Markets Defused is an easy-to-understand and straightforward recap of the day’s most engaging business and stock market news.
- Hargreaves Lansdown sale agreed at £5.4 billion
- Revolution Bars rallied as restructuring received greenlight
- Rocket Lab propelled higher by expectation beating financials
- Paramount investors cheered first streaming profit
Hargreaves Lansdown sale agreed at £5.4 billion
Hargreaves Lansdown PLC (LSE:HL.) has agreed to a £5.4 billion takeover by a consortium of private equity firms.
Following weeks of negotiations and speculation, the stockbroker’s board and its cornerstone shareholders and namesakes Peter Hargreaves and Stephen Lansdown have agreed a deal to recommend to the wider shareholder base.
Private equity buyers – including CVC Capital, Nordic Capital, and funds owned by the Abu Dhabi Investment Authority – will pay £11.40 per share in the deal.
It represents a substantial premium, just over 50%, to the share price prior to the pre-offer level of around 740p.
Founders Peter Hargreaves and Stephen Lansdown are said to be pocketing more than £800 million in proceeds – with the former expected to retain half of his holding in the financial services firm.
In a market that’s increasingly digital, with most customers dealing themselves online, and recently saw the entry of Robinhood, the popular American retail trading app, the new private equity owners will prioritise investment in technology.
Revolution Bars rallied as restructuring received greenlight
Revolution Bars Group PLC (AIM:RBG) shares closed Thursday’s session, rising 13.5% to 1.25p, after the firm’s restructuring plan obtained the approval of the High Court.
It means that ‘Revs’, the British vodka bar chain launched in Manchester in the late nineties and subsequently expanded across the UK’s bar-streets, will be allowed to rework its debt arrangements with its bankers.
Whilst the group’s route to revival is now in play, the restructuring will see a major phase of cost-cutting that will result in job losses.
Revolution intends to close 25 bars around the UK, across both the vodka bar and Revolución de Cuba rum bar brands. At sites it retains the company intends to reduce its rents.
The company had expected to run out of cash this month, had the plan been denied. It now expects to generate £3.8 million per year of additional earnings from its actions.
Restructuring was deemed to be the preferred option for key stakeholders, after a review that considered breaking up and selling of its assets.
Rocket Lab propelled higher by expectation beating financials
Rocket Lab (Rocket Lab USA Inc (NASDAQ:RKLB)) shares rose 13.5% in Friday’s trading session, up to $5.42, after the launching company reported a 71% increase in revenue for its second quarter, totalling $106 million.
It exceeded Wall Street's expectations, pitched slightly lower, at $105.5 million.
Similarly, at $0.08 Rocker Lab’s loss per share was better than the forecast of $0.10.
The company, which recently tested its new Archimedes rocket engine and is developing its next rocket, Neutron, told investors that it signed 17 new launch contracts and made significant progress on the development of the Neutron rocket’s flight hardware.
Paramount investors cheered first streaming profit
Paramount Global (NASDAQ:PARA) stock was up 2%, at $10.42 on Friday, after the media conglomerate revealed upcoming changes that will see it axe 2,000 employees, which is around 15% of its staff.
The job cuts are expected in marketing, communications, finance, legal, technology, and other support functions.
It comes as Paramount, which is to merge with Skydance Media, seeks to cut costs by $500 million.
Paramount meanwhile wrote off a $5.98 billion impairment charge against cable networks, the latest signpost in the troubles and decline the traditional TV market – echoing the week’s earlier $9.1 billion write-down over at Warner Bros Discovery.
In its streaming business, meanwhile, Paramount saw a profit of $26 million for the second quarter, its first profitable quarter for unit.
Group revenue was down 11% to $6.8 billion, short of Wall Street forecasts of $7.21 billion.
Earnings on a per share was reported at 54 cents which was much higher than analysts feared, with a consensus prediction of 12 cents.