CITY WHISPERS: Rolls-Royce chief’s olive branch fails to woo critic

When Rolls-Royce boss Tufan Erginbilgic invited one of his firm’s biggest critics – JP Morgan analyst David Perry – to a meeting with senior employees in January, he may have thought the hatchet was buried.

Erginbilgic, who joined on Jan. 1, sought to woo the company’s longtime skeptic as part of an effort to craft a new strategy for the ailing engine maker.

Perry’s scathing notes to customers have criticized Rolls-Royce’s debt, strategy and performance.

However, the invitation to Perry did little to improve relations. Last week’s JP Morgan post said, “Rolls-Royce’s new CEO, Tufan Erginbilgic, recently told his employees that ‘every investment we make destroys value’. We’re not convinced Mr. Erginbilgic can change this.’

There was also criticism of the “high turnover” in the top team after recruits were brought in from Erginbilgic’s old hotpot, BP.

Human skydiving has not yet won over the skeptics.

A bullet dodged

Few can lay claim to a more ghastly week than the Confederation of British Industry PR team.

But a City PR breathed a sigh of relief and told Whispers they had considered running the hard-fought communications department.

“The CBI hired a press chief a few months ago and I almost went for it.

“As things stand, I’m not sure I would have survived my probation,” they said.

A bullet dodged.

Private equity looters are officially back in the game

Acquisition approaches for Network International, Wood Group, Sureserve, The Hut Group and Dechra Pharmaceuticals are likely just the start of the next wave of deals, City sources agree.

But another trend is also emerging.

Rising interest rates are making the debt-heavy buyouts of years past less viable – and rumor has it that private equity firms are now scrambling the Middle East and other sovereign wealth funds to secure the cash needed for acquisitions.

Abu Dhabi is said to be lining up as a co-investor with Dechra’s freer EQT, with dealmaking sources insisting that these sorts of deals will soon be a regular feature.

Qinetiq in pole position for more deal making

Analysts at Barclays believe Qinetiq is in pole position for more deals.

The high-tech defense firm released a bullish update last week saying its full-year results would beat the city’s expectations.

Barclays said it was well positioned for “future bolt-on business” – in layman’s terms, its buoyant trading and healthy amount of cash means it could bring in smaller rivals.

Boss Steve Wadey is eager to close more deals to grow the business – unlike many of his FTSE 250 colleagues who have fallen prey to bigger bidders and been delisted.

Always best to be hunter rather than hunted.