BUSINESS LIVE: National Grid to raise £7bn; Hargreaves Lansdown rejects takeover bid; Nationwide hands members £385m

Britain’s competition regulator is pressing ahead with a full market investigation into the veterinary sector amid concerns pet owners are being overcharged.

The Competition and Markets Authority on Thursday warned that UK vet groups could be forced to cap prescription fees, sell off parts of their business and give mandatory information to pet owners if the probe finds it necessary.

Almost a third of Britain’s 5,000 vet practices have been bought by six firms since 2013 – CVS Group, IVC, Linnaeus, Medivet, Pets at Home and VetPartners – according to the CMA.

A cautious US Federal Reserve and a slightly higher-than-expected UK inflation print this week has derailed some of the recent momentum that has driven the FTSE 100 to record highs this year.

But improving economic performance, easing inflation and expectations of looming interest rate cuts have reinvigorated interest in the FTSE 100, driving the index roughly 9.4 per cent higher since the start of 2024 to 8,479 last week.

Peel Hunt analysts Stuart Duncan and Robert Sage:

‘The attractions of HL include the 1.8m customers and market-leading proposition in the UK market.

‘We still see significant potential for the platform market to grow in the coming years, with estimates suggesting that the majority of assets are still held off-platform.

‘However, key to the outcome of this process are the founders, who still own 26% of the company today (of which Peter Hargreaves has c.20%).

‘We expect the shares to bounce today, given the level of short interest,which we estimate is at a highsingle-digit percentage of the company, and monitor the evolving situation over the next month.’

Adam Vettese, analyst at eToro:

‘Ordinarily a steady-eddie defensive stock, National Grid is where investors might seek to put cash they wish to shield from volatility or market uncertainty, which there has been plenty of in the last couple of years.

‘Today’s announcement of a $7bn capital raise via a rights issue as part of a wider £60bn 5-year plan is a huge step up in investment with the vast majority going into electricity networks.

‘Underlying operating profit was up 4% although some one-off exceptional charges contributed to EPS taking a hit, which perhaps backs up the case that this investment is needed to drive growth and deliver value for shareholders. The dividend is set to increase in line with policy despite this.

‘Understandably this and the dilution effect of the rights issue have led their share price to plunge 6.5% this morning. Will investors see this however as short-term pain for longer-term gain?’

Tesla sales have tumbled in Europe as demand stalls.

The US electric car maker, run by Elon Musk, sold 13,951 vehicles last month, according to the European Automobile Manufacturers’ Association – down by 2.3 per cent from last year and the worst total since January 2023.

National Grid plans to raise around £7billion from investors as it gears up for a £60billion investment in energy network infrastructure.

A fully underwritten rights issue of 1.09billion new shares, priced at 645p-a-piece, will equate to seven new shares for every 24 existing shares, National Grid said in a stock market statement on Thursday.

Chief executive John Pettigrew said the group will invest £60billion in the five years to the end of March 2029, which is nearly double its investment over the last five years.

London-listed stocks are treading water this morning as investors mull a new General Election campaign and await fresh economic data due later today. British equities opened flat on Thursday as Britain kicked off the election campaign for the July 4 vote, while investors focussed on more economic data later in the day to gauge the strength of the UK economy.

British Purchasing Managers’ Index (PMI) figures are due later in the day, capturing investor attention following Wednesday’s CPI data, which revealed a slower-than-anticipated easing in inflation.

National Grid has slumped 7.4 per cent after it said would raise about £7billion via a fully rights issue.

Rolls-Royce is down 1.8 per cent after the engineering company kept its annual forecast unchanged.

Wizz Air has jumped 5.9 per cent after the European low-cost airline forecast a higher annual profit.

Hargreaves Lansdown has surged 11.8 per cent after the investment platform rejected a £4.67billion takeover proposal.

Rival AJ Bell has gained 8 per cent after the investment platform reported its interim results.

Computer maker Raspberry Pi will float on the London stock exchange next month in a major boost for the City.

The Cambridge business, which sells computers to amateur coders and hobbyists, will issue shares in an initial public offering that could value it at £500million.

It has also agreed to sell £27million of shares to semiconductor designer Arm and up to £16million to investment manager Lansdowne Partners as part of the float.

Britain’s veterinary market will face a formal market investigation, after an initial review raised concerns about pricing and competition in the sector.

