There are no new stocks I can add to my SIF folio this week. So instead I’ve decided to take a look at an interesting deal that’s due to complete later this quarter. The planned merger between accident management firm Redde (LON: REDD) and van hire business Northgate (LON: NTG) was a big surprise to me. I couldn’t really understand the logic behind this combination. The only obvious thing I could see that linked the firms was their chairman. Avril Palmer-Baunack was chair of Redde until the end of July 2019. Ms Palmer-Baunack then took over as Northgate chair on 12 August. On 29 November, the merger was announced. Winners amp; losers? My instinctive view is that Northgate shareholders are getting the worse half of this deal. Although the firm faces cyclical headwinds and some company-specific issues, fundamentally I think it’s an attractive business. Former chief executive, Kevin Bradshaw, had been MD of Avis Europe for five years, so had experience in this sector. He was guiding Northgate through a turnaround programme aimed at maximising return on capital employed. This was (slowly) starting to deliver positive results,…
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