Comcast Triumphed Over Fox In Auction For Sky


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(qlmbusinessnews.com via news.sky.com– Mon, 24th Sept 2018) London, Uk – –

Comcast's dramatic shoot-out with the US entertainment giant ends 21 months of uncertainty for Sky over its ownership.

Comcast has triumphed in the auction to buy Sky plc, the owner of Sky News, for £29.7bn in the biggest takeover ever seen in Europe's media industry.

Comcast's offer of £17.28 per share was £1.61 ahead of Fox's offer of £15.67.

The US giant's victory follows a dramatic shoot-out with US entertainment giant 21st Century Fox in a rare three-round auction overseen by the Takeover Panel.

The result ends 21 months of uncertainty for Sky over its ownership after the company's independent committee unanimously recommended the offer to shareholders.

In a statement Sky plc said: “As the price of the final Comcast Offer is materially superior, it is in the best interests of all Sky shareholders to accept the Comcast offer.

“Accordingly, the Independent Committee unanimously recommends that Sky shareholders accept the Comcast offer, and in order to ensure the successful closing of the Comcast offer, urges shareholders to accept immediately.”

Both companies want Sky to help them compete more effectively with the new wave of online entertainment providers, including streaming services provided by the likes of Netflix and Amazon Video, who sell their content directly to viewers.

Comcast in particular wants Sky to give it a presence in Europe and reduce its dependence on the US and has also made clear its admiration for Sky's technological know-how.

Disney, meanwhile, has been looking for a way to make its content available directly to viewers without having to go via a third party like a cable company.

Sky agreed to be taken over by Fox, its biggest shareholder, in December 2016. Since then, Fox has agreed to sell most of its entertainment assets to Disney, including its Hollywood film studio and its 39.1% stake in Sky.

However, the bid was held up by a lengthy series of investigations by the Competition & Markets Authority and by Ofcom, the broadcasting and telecoms regulator.

That opened the door for Comcast to make a counter-bid for Sky. In July, it tabled a £14.75-a-share offer for Sky, valuing the company at £26bn.

That was the highest offer going into today's auction and compared with Friday night's closing price of £15.85.

Under the contest, Fox – as the lower bidder – was entitled to raise its offer first.

In the second round, only Comcast was allowed to raise its offer.

This meant the two sides went into a final “sudden death” round of bidding.

Such auctions are exceptionally rare. There have been only four since the rules were changed in 2002 and the most recent of these was in April 2008 when Enodis, a maker of kitchen equipment for McDonald's and Burger King, was acquired by the US company Manitowoc for £948m.

 

 

Brian Roberts, chairman and chief executive officer of Comcast, said it was a “great day”.

He added: “Sky is a wonderful company with a great platform, tremendous brand, and accomplished management team.

“This acquisition will allow us to quickly, efficiently and meaningfully increase our customer base and expand internationally.

“We couldn't be more excited by the opportunities in front of us.

“We now encourage Sky shareholders to accept our offer, which we look forward to completing before the end of October 2018.”

Jeremy Darroch, group chief executive for Sky, said: “This is the beginning of the next exciting chapter for Sky.

“Brian and his team have built a great business and we are looking forward to bringing our two companies together for the benefit of our customers and colleagues.

“As part of a broader Comcast we believe we will be able to continue to grow and strengthen our position as Europe's leading direct to consumer media company.

“Today's outcome is down to the hard work of tens of thousands of people who have built and developed this business together over the last 30 years. Sky has never stood still, and with Comcast our momentum will only increase.”

21st Century Fox said in a statement that it was “considering its options regarding its own 39% shareholding in Sky and will make a further announcement in due course”.

It added: “Sky is a remarkable story and we are proud to have played such a significant role in building the incredible value reflected today in Comcast's offer.”

 

 

Other companies whose fates have been decided by an auction overseen by the Panel include Corus, the owner of British Steel and Canary Wharf, the commercial property company.

However, in terms of the amount of money being paid, this auction is by far the biggest yet.

Sky, which was founded in 1989, is Europe's biggest pay television broadcaster.

