Market Tracker weekly bulletin – 12th October 2018

Market Tracker weekly bulletin – 12th October 2018

A round up of key developments in corporate transactions covered by Lexis®PSL Market Tracker this week.



Comcast/Sky update

Sky plc (Sky) shareholders have finally reached the end of the bid for Sky between Comcast Corporation (Comcast) and Twenty-First Century Fox Inc. (Fox). The auction established by the Takeover Panel on 20 September 2018 had put an end to any further delays caused by both bids which resulted in Comcast being the ultimate bidder. Subsequently, Fox announced that it intended to sell its shareholding of 39% in Sky to Comcast and let its offer lapse.

Following the results of the auction, Comcast acquired more than a 30% shareholding of Sky through market purchases at a price of £17.28 per share. Comcast’s acquisition of the 30% interests or voting rights in Sky shares prompted its offer to be a recommended mandatory offer pursuant to Rule 9 of the Takeover Code.

On 4 October 2018, Comcast acquired Fox’s 39.12% share. Fox’s offer lapsed on 6 October 2018, after receiving acceptances of 0.05% of the issued share capital in Sky. Comcast announced on 9 October 2018, that its mandatory offer was wholly unconditional with Comcast holding 76.84% (which also included Fox’s acquired shareholding) of Sky’s issued share capital.

Equity Capital Markets

Eurotorg Holdings

Eurotorg Holdings, the Belarusian food retailer, announced its intention to list on the LSE’s Main Market on 4 October, making it the first Belarusian company with plans to list internationally. Eurotorg is Belarus’ largest grocery chain, owning 19% of the food market in Belarus. The company confirmed its intention to list on the LSE on 10 October 2018 and outlined the structure of the offer. The offer consists of Global Depository Receipts representing interests in ordinary shares in the company, and the total offer size is expected to total £227 million.

Latest developments

Mandatory ethnicity pay reporting

On 11 October the Department for Business, Energy & Industrial Strategy (along with the Race Disparity Unit) launched a consultation on ethnicity pay reporting by employers. The consultation sets out various options and asks questions on what ethnicity pay information should be reported by employers to generate meaningful action, who should be expected to report and next steps.

The foreword to the paper is clear about the aims of the consultation:

‘Reporting ethnicity pay information enables employers to identify – and then tackle – barriers to creating a truly diverse workforce. If there is a consistent approach to reporting, they can also benchmark and measure their progress by comparing themselves to other employers and learn from them.’

The initiative dates to 2016 when the government asked Baroness McGregor-Smith to examine the barriers faced by people from ethnic minorities in the workplace and consider what could be done to address them. Her 2017 report Race in the Workplace sets out a range of actions for business and the government to take forward to help improve employment and career prospects for those from ethnic minority backgrounds. According to the report, equal participation and progression across ethnicities could be worth an additional £24bn to the UK’s economy per year.

Findings published today show that limited progress has been made across the McGregor-Smith recommendations. On ethnicity pay reporting, just 11% of employees reported that their organisations collect data on ethnicity pay.

Questions asked by the consultation include what type of ethnicity pay information should be reported, what size of employer (or employee threshold) should be within scope for mandatory reporting, and whether an employer that identifies pay disparities should be required to publish an action plan for addressing those disparities.

Responses to the consultation should be submitted by 11 January 2019 at 11:45pm, either online at: or via email to:

ICSA poll reveals concerns about practicalities of workers on boards

The Governance Institute and recruitment specialist The Core Partnership, has found that 70% of companies feel that having workers on boards would not be a good idea, following the new recommendation in the 2018 UK Corporate Governance Code (UKGC) which recommends including workers on boards, so companies can hear the ‘workforce voice into the boardroom’.

Issues highlighted include that it would be ‘extremely difficult’ to achieve fair representation of a global workforce from the appointment of one representative. For more on this story, please see our news analysis in Lexis®PSL Corporate.

In focus: Cancelled IPOs in 2018

Market conditions continue to affect IPO activity

Several companies have cancelled or postponed plans to list on either AIM or the Main Market of the London Stock Exchange since the start of 2018, with announcements suggesting that IPO activity continues to experience the volatility we reported in 2017. (For more detail on 2017 activity, see our news analysis: Uncertain market conditions lead to pulled IPOs in November – (subscription required).

