MARKET REPORT: Daily Mirror owner Reach takes a big hit as it faces a potential battle with the UK’s pension watchdog
Newspaper owner Reach took a big hit as it faced a potential battle with the UK’s pension watchdog.
It fell 5.4 per cent, or 15p, to 263p after it emerged the company, whose titles include the Daily Mirror, Express, and Star, refused demands from the pension scheme’s trustee to pay in more and cut a large deficit, which was just under £119m on June 27.
As a result of the stalemate, the trustee said in a letter to members last week that it had requested the regulator step in.
Hitting the headlines: Reach refused demands from the pension scheme’s trustee to pay in more and cut a large deficit, which was just under £119m on June 27
It came after a lengthy negotiation between Reach and the trustee failed to meet a legal deadline at the end of March due to delays caused by the pandemic.
The trustee, which manages assets of over £1billion, believes the company can ‘easily afford’ the proposed increase in contributions but Reach rejected these suggestions and had not ‘sufficiently addressed’ concerns.
The tensions come as Reach boss Jim Mullen tries to reverse the decline by pouring money into digital publishing and cutting newspaper printing costs.
The dispute also threatens to bring back memories of former owner Robert Maxwell, who 30 years ago plundered the pension fund for hundreds of millions of pounds. Following Maxwell’s death in 1991, members of the pension scheme faced years of wrangling to get compensation.
The FTSE 100 was up 0.4 per cent, or 31.68 points, at 7373.34 while the FTSE 250 rose 0.8 per cent, or 185.98 points, to 23,266.75.
Signs that the Omicron variant may be milder than its Delta predecessor provided some festive cheer. ‘A more infectious but a less dangerous variant has the potential to eventually bring the pandemic to an end as herd immunity could be reached…without overwhelming hospital systems’ said analysts at Danske Bank. ‘A scenario like this would imply less need for severe restrictions and more normal economic activity’.
But it wasn’t all good news as a couple of stocks turned red as they went ex-dividend.
Russian steel firm Evraz, partly controlled by Chelsea football club owner Roman Abramovich, dropped 0.1 per cent, or 0.6p, to 600.8p while British American Tobacco dipped 0.02 per cent, or 0.6p to 2745.5p.
Miner BHP scrapped a support agreement with Canadian Noront Resources after the FTSE 100 firm pulled out of a race to acquire the nickel miner last week, when rival Wyloo Metals made a last-minute bid for the firm worth £359m, higher than BHP’s offer of £244m.
Noront will pay BHP £10.3m in fees for terminating the deal, which will be covered by a £17.1m loan from Wyloo. BHP crept up 1 per cent, or 22p, to 2206.5p. Irish healthcare firm Uniphar jumped 3.1 per cent, or 12p, to 394p after a trio of acquisitions for an undisclosed sum. It has purchased UK pharmaceutical marketing agency E4H, drugs distributor Devonshire Healthcare Services and Irish pharma service firm Navi Group. The acquisitions have combined revenues of £33m.
Care home owner Impact Healthcare also added to its portfolio, nabbing three sites for £14.3m, and investing in 12 more homes in Scotland in a deal worth up to £40m. The shares inched up 0.2 per cent, or 0.2p, to 118p.
Despite being so close to Christmas there were late arrivals on the market, with clean power firm Libertine Holdings making its debut on AIM after raising £9m through a fundraising.
The shares ended their first day at 30p, 50 per cent higher than their listing price of 20p. Car interior designer CT Automotive had its first day on the junior market after raising £33.6m to repay debts.
It closed at 160p, up 13p from the float price of 147p.