Virgin land as the founder of Ovo takes flight

Stephen Fitzpatrick: mobile up

Ovo Energy founder Stephen Fitzpatrick has Talk about modeling his business on Richard Branson’s Virgin empire. They share an enthusiasm for getting things off the ground.

Belfast-born Fitzpatrick last week unveiled plans to topple its electric air taxi developer, Vertical Aerospace, on the New York Stock Exchange via a merger with a special-purpose acquisition vehicle. Vertical started as a side project at Manor Racing, the failed Formula 1 team that once carried the Virgin brand, and Virgin Atlantic is part of a group of companies that have pre-ordered planes.

Vertical grew out of a sprawling Ovo holding company that is chaired by Stephen Murphy, who succeeded Branson to become CEO of Virgin Group from 2005 to 2011.

The parallels do not end there. Fitzpatrick is behind a planned relaunch of Kensington Roof Gardens in London, which was Virgin’s flagship party location from 1981 until it closed in 2018. He and Vincent Casey, Ovo’s chief investment officer, agreed last year to lease the 15,000 square foot space and its more than half an acre of gardens to Sirosa, the German investment group that has owned the building since 2013.

Their idea is that of a private club with an ethic that respects the environment. Those familiar with the plan say it remains on track despite the pandemic and estimate a development cost of between £ 5 million and £ 10million.

Diana Brightmore-Armor: happy families

Everything is changing at the UK’s oldest private bank: C Hoare & Co appointed Diana Brightmore-Armor as new CEO this week.

The former head of Lloyds Banking Group and ANZ is the first woman to hold the most senior position in the Fleet Street store, which once described itself as ‘proud to be boring’ and imposes unlimited liability for its actions to the owners of the founding family. She joins her in leading a modernization plan that will take Hoare to the provinces and across the Atlantic.

“When I was on the board, I didn’t expect to be the CEO. But it gave me a better understanding of the organization, ”she said. “It’s not just family, tradition and history, but it’s actually a very relevant and nimble bank. . . I come from very large organizations where this has not always been the case.

Patrick Drahi: jumped collar

How did Patrick Drahi’s Altice acquire a 12.1 percent stake in BT almost overnight? The answer seems obvious to financial engineering experts and risks confusing everyone.

On paper, it looks like magic. On average, around 30,000 BT shares are traded per day. Altice revealed on June 7 that it had $ 1.2 billion, although no major BT shareholder has recorded a substantial sale for more than a year.

Based on average daily volume, it would have taken Altice approximately 152 years to build up BT’s stake. And although London Stock Exchange data shows that a block of just over 456 million BT shares changed hands on June 7, even that still leaves about two-thirds of the holdings unexplained.

The suspicion, therefore, is that Altice used borrowed stocks to take advantage of an underlying position that costs significantly less than the carrying value of the £ 2.2bn stake. That’s a suspicion backed up by data on stock lending, which shows the number of BT shares on loan has grown from less than 250 million to nearly 1.25 billion since the start of the month.

Drahi’s brokers on the BT buy, BNP Paribas and Morgan Stanley, are specialists in lending instruments such as collars, which fix the future value of stocks by trapping their price between the corresponding put and call options. . Borrowing shares in a tunnel allows an investor to inherit voting rights without running any economic risk. It is a ploy most commonly used by activists such as Edward Bramson, who used collared instruments to gain low cost weight in his long campaign against Barclays.

In contrast, Drahi’s relationship with the BT board of directors has so far been amicable. However, financial engineering tends to suggest that profit may not be the primary motivation, so it’s hard to predict how long that may last.

About Leah Albert

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