Concerns that pet owners might not be getting a good deal on veterinary services prompted the Competition and Markets Authority (CMA) to start looking last September into the vet market, which is estimated to be worth more than £2billion.

Sarah Cardell, Chief Executive of the CMA, said:

The message from our vets work so far has been loud and clear – many pet owners and professionals have concerns that need further investigation.We’ve heard from people who are struggling to pay vet bills, potentially overpaying for medicines and don’t always know the best treatment options available to them. We also remain concerned about the potential impact of sector consolidation and the incentives for large, integrated vet groups to act in ways which reduce consumer choice.

Bloomsbury Publishing chair Sir Richard Lambert will retire and step down from the board after seven years, and will be replaced by current independent non-exec director.

The succession plans were revealed as the publisher lifted full-year profit forecasts forecast after earnings soared 57 per cent on the back of robust demand for fantasy fiction titles, particularly by author Sarah J Maas.

The London-headquartered publisher of Harry Potter books posted a profit before taxation and highlighted items of £48.7million for the year to 29 February, up from last year’s profit of £31.1million.

Neil Shah, executive director at Edison Group:

‘National Grid’s results today showed a decline in profits by 15% to £3.05 billion, showing the difficulty as the company answers to the demand for energy transition while also answering the call for capital delivery. Disruptions in supply chains and ongoing discussions on policy measures cross UK and US have had significant impact on National Grid’s performance.

‘Renewable energy and investment into green capital investment was a huge focus, as National Grid delivered a year of record capital investment and reached a higher proportion of green capital investment at 78% of Group capital expenditure, marking £6billion of green capital investment.

‘All eyes are on National Grid’s announcement on its £60 billion energy transition investment plan over the next five years, along with its decision to sell Grain LNG, its UK LNG asset, and National Grid Renewables, its US onshore renewables business.

‘This clearly shows National Grid’s focus on the decarbonisation of energy system, while also working to deliver more jobs across both sides of the Atlantic. As pressure amounts to push for more renewable and sustainable solutions, it is natural that National Grid is pushing for additional investments.

‘Looking ahead, it seems National Grid is poised for additional growth as the effects of this long-term investment plan come into fruition.’

Takeover target Anglo American has agreed to enter talks with suitor BHP after rejecting the Australian miner’s latest £39billion offer.

The London-listed firm, whose empire includes De Beers diamonds and a potash mine in Yorkshire as well as vast copper and iron ore deposits, has given its larger rival another week to thrash out the terms of a deal.

It marked a significant concession by the Anglo board, which until recently had refused to engage with BHP, having rebuffed two earlier bids worth £31billion and £34billion.

Nationwide Building Society has announced it will pay out another ‘Fairer Share’ bonus this year.

Members will receive the payment directly into current accounts in June.

It comes as the mutual giant said its pre-tax profit was £1.77billon in the year to April, down from £2.2billion last year.

Britain’s biggest investment platform has become the latest London-listed company to be targeted by foreign bidders.

After the market closed last night, Hargreaves Lansdown said it had received two approaches from a consortium of buyers regarding a possible takeover.

The latest offer – worth 985p a share or £4.67billion – was unanimously rejected by the board ‘on the basis it substantially undervalues Hargreaves Lansdown and its future prospects’.

National Grid is hoping to raise £7billion to invest in energy network infrastructure, via a fully underwritten rights issue of 1.09 billion new shares.

The capital raise is by way of a fully underwritten rights issue at 645p per share on the basis of seven new shares for every 24 existing shares, the company said.

The rights issue will help fund National Grid’s significant capital investment of about £60billion in energy network infrastructure.

Boss John Pettigrew said the move is reflective of the company ‘cementing our position as a leader in the energy transition in the UK and US northeast’.

He added: ‘On both sides of the Atlantic, governments and regulators are moving with increased urgency to attract the levels of investment required to meet their decarbonisation targets.

‘As economies become increasingly digital, electrified and decarbonised, the need for energy infrastructure has rarely been more pressing. Our investment will unlock significant economic growth and, by the end of the decade, National Grid is expected to support over 60,000 more jobs, while also decarbonising our energy systems, bolstering security of supply, and reducing consumer bills in the long term.

‘Our strong track record of infrastructure delivery, positive engagement with our regulators and wider stakeholders, alongside clarity on the scale and profile of our capital investment positions National Grid to take advantage of the significant growth opportunities we see ahead.’