MARKET REPORT: Bill Gates in the money as private equity giant Blackstone makes a move on Signature Aviation
Bill Gates was among the investors sitting pretty yesterday after private equity giant Blackstone made a move on Signature Aviation. Shares rocketed 40 per cent higher after Steve Schwarzman’s Blackstone made a £3billion offer to buy the company.
The private jet services group – previously known as BBA Aviation – is one of the lesser-known firms on the FTSE 250 index.
But it caught the eye of the Microsoft billionaire back in 2009 after the financial crisis.
On board: Signature Aviation shares rocketed 40 per cent after Blackstone made a £3bn offer. The private jet services group caught the eye of Microsoft billionaire Bill Gates back in 2009
And the 65-year-old, whose fortune tops £65billion, has used this year’s Covid chaos to snap up even more stock.
He has now built up a 19.2 per cent stake through his investment vehicle Cascade Investments.
That holding rocketed in value by £170million yesterday and is now worth around £600million after Blackstone offered to pay 383p per share, at a 42 per cent premium to the price before the offer was revealed.
No firm bid has been placed yet – but the likelihood is that Signature will be on the radar for lots of companies looking for a pandemic bargain.
Private jet businesses are some of the only aviation firms that have thrived during the pandemic as the super wealthy have turned to them more and more to go on holidays and business trips as normal travel has come to a virtual standstill.
Signature shares closed up 40.1 per cent, or 107.4p, to 375.4p, as it became the latest London-listed target for US private equity firms.
Investors cheered as advertising giant WPP laid out ambitious expansion plans and bullish forecasts.
The world’s biggest ad firm reckons sales will rebound to 2019 levels by 2022 after the pandemic shifted daily life online for most people and businesses.
WPP said this had helped speed up its shift towards ecommerce and technology work.
Sales at the owner of the Ogilvy, Grey and Group M agencies will fall by around 8 per cent in total this year after companies slashed their marketing budgets for several months.
But the group has still won £4.1billion of work from the likes of Alibaba, Intel and Uber.
And it believes sales will return to growth in 2021.
Boss Mark Read, who has been in the driving seat for two years, is planning to cut costs by £600million.
But another key pillar of his strategy will be to splash up to £400million a year buying up tech companies.
Under the leadership of former boss Martin Sorrell, WPP was a takeover machine – regularly bolting on smaller companies.
Read’s decision takes it back in that direction – but his pledge to buy ‘targeted, scalable’ firms suggests he is not looking to reverse the strategy to shrink and simplify the business up until now.
One of his boldest moves was to sell off a 60 per cent stake in market research group Kantar.
And WPP gave investors more good news yesterday by announcing that it plans to restart share buybacks next year – in a move which will hand back cash from the Kantar sale to investors.
With that and the added promise of increasing its annual dividend, WPP went straight to the top of the FTSE 100 leaderboard, rising 4.2 per cent, or 32.8p, to 815p. But the wider Footsie slid into the red – falling 0.3 per cent, down 19.85 points, to close at 6551.06, as a strong pound weighed on the index’s exporter-heavy stocks.
The FTSE 250, on the other hand, rose for the fourth day in a row – adding 1 per cent, or 199.48 points, to 20296.04 points – as hopes grew that the UK and EU will strike a Brexit deal.
Electronics group Dixons Carphone surged again, a day after it reported a rise in profits, with shares up 4.3 per cent, or 5.2p, to 127.2p at last night’s close.