Cider maker swoops on Conviviality, WPP’s CEO under scrutiny and Entertainment One still enjoying Peppa Pig boost

“The 7,000 mark appears to be acting as a magnet for the FTSE 100, refusing to let the index stray too far from this level. The market on Wednesday takes a 0.4% step back to 7,005,” says AJ Bell Investment Director Russ Mould.

C&C

“Irish cider maker C&C has thrown its hat into the ring as a potential saviour for Conviviality’s distribution business, Matthew Clark Bibendum. The announcement implies it is a done deal, potentially completing later today.

“It’s an interesting move for C&C but perhaps not surprising given it has been trying to broaden its focus.

“Last year’s purchase of a 47% stake in Admiral Taverns gave C&C a foothold in the pubs sector in an effort to improve distribution of its products. The Conviviality deal would further strengthen its position in the distribution market.

“However, it is worth noting that C&C, which is best known for making Magners and Bulmers ciders and Tennent’s lager, has a patchy track record when it comes to making deals and generating value for its shareholders.

“For example, the purchase of US rival Vermont Hard Cider in 2012 for $305m caused a major hangover for C&C in the following years. Last year it reduced the carrying value of the Vermont business to a mere €45m ($55m).

“Shares in the business have fallen by 45% over the past five years compared to a 15% gain in the broader UK stock market, as represented by the FTSE All-Share index.”

WPP

“The position of chief executive of advertising giant WPP, Martin Sorrell, is under scrutiny amid an independent investigation into an allegation of personal misconduct.

“While the company says the allegations ‘do not involve amounts which are material to WPP’ it is hard to know what the company would look like under different leadership.

“Sorrell has been at the helm of the business since it was a wire shopping basket manufacturer called Wire and Plastic Products. He used the business as an acquisition vehicle and made his first really big splash with a $566m hostile takeover of New York based agency J. Walter Thompson in 1987.

“Even if this probe does not amount to anything, the company needs to confront the succession issue sooner rather than later given Sorrell turned 73 in February.”

Entertainment One

“Canadian TV and film rights business Entertainment One is being kept on the growth path by its family and television arms as the film division saw box office revenues fall 37% in the 12 months to 31 March.

“The Peppa Pig children’s series remains a big driver for the company as it performs well in mature markets like the UK and Australia and expands in newer geographies like China and Japan.

“Being too closely tied to one blockbuster franchise is a risk though, as investors in Harry Potter publisher Bloomsbury could attest. Bloomsbury traded close to £4 when Pottermania was at its height in the mid-noughties but now changes hands for just 176p.”

These articles are for information purposes only and are not a personal recommendation or advice.