Inside Track: My top tip for 2014: Deutsche Post will buy Royal Mail
19 December 2013 12:56am
IT wouldn’t be the final column of a calendar year without some predictions for the next 12 months. Here are my top three:
Royal Mail will complete a journey from being wholly-owned by the UK state to wholly-owned by a German enterprise within little more than 12 months.
Deutsche Post won’t get it delivered cheap, mind you. Royal Mail’s shares have close to doubled since being sold by the government in a deal valuing it at £3.3bn, and any buyer will have to pay a significant premium to the prevailing share price.
That might mean a windfall for taxpayers’ remaining 30 per cent stake in Royal Mail, but it could also trigger a pre-election controversy about the foreign takeover of one of the UK’s best-known companies.
Next year will be one of change for Britain’s biggest retailers. Justin King will finally hand over the reins at Sainsbury’s having delivered a decade of growth and a turnaround in fortunes.
But at Marks & Spencer, Tesco and Wm Morrison, the chief executives will be nervously watching over their shoulders for any sign of a shareholder revolt over sluggish performance.
By the end of 2014, at least one of them will be gone.
It barely qualifies in the category of forecasting to say that 2014 will be another torrid year for banks, but the escalation of a global probe into foreign exchange manipulation will herald a new nadir for the industry’s reputation.
That, and other ongoing probes, will herald the denouement of Jamie Dimon’s long reign at JP Morgan.
TROUBLES AT STANCHART
It hasn’t been the best week for directors of Standard Chartered, the emerging markets lender.
For the last decade, it has generated enviable returns for investors, provoking resentful glances from some of its UK-focused peers.
So a recent profit warning provided an unwelcome jolt to shareholders who have also been alarmed by – unsubstantiated – talk of tensions between Sir John Peace, chairman, and chief executive Peter Sands over the need for a rights issue.
The wobbles do not end there. This week, it emerged that Standard Chartered had shifted responsibility for its risk function from Richard Meddings, finance director, to Mr Sands at the request of the Prudential Regulation Authority (PRA).
That should provide no personal reflection on Meddings but it does raise the question of why regulators perceive there to be a less pressing potential conflict when risk management functions are overseen by the chief executive.
People close to Standard Chartered say that frustrations with regulators do not end there.
Its board, they say, wants more clarity from the PRA about the level of top-quality capital that it is required to hold.
It also wants that guidance to be more explicit in order to provide investors with greater certainty.
That would be welcomed by Sir John, who said he would relinquish one of his trio of FTSE-100 chairmanships by stepping down at Experian.
There is still no successor in place but that, I’m told, will change early in the new year. Giving Peace a chance will be easier at Standard Chartered once that happens.
RACING POST IN PLAY
And they’re off. Bidders vying to buy about £180m of loans to the Racing Post are heading for the finish line this week, but they may not get the result they were looking for.
People close to the situation say that a lofty valuation of the loans by UBS means they may end up under the aegis of National Asset Management Agency (NAMA), the Irish government agency.
Expect that to spark a tussle for the ownership of the newspaper itself.
Mark Kleinman is the City editor of Sky News @MarkKleinmanSky