Weekly stock market round-up


Vodafone chief executive Sir Christopher Gent surprised the City this week by revealing plans to retire at the end of July 2003. He will be succeeded by Arun Sarin, little-known in this country but something of a telecoms big-hitter in the US. The change reflects the end of an era of dealmaking, and the start of one characterised by attention to detail and focus on execution.

Cadbury-Schweppes has confirmed it is to buy Adams, the American company that makes Trident chewing gum and Halls cough sweets. It’s paying Pfizer, the drugs company, $4.2bn for the business. It thinks that the purchase will give it more presence in the US and other markets, and believes it can run it better than a pharmaceuticals company. But it will be a long time before investors know whether the gamble has paid off – Adams won’t even cover the cost of its capital until 2006.

The Office of Fair Trading has cleared British Sky Broadcasting of anti-competitive behaviour after a long and expensive investigation. The verdict removes one of the major risks surrounding the company and should set the tills ringing.

Allders, the department store chain, has agreed a takeover by a consortium led by property company Minerva and including former Debenhams boss Terry Green. The price, 160p a share, looks fair. Investors in House of Fraser, however, are likely to have to wait until after Christmas for a bid.

Compass, the world’s largest catering group, has finally agreed to sell its Little Chef and Travelodge business to a private equity firm for £712m. The price is less than was initially hoped, and mirrors the price reduction Diageo had to take in order to sell its Burger King chain of fast-food restaurants.

Another shock for retailers this week when Game Group, which sells computer games, said sales were lagging last year’s and that profits would be the same as last year. Analysts had thought they would be around 30 per cent higher. The warning is particularly alarming because computer games was expected to be one of the few bright spots for retailers in this year’s festive season.

PizzaExpress is back on the menu as a bid target. An earlier 350p a share bid was dropped after being deemed too mean. Now, the company’s management team and at least one other bidder have expressed an interest. An independent committee of directors has been set up to scrutinise the offers, as is usual when the company’s own managers are involved.

National Express, the bus and train operator, has pulled out of Australia after persistent fare evasion hit its train and tram franchise there. The withdrawal will cost around £135m. The outlook for UK rail remains gloomy, although the bus and coach operations are performing well.

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