Ladbrokes Coral set to become 52nd founder FTSE 100 member to disappear (and two more could also lose their independence)

“As GVC’s acquisition of Ladbrokes Coral becomes effective leading to the cancellation of the target’s shares by no later than 08:00 on Thursday 29th, a 52nd founding member of the original FTSE 100 in January 1984 will disappear from view. Two more, GKN and Hammerson, are also both facing questions over their independence, after the bids from Melrose and France’s Klepierre respectively,” says Russ Mould, AJ Bell Investment Director.

27 March 2018

“Even if GKN staves off its predator the company is due to be broken up, as the defence plan outlined by chief executive Anne Stevens sanctions the merger of the Driveline operation with America’s Dana, leaving shareholders with 47.25% of the new entity and the disposal of non-core assets ahead of a sizeable cash return.

“GKN will thus become either the 53^rd founding member of the FTSE 100 to be swallowed up or the eleventh to be broken up.

“If it fails to fend off the attentions of Klepierre, Hammerson will become the 54^th of the original line-up to become part of another firm. Should the real estate investment trust retain its independence it will be one of four firms that started off in the FTSE 100 in 1984 but are now in the FTSE 250, alongside Edinburgh Investment Trust, Elementis (which was known as Harrisons & Crosfield, back in the days) and Rank. Hammerson is also looking to acquire Intu in a cash-and-stock deal that could return it to the FTSE 100.

FTSE 100: what has happened to the original constituents?

See table 1 below for detail

“Only 16 of the original 100 names are still in the FTSE 100 under the same name and some of those – such as Whitbread, Pearson, Lloyds Bank and Royal Bank of Scotland – have seen dramatic changes in their business structure or even their business model over the last 34 years.

“A further 13 are still in the benchmark index but under a different name, including GKN, which in 1984 was known as Guest, Keen & Nettlefolds. Twelve more live on as part of a firm that is in the FTSE 100 now, a number Ladbrokes will swell should GVC attain promotion to the premier index, as seems likely.

“The real secret to long-term investing in stocks is to pick companies with strong competitive positions that are reinforced by investment, high barriers to entry and healthy finances and nurtured by capable management. However, the remarkable rate of turnover among the UK’s premier elite, with just 29 survivors after 34 years, shows how hard finding those sustained winners can be, especially as three founder members of the index went bust, two within a decade of its launch.”

Table 1 - FTSE 100: where the original constituents are now

		New name
	*In FTSE 100, same name*
1	Associated British Foods		FTSE 100
2	Barclays		FTSE 100
3	Barratt Development		FTSE 100
4	Johnson Matthey		FTSE 100
5	Land Securities		FTSE 100
6	Legal & General		FTSE 100
7	Lloyds Bank		FTSE 100
8	Marks & Spencer		FTSE 100
9	Pearson		FTSE 100
10	Royal Bank of Scotland		FTSE 100
11	Sainsbury		FTSE 100
12	Smith & Nephew		FTSE 100
13	Standard Chartered		FTSE 100
14	Tesco		FTSE 100
15	Unilever		FTSE 100
16	Whitbread		FTSE 100

	*In FTSE 100, different name*
1	BAT Industries	BAT (BATS)	FTSE 100
2	British Aerospace	BAE Systems (BA.)	FTSE 100
3	British Petroleum	BP (BP.)	FTSE 100
4	Commercial Union	Aviva (AV.)	FTSE 100
5	Glaxo	GlaxoSmithKline (GSK)	FTSE 100
6	Guest, Keen & Nettlefolds	GKN (GKN)	FTSE 100
7	Imperial	Imperial Brands (IMB)	FTSE 100
8	Prudential Assurance	Prudential (PRU)	FTSE 100
9	Reckitt & Colman	Reckitt Benckiser (RB.)	FTSE 100
10	Reed International	RELX (REL)	FTSE 100
11	Rio Tinto-Zinc	Rio Tinto (RIO)	FTSE 100
12	Royal Insurance	RSA (RSA)	FTSE 100
13	Shell Transport & Trading	Royal Dutch Shell (RDSB)	FTSE 100

