Mark Kleinman’s 2024 bold predictions: A BP bid, a new gig for Rose and much, much more
After a protracted period of volatile markets and even more volatile politics, predicting much in business seems more of a fool’s errand than ever before.
Looking back on my forecasts for UK plc in 2023 does not entirely fill me with shame though: some of the corporate events I anticipated did come to pass, although others, such as the prediction that Rupert Murdoch would succeed in reuniting the two wings of his media empire, were sadly short-sighted, with the tycoon’s most significant move being, of course, his September retirement. Undeterred, here are my top ten forecasts for a year which will – as usual – defy expectations.
A bid for BP
BP will face a credible takeover bid. The boardroom chaos triggered by Bernard Looney’s unceremonious departure last year is far from being resolved, and a permanent successor is unlikely to be appointed for months.
Either Chevron or Shell – or perhaps both – will decide to brave the enormous political headwinds that will be generated by an approach, but there have been too many dress rehearsals since the Gulf of Mexico disaster for one of the other majors not to be seriously tempted. With a market capitalisation of £80bn, any offer could easily turn out to be the biggest globally in 2024.
Headed for extra-time
Efforts to forge a new financial redistribution agreement for English football will collapse amid acrimony. The failure of attempts so far to get Premier League clubs’ support suggests that this is not the boldest of predictions, but the absence of a ‘New Deal’ ahead of the arrival of a new independent industry regulator will have far-reaching repercussions. The absence of an agreement will mean that the game’s financial model remains unresolved throughout the calendar year, but anger over the impasse is likely to prompt leadership changes as the sport’s financial power struggle continues.
Ballot delays
Rishi Sunak will go to the country towards the end of the year, rather than in May. The scheduling of the March Budget has prompted speculation that an early election will be the prime minister’s preferred option. Yet Britain’s economic data – barring falling inflation – has not yet delivered much in the way of benefits for most consumers and households. I expect Sunak to delay polling day until those benefits are more tangible (if indeed that time arrives).
Will the Schu fit?
2024 will need to be a year of bold action for Unilever’s newish chief executive, Hein Schumacher. Years of portfolio-tinkering have yielded few rewards for the FMCG giant’s shareholders, leaving the door ajar for the activist investor Nelson Peltz’s Trian vehicle to build a significant stake. The most radical option would entail the demerger of Unilever’s food business, including the ice cream division which houses Ben & Jerry’s. I’d put the chances of that at 50-50.
Thames down the plughole?
Thames Water will collapse into a form of insolvency proceedings when its shareholders and lenders refuse to commit the funding necessary to keep it afloat.
The justifiably tough stance of Ofwat, the industry regulator, egged on by cross-party political anger, will leave Thames with no other means to survive.
The special administration of Britain’s biggest water utility has been on the cards since last summer, and has since resembled a slow-motion train crash as its beleaguered bosses fumble their way through the biggest crisis to hit the sector since privatisation. The justifiably tough stance of Ofwat, the industry regulator, egged on by cross-party political anger, will leave Thames with no other means to survive.
Musical Chairs
If your interest is piqued by FTSE-350 boardroom changes, keep an eye on Abrdn, Informa, ITV, and RELX, where chief executive succession will take a significant step forward.
New chairmen are likely to be on the agenda at British Land, Marks & Spencer and WPP, but not at Barclays, where I expect Nigel Higgins to win over critics who have questioned his stewardship of former CEO Jes Staley over the Jeffrey Epstein scandal.
Rebounding
It will also be a year of comebacks for business figures who fell on tough times. I stand by my initial forecast that Dame Alison Rose, the former NatWest Group chief executive, will not take an executive post at a UK-regulated financial institution following the circumstances of her exit, but I do expect her to surface in a senior private equity role. Former BP chief Looney will also emerge at an energy transition-focused investment firm.
Smith’s to defy high street logic again
WH Smith will axe the retail logo which has prompted ridicule among those who have likened it to that of the National Health Service. The mis-step will be a rare one for a high street name which has exceeded all expectations by outlasting many of its now-defunct competitors – unlike the implications of its new logo, WH Smith has defied logic by avoiding life support.
New York, New York…
Those hoping that 2024 will deliver a step-change to the prospects for the London listings market should prepare for disappointment.
After the crushing blow of ARM Holdings’ decision to float in the US last year, two other significant companies – the Asian-based online fashion giant Shein and Buy Now Pay Later platform Klarna will both follow suit. To rub salt into the wound, Boots will opt against a London listing, with its US parent opting for a private sale.
And finally…
The FTSE-100 will end the year again underperforming some of its international peers, with volatility caused by the elections and the conflicts in the Middle East and Ukraine reflected by an ongoing battle with inflation and fewer central bank interest rate cuts than many investors are hoping. I’m anticipating that London’s blue-chip index will end 2024 just below 8000 points.
Mark Kleinman is Sky News’ City Editor and writes a weekly column for CityAM
He can be found tweeting at @MarkKleinmanSky