Bank of England interest rates decision and Daily Mail bid set

Central banks are in the spotlight on Thursday with the Bank of England sharing the spotlight with the European Central Bank and Swiss National Bank.

While the BoE is the only one where the market is even sniffing a potential rate hike, with virus cases rising and Downing Street instituting ‘Plan B’ measures to restrict gatherings, analyst Marshall Gittler at BDSwiss said “it just wouldn’t do for the Bank to pile on the pressure right now” with even a small interest rate hike.

The Plan B work-from-home guidance will deal yet another blow to central city businesses and weaken the already-softening growth.

But doing nothing will again require some nerve from the Monetary Policy Committee as the ONS revealed on Wednesday that UK inflation jumped to 5.1% in the year to November.

That is the highest rate of increase since 2011 and an army of City scribblers are calling for rates to go up, but the Bank might have a point when it says one-off factors, such as the petrol crisis, and Covid-19 distortions are playing a part.

It will be a tight call, whatever the decision. 

Daily Mail

Another decision going down to the wire is the offer to take the Daily Mail private by controlling shareholder, the Rothermere family.

In theory, this should have been plain sailing given the near 34% of the shares held by RCL, the Rothermere’s vehicle, but it has not been the case.

With just over 24 hours to go RCL had received acceptances, irrevocable undertakings, and letters of intent to accept from investors speaking for 45.1% of all DMGT shares.

This means a further 4.9% of investors need to accept the proposed offer by tomorrow for RCL to attain its minimum 50% level.

One of DMGT’s big investors has already indicated the offer is not good enough.

Majedie Asset Management, with a 4.5% stake, said publicly that even RCL’s revised offer was too low and urged other shareholders not to accept it.

A final offer, increased by 6% to 270p per share from the previous 255p, was announced on 2 December.

While the odds still look in RCL’s favour to get over the 50% line, having a big minority of disgruntled institutional shareholders presumably was not the aim when the plan was first mooted.

DMGT shareholders have until 1pm GMT on 16 December to accept or reject the new offer.

RCL has said that if the offer is not approved a planned special dividend will be scrapped.

Petrofac

Fabrication giant Petrofac will be glad to get back to talking about trading again after its £77mln fine in October for bribery misdemeanours involving several Middle East contracts.

Payment of the penalty “draws a line under a regrettable period of our history,” Petrofac said after the event.

Commodity prices, expectations for oil and gas spending, and the implications of the emerging ‘energy transition’ will all be among the more prosaic talking points in its…