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Retail round up – The Sunday Papers

Sir David Jones in Mike Ashley loan row, Pets At Home owners planning Stock Market flotation, M&S succession battle rumbles on, Tesco suffers investors’ share option scheme protest, T-Mobile takeover deal will face tough scrutiny...

SUNDAY PAPERS

Retail round up – The Sunday Papers

The Sunday Times

Sir David Jones, the chief executive of JJB Sports, is embroiled in an extraordinary row over revelations he borrowed 1.5m from billionaire Mike Ashley, the boss of rival sportswear chain Sports Direct and owner of Newcastle United. The Sunday Times has obtained a letter sent by Ashley to Jones in February, in which he says the cash was sent to Jones's account at HSBC in October 2007. The letter alleges the loan was made after Chris Ronnie, the former boss of JJB, approached Ashley to say that Jones was encountering temporary personal financial difficulties. JJB and Sports Direct are not only rivals but have a close commercial relationship involving the trading of stock. The personal loan raises questions of possible conflicts of interest.

The UK's biggest retailer of pet products is planning to cash in on our love of animals with a 700m stock market flotation. Pets at Home's sales have risen by 7.5% this year despite the recession. Bridgepoint, the private-equity owner of the chain, has held talks with Goldman Sachs, JP Morgan Cazenove, NM Rothschild and Bank of America

Merrill Lynch in the past two weeks about the timing, valuation and investor appetite for a float. If Bridgepoint proceeds with a listing, it could yield hundreds of millions of pounds in profit for its investors. The private equity group bought the chain for 230m in 2004 but it has been refinanced four times since, generating more than 120m in cash for its investors already. Pets at Home has enjoyed bumper results, with pre-tax profits rising by 29% to nearly 40m.

Marks & Spencer is headed for a bloody battle with investors on Wednesday after it emerged that the high-street bellwether plans to ignore a big protest vote demanding the appointment of an independent chairman by July 2010 to check the power of boss Sir Stuart Rose. It is understood that M&S plans to thumb its nose at shareholder concerns by insisting that a resolution put forward by the Local Authority Pension Fund Forum (LAPFF) to end Rose's controversial tenure as chairman and chief executive is merely an “advisory” vote that does not need to be acted upon. The group is bracing itself for up to half its shareholders either voting in favour of the resolution, or withholding their support through abstention.

Vodafone has discussed offering its struggling Turkish subsidiary in part-exchange for T-Mobile UK, which is expected to be sold later this year by Deutsche Telekom. The German phone group is this weekend considering approaches from Vodafone, O2 and Orange, who are all keen to consolidate their position in Britain's highly-competitive mobile market. Sources said there was “no rush” to decide the future of T-Mobile, the No4 operator with 14% of mobile revenues, which has appointed investment bank JP Morgan to consider its options. Vodafone chief executive Vittorio Colao is keen to trade assets rather than spend heavily like his predecessors. The company paid 2.6 billion to enter Turkey in 2006 but has written down its investment after losing ground to the market leader. It could contribute up to half the value in a 3 billion deal for T-Mobile.

Sunday Telegraph

The body that represents Marks & Spencer's 200,000 private shareholders could throw its weight behind a special resolution demanding that M&S finds an independent chairman to replace Sir Stuart Rose by next summer. Roger Lawson, a director at the UK Shareholders' Association (UKSA), said that the body "might well support" the resolution that is being put to shareholders at M&S's annual shareholder meeting on Wednesday. The backing of M&S's private shareholders - who account for around a fifth of the chain's ownership - could be crucial to the resolution being passed. The special resolution has been brought by the Local Authority Pension Fund Forum (LAPFF), which represents 48 local authority schemes with 95bn in assets. The resolution calls on the M&S board to appoint an independent chairman at M&S by July 2010, a year earlier than planned. Sir Stuart is currently both chief executive and executive chairman.

Billionaire investors Dermot Desmond, the Irishman who owns about 37pc of Celtic football club, and Len Blavatnik, the Russian oligarch who has investments in a string of media companies through his Access Media vehicle, have invested 750,000 in a new internet start-up design to profit from celebrities. The pair are the lead investors in theNOD.com, a website that helps fans track down clothes, jewellery and other products favoured by their favourite celebrities. The website, which launched last week, employs a team of people to track the purchases celebrities so that fans can buy the same clothes, wear the same jewellery and even go on the same holidays. Visitors to the site can click to buy the products and services via partners including Net-a-Porter, Amazon, Boots, and British Airways.

Financial Times Sat / Sun

Tesco on Friday became the latest company to feel investors' ire over pay, suffering a big protest vote over changes to its share option scheme. Of the votes recorded on the scheme at the annual meeting of Britain's biggest retailer, 41 per cent were against it. That was the biggest protest against a share plan put forward by a FTSE 100 company this year and, according to some, the largest for a dozen years or more. The revolt follows a series of escalating protests by shareholders over executive remuneration this year. This week, 40 per cent of investors in Home Retail did not approve the group's remuneration report in a protest at planned changes to a bonus scheme.

Punch Taverns has narrowly survived a protest vote against its plans to raise 375m in a share sale. The pub operator, which launched the cash call last month to repair its debt-laden balance sheet, needed at least 75 per cent of shareholders who voted to approve the fundraising. Yesterday Punch said that 75.1 per cent of votes cast were in favour of the share placing. Greenlight Capital and QVT Financial were among those who voted against the plan. The two US hedge funds, which hold a combined stake of 13 per cent in the company, are said to have wanted Punch to launch a smaller, less dilutive share issue. Under the structure of the proposed placing, existing shareholders would end up owning only 42 per cent of Punch.

Independent on Sunday

Marks & Spencer has asked for the corporate governance code to clarify its rules on a chief executive becoming chairman - the key issue on which it faces a shareholder revolt this week. The retailer, where Sir Stuart Rose holds both positions, is also asking for the code to give better guidance on succession planning, amid criticism that he has failed to identify his successors. Rebel shareholders have added a resolution to the agenda Wednesday's annual meeting calling on Sir Stuart to bring forward by 12 months to next July the date when an independent chairman will be appointed. The board is urging investors to oppose the resolution. The company secretary, Graham Oakley, says: "They urge this without consideration as to whether this would prompt his departure from the board entirely, also forcing early appointment of a new chief executive".

The Mail on Sunday

Telecoms regulator Ofcom is warning potential bidders for T-Mobile that any takeover deal will face the toughest scrutiny, amid fears that it would lead to a sharp increase in prices for consumers. The UK's leading mobile phone operators, Vodafone and O2, are seen as potential bidders for T-Mobile after owner Deutsche Telekom put the 3billion business up for review. There are five major mobile phone operators in the UK, while most other European countries have just four. Mobile phone executives cite this as a reason why they think competition watchdogs could look kindly on the acquisition of T-Mobile by a UK rival.

A damning report into retailer JJB Sports by its closest financial advisers shows they were stunned by a catalogue of bizarre decisions, mismanagement and lack of control over senior executives. In an analysis by its auditor, Deloitte, submitted last September and seen by Financial Mail, serious doubts are raised about some of the firm's working practices. There were also a string of warnings from suppliers, company advisers and shareholders. Management and the company's non-executive directors were told that they were failing in their duties to shareholders as well as the company's 10,000 employees and their families.

Marks and Spencer chairman and chief executive Sir Stuart Rose will stamp his authority on the business at its annual meeting on Wednesday by approving the internal candidates seeking to replace him. Finance chief Ian Dyson, head of food John Dixon and clothing boss Kate Bostock are the preferred candidates to take over as chief executive next year, despite pressure from some shareholders to begin an external search.

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