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FB Roundup: Pentland Group, Fox Corp, Pernod Ricard

Rubin family’s Pentland shifts from Brexit Britain to Ireland, Lachlan Murdoch stamps $7 billion influence as deal-making successor, Pernod Ricard acquires premium brands and buybacks shares.

Rubin family’s Pentland shifts from Brexit Britain to Ireland

Pentland Group, the British Rubin family-controlled owner of sports brands Speedo and Lacoste and majority owner of high street retailer JD Sports, has moved offshore because of Brexit.

However, the $9 billion group said its daily trade will stay in the UK and be taxed under UK jurisdiction.

Pentland is chaired by Stephen Rubin (pictured with son Andy), 83, who was ranked, with his family, by The Sunday Times Tax List as the biggest payers of tax in Britain in 2019. Their estimated liability was $235 million (£181.6 million). The Rubins fell to fifth place for 2021 and have been overtaken as the biggest taxpayers by Denise Coates’ family, owner of the Bet365 gambling group, according to the newspaper.

Pentland said in its annual report it had formed a new holding company called Pentland Industries International DAC. The group’s parent company was registered in Jersey and was a resident for tax purposes in the Republic of Ireland.

A statement from the group said: “Pentland Industries International DAC in Ireland was established in 2019 so that the group could continue to benefit from the EU’s freedoms and regulatory environment post Brexit. Having a parent company in Ireland does not save us any tax as all of our UK day-to-day trading activities will remain in the UK subject to UK tax.”

Pentland reported its revenue for 2020 was up 2.4% from the previous year to £6.6 billion ($9.020 billion), driven by a “strong international performance at JD Sports and a good performance in the group’s investment division, reflecting the foundations laid in recent years.”

The group had repaid all the support it received from the UK government since the start of the Covid-19 crisis for all directly controlled investments.

Rubin said 2020 was a “challenging year” for many of Pentland’s businesses, requiring them to refocus their priorities to deal with the scale of economic slowdown created by the crisis.

“Trading within JD and Pentland Brands was significantly compromised, particularly in the UK, due to retail stores, gyms and leisure centres being closed for much of the year,” he said.

“Despite this, I am proud of the response and agility shown by our business leaders and what we have achieved in the year under review.”

Lachlan Murdoch stamps $7 billion influence as deal-making successor

Heir apparent Lachlan Murdoch appears to have inherited his father Rupert Murdoch’s zeal for deals with the estimated $50 million buyout of celebrity tabloid platform TMZ this month, adding to almost $7 billion of acquisition since 2019.

The New York-headquartered Fox scooped the TMZ brand and its assets from WarnerMedia and retained its co-founder Harvey Levin. The Los Angeles-based company joined the Murdoch family’s portfolio of interests in titillating news and entertainment media outlets, among them The New York Post, the Daily Telegraph in Australia and The Sun in the United Kingdom.

“The unique and powerful brand Harvey has created in TMZ has forever changed the entertainment industry and we’re excited to welcome them to Fox,” Lachlan Murdoch (pictured above), 50, said. Fox would “find creative ways to utilise and expand this content in effective and compelling ways for our audiences,” he said.

The eldest son of media mogul Rupert Murdoch (pictured right), 90, is the executive chairman and chief executive of Fox Corp. The mass news and sports media corporation was founded by Murdoch senior in 2019 from assets which were not acquired by the Walt Disney Company from the Murdoch family’s breakup of its 21st Century Fox empire in a $71 billion deal. Fox Corp is owned by the Murdoch family via a family trust with 39.6% ownership share.

Appointed to the board in 1996, London-born, Princeton-educated, third-generation Lachlan Murdoch serves as the co-chairman of News Corp, parent company of Fox, opposite his father as executive chairman. Under Lachlan’s influence since 2019, entities controlled by the Murdoch clan have invested almost $7 billion in more than 20 acquisitions, according to research by the Financial Times and Refinitiv, reported last week.

News Corp announced last month its financial 2021 was its most profitable year since its formation in 2013. Revenue rose 4% to $9.36 billion in 2021, helped by a 30% surge in the fourth quarter. Profitability improved by 26% for the year, with a record number of digital subscriptions, record revenue and profits at Move and record traffic at realtor.com, record profits at HarperCollins, record subscriber growth at Foxtel and the largest profit at Dow Jones since its acquisition in 2007, Robert Thomson, non-family chief executive, said.

Pernod Ricard acquires premium brands and buybacks shares

Pernod Ricard, the French third-generation wines and spirits giant, is continuing its “Transform and Accelerate” strategic plan launched in 2018 with a second deal with an upmarket family-owned brand this year and the resumption of its share buyback programme.

Pernod Ricard acquired this month a minority stake for an undisclosed sum in Sovereign Brands and its portfolio of “super premium” wine and spirits. Sovereign was founded by brothers Brett and Brian Berish, who have an industry reputation for brand creation. Sovereign is best known for its Luc Belaire, a French sparkling wine, Bumbu, a range of rum products from the Caribbean, plus Brazilian gin McQueen and the Violet Fog and Villon, a French liqueur.

In keeping with Pernod Ricard’s decentralised organisation, the two groups will continue to operate independently. The deal did not call for changes in Sovereign’s daily operations, management, or distribution. However, Pernod Ricard said its investment was a first step in a long-term partnership in “common industrial and commercial projects.”

Alexandre Ricard (pictured above), 49, is the chairman and chief executive of Pernod Ricard and the grandson of industrialist Paul Ricard who created the eponymous brand of anise in 1932.

“Sovereign Brands has demonstrated exceptional innovation and marketing skills,” Ricard said,

“We are thrilled to partner with Brett and Brian Berish, two of the most innovative entrepreneurs of our industry.”

The minority stake in Sovereign followed the Paris-headquartered family business’ acquisition of a majority stake in La Hechicera in March 2021. Like Sovereign, the Colombian “ultra-premium” rum was a nascent brand launched by a family, in La Hechicera’s case, by Miguel and Laura, members of the spirit-producing Riascos family.

Pernod Ricard announced on 1 September its plan to restart its €500 million ($585 million) share buyback programme, first launched in August 2019. The company will acquire its own shares for up to €250 million ($293 million) from September to November 2021. The Ricard family remains the largest shareholder, with a 15.9% stake and voting rights of about 25%.

Despite the Covid-19 pandemic’s impacts on retail and travel, Pernod Ricard reported last month a rebound in sales for its 2021 financial year, a 9.7% increase in organic growth to $10.3 billion.


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