	*Acquired and now part of FTSE 100 firm*
1	Allied Lyons	Merged with Pedro Domecq (1994). Acquired and broken up by Pernod Ricard, Fortune and Diageo	Acquired
2	Beecham	Now part of GlaxoSmithKline	Acquired
3	Britoil	Acquired by BP (1988)	Acquired
4	Distillers	Now part of Diageo	Acquired
5	General Accident	Part of Aviva	Acquired
6	Great Universal Stores	Experian (EXPN) + Home Retail (HOME) - Home Retail acquired by Sainsbury in 2016. Homebase sold to Wesfarmers for £340m, Argos retained.	FTSE 100 / Acquired
7	Midland Bank	Now part of HSBC	Acquired
8	National Westminster Bank	Now part of RBS	Acquired
9	Plessey	Acquired by GEC and Siemens (1989) and then merged to form BAE Systems (1999)	Acquired
10	Sun Alliance & London Insurance	Part of RSA	Acquired
11	Tarmac	Acquired by Anglo American (1999), part-sold 2013 and now part of JV with Lafarge	Acquired
12	Wimpey (George)	Now part of Taylor Wimpey	FTSE 250

	*Spin-outs or mergers to create new FTSE 100 firm*
1	Grand Metropolitan	Diageo (DGE)	FTSE 100
2	Racal	Vodafone (VOD)	Acquired

	*Still quoted, another index*
1	Edinburgh Investment Trust		FTSE 250
2	Harrisons & Crosfield	Elementis (ELM)	FTSE 250
3	Rank		FTSE 250
4	Hammerson		FTSE 250

	*Acquired by another firm*
1	Associated Dairies		Acquired
2	BICC		Acquired
3	BOC		Acquired
4	BPB Industries		Acquired
5	BTR		Acquired
6	Berisford		Acquired
7	Blue Circle		Acquired
8	Boots		Acquired
9	Bowater		Acquired
10	British Electric Traction		Acquired
11	British Home Stores		Acquired
12	Burton		Acquired
13	Cable & Wireless		Acquired
14	Consolidated Gold Fields		Acquired
15	English China Clays		Acquired
16	Exco International		Acquired
17	Fisons		Acquired
18	Globe Investment Trust		Acquired
19	Guardian Royal Exchange		Acquired
20	Hambro Life		Acquired
21	Hawker Siddeley		Acquired
22	House of Fraser		Acquired
23	Ladbrokes		Acquired
24	MEPC		Acquired
25	Northern Foods		Acquired
26	Peninsular & Oriental Steam		Acquired
27	Pilkington		Acquired
28	Magnet & Southerns		Acquired
29	RMC		Acquired
30	Redland		Acquired
31	Rowntree Mackintosh		Acquired
32	Scottish & Newcastle		Acquired
33	Sears		Acquired
34	Sedgwick		Acquired
35	Standard Telephone & Cables		Acquired
36	Sun Life Assurance		Acquired
37	Trafalgar House		Acquired
38	Trusthouse Forte		Acquired
39	Ultramar		Acquired
40	United Biscuits		Acquired

	*Broken up*
1	Bass		Broken up
2	Cadbury Schweppes		Broken up
3	Charterhouse J. Rothschild		Broken up
4	Courtaulds		Broken up
5	Dalgety		Broken up
6	General Electric Company (GEC)		Broken up
7	Hanson Trust		Broken up
8	ICI		Broken up
9	Imperial Continental Gas		Broken up
10	Thorn EMI		Broken up

	*Bankrupt*
1	British & Commonwealth Shipping		Bankrupt
2	Ferranti		Bankrupt
3	MFI Furniture		Bankrupt

Source: London Stock Exchange, Company accounts, FTSE Russell. Assumes Ladbrokes Coral acquired by GVC, but does not assume GVC is promoted to the FTSE 100. Treats GKN as a FTSE 100 member but under a new name and Hammerson as a FTSE 250 member.