The Market Tracker team has reviewed the cancelled transactions within the scope of our coverage. Companies are under no obligation to cite detailed reasons for the postponement of proposed listings. However, it is worth noting that most of the companies that have cancelled or postponed their IPO during this year have cited ‘challenging market conditions’ as a factor behind the decision not to list.

Global Diversified Infrastructure plc issued a prospectus on 1 March, in relation to an IPO for a target issue of more than 200 million shares, at 100 pence per ordinary share. On 22 March the company extended the timetable of the IPO, stating that they had received a positive response and were ‘keen to allow such investors the opportunity to participate in the Issue to the fullest extent practicable and, accordingly, the Directors have decided to extend the closing date’. However, on 16 April, the company announced that they had cancelled the IPO, stating that ‘current market conditions represent a challenging background in which to raise equity capital’.

On 2 March, African mobile phone mast firm Helios Towers announced its plans to list on the Main Market of the London Stock Exchange, with a share price valuing the company at around £2 billion. On 14 March, the company released a statement stating that ‘shareholders have decided not to proceed with an initial public offering of the company’s shares at the current time’. The company offered no further explanation as to why they had decided against listing. The company has since gone on to invest overseas, in the Democratic Republic of Congo’s mobile infrastructure industry.

Fundamentum Supported Housing REIT (Fundamentum), the trust specialising in social housing investments, announced their intention to list on the Main Market on 10 April. The company were targeting a £150 million raise, with shares priced at £1.00 each. The company released a statement on 20 June, stating that ‘the current market backdrop has created challenging conditions in which to raise equity capital’.

Fundamentum were not the only social housing investment trust to cancel their IPO plans. On 30 April, Horizon Housing REIT initially announced an intention to list on the Main Market and raise gross proceeds totalling £113 million. However, on 29 May the company announced that ‘current market conditions represent a challenging background in which to raise equity capital, and the level of confirmed orders for the Issue has been insufficient to meet the minimum fund raise requirement’.

On 23 April, British vaping liquids manufacturer and battery distributor Supreme plc announced their decision to list on AIM. Supreme creates 3 million bottles of vaping liquid every month and vaping hardware products as well as batteries and lighting goods. The company targeted a £150 million valuation and was looking to raise £10m in capital through the listing. Chief executive Sandy Chadha, who holds 100% of the company had also planned to sell shares in the company as part of the IPO. However, the company postponed the proposed IPO due to ‘market conditions’.

Utilico Global Income plc announced the publication of a prospectus on 22 May, to launch a new investment trust. Admission to trading was expected on 22 June, however the company released a statement on 15 June that ‘although the company had received positive interest from investors, in light of market conditions and uncertainties and the consequent impact on the level of demand, the company will not be proceeding with the proposed launch at this time’.

Market conditions have been suggested as a possible reason for the disappointing performance of two of this year’s most talked about IPOs. Aston Martin and Funding Circle Holdings both experienced a fall in share price following admission to trading. Similarly, asset manager Mobius Capital Partners announced a target of £200m for its October float but only raised £100m in gross proceeds upon listing. It is possible that this recent poor performance will impact the IPO market. There has been speculation this week that Vannin Capital Holdings have pulled their plans to list on the London Stock Exchange, which was due to list later this month.

The combination of Aston Martin and Funding Circle’s poor performances upon listing, along with the cancellation of the proposed listing by Vannin Capital suggests a decline in current IPO conditions and a potentially unstable market ahead. Market Tracker will continue to monitor wider market conditions.

Related Articles:
Latest Articles:
About the author:
Jenisa is Head of Market Insights for Lexis®PSL, with responsibility for the delivery of Market Tracker, a transaction analysis product that sits within Lexis®PSL Corporate. She has over 15 years of legal publishing experience, with a focus on researching and reporting on trends and developments in the corporate and commercial legal market. Previous roles include content developer for Lexis®PSL, Legal Podcaster at Informa, and Research Editor at Practical Law Company where she specialised in reporting on cross-border corporate and commercial developments from the firm’s New York office.