover their customary ease.
P&G shows laudable resolve
Nelson Peltz is getting none from it. Failure to win a seat around the board of consumer products Goliath Procter & Gamble isn’t a defeat, the veteran investor insists, but is “as near to a defunct heat as possible find”.
Try telling that to P&G, which just spent £100m fighting off Peltz’s demands, or other big corporate for instance. In boardrooms all over the world, this is seen as an significant victory within the growing fight against activist investors.
Make no mistake about this, it was a fierce fight that no side desired to lose. Peltz’s Trian Partners bet $3.5bn (£2.7bn) – roughly one fourth of their fund – creating a stake in P&G, along with a further £60m on advisors and shareholder mailings, inside a bid to win the biggest proxy war America has seen.
And even though Peltz loves to consider themself less confrontational than his big rivals, that didn’t stop him blasting P&G’s brass as “insular” and fiddly when confronted with lacklustre growth, or claiming the 180-year-old company had “lost its soul”.
Peltz is not likely disappear but other big companies be emboldened with this symbolic victory. Where once most corporate giants appeared from the achieve of activists like Peltz, almost anybody is fair game today. Just consider the sleepy monsters which have been shaken using their slumber. Peltz alone went after DuPont, Whirlpool and PepsiCo recently. Having a stock exchange worth of $225bn, P&G was the biggest company ever in the future under attack.
Credit: Kareem Elgazzar
So far this season, activists have deployed $45bn, nearly two times that which was spent throughout the entire 2016, based on data from investment bank Lazard. Elliott, perhaps probably the most feared of all of the activists, looks to possess made the decision that the majority of the FTSE is really a potential target. Despite a continuing fight with BHP Billiton, it’s apparently stakebuilding in Cruz & Nephew. Activists have a vital role to experience in holding under-performing companies to account. However, many adopt a get-wealthy-quick approach that puts cost-cutting in front of value creation.
Most firms is going to be afraid in the prospect but P&G has shown that the fiercest assaults could be repelled.