It has 23 million household customers in the UK, Ireland, Germany, Austria and Italy, while it has recently launched “over the top” services in Spain and Switzerland.

It floated on the stock market in 1994 and, since flotation, has been a remarkably stable business, having had just five chief executives in the intervening 24 years – the late Sam Chisholm, Mark Booth, Tony Ball, James Murdoch – who is the current chairman of Sky and current chief executive of Fox – and Mr Darroch, the current incumbent.

 

 

By Ian King, Sky News business presenter

IMF: No-deal Brexit would entail substantial costs for UK economy

(qlmbusinessnews.com via bbc.co.uk – – Mon, 17th Sept, 2018) London, Uk – –

The International Monetary Fund has warned that a “no-deal” Brexit on World Trade Organization terms would entail substantial costs for the UK economy.

Such an outcome would affect “to a lesser extent” other EU economies.

It said challenges in getting a deal done were “daunting” and warned against further UK interest rate rises.

The IMF said it expected Britain's economy would grow by about 1.5% a year in 2018 and 2019 if a broad Brexit agreement was struck.

Christine Lagarde, the IMF's managing director, added: “Those projections assume a timely deal with the EU on a broad free trade agreement and a relatively orderly Brexit process after that.”

The IMF said that all likely Brexit scenarios would “entail costs for the UK economy”, but that a disorderly departure could lead to “a significantly worse outcome”.

Speaking at a news conference at the Treasury in London, Ms Lagarde said: “Any deal will not be as good as the smooth process under which goods, services, people and capital move around between the EU and the UK without impediments and obstacles.”

She said a “disorderly” or “crash” exit from the EU would have a series of consequences, including reduced growth, an increased deficit and depreciation of sterling, leading to a reduction in the size of the UK economy.

She pointed out that countries tended to trade mostly with their neighbours, adding: “I think geography talks very loudly.”

In July, the IMF said the UK economy would grow by 1.4% this year and 1.5% in 2019.

 

Deutsche Bank to move assets from London to Frankfurt after Britain’s planned exit from the EU

(qlmbusinessnews.com via uk.reuters.com — Mon, 17th Sept 2018) London, UK —

FRANKFURT (Reuters) – Deutsche Bank (DBKGn.DE) said on Monday that it would move assets from London to Frankfurt after Britain’s planned exit from the European Union next year, in line with British and EU regulators.

“The terms on which banks will operate in the EU and UK after Brexit remains unclear in the absence of a firm political agreement but our intention is to operate in the UK as a branch in line with the Prudential Regulation Authority’s guidance”, the lender said in a statement.

It added that it announced in 2017 that would make Frankfurt rather than London the primary booking hub for its investment banking clients.

According to a source close to the matter, Deutsche Bank is considering shifting large volumes of assets from London to Frankfurt and to transform its UK arm into a smaller, less complex and ringfenced subsidiary.

By Arno Schuetze

 

 

UK economy grew by 0.3% in July helped by World Cup and warm weather

(qlmbusinessnews.com via bbc.co.uk – – Mon, 10th Sept 2018) London, Uk – –

The UK economy grew by 0.3% in July after being helped by the heatwave and the World Cup, according to the Office for National Statistics.

In the three months to July, the economy expanded by 0.6%.

“Services grew particularly strongly, with retail sales performing well, boosted by warm weather and the World Cup,” said Rob Kent-Smith from the ONS.

“The construction sector also bounced back after a weak start to the year,” he added, but production contracted.

“The dominant service sector again led economic growth in the month of July with engineers, accountants and lawyers all enjoying a busy period, backed up by growth in construction, which hit another record high level,” said Mr Kent-Smith.

The 0.6% growth rate for the three months to July was at the top end of forecasts, and marks a pick-up from the 0.4% rate seen in the three months to June.

 

 

UK investors spurred on by US market’s record-breaking bull run

(qlmbusinessnews.com via telegraph.co.uk – – Mon, 27 Aug 2018) London, Uk – –

Surging investment in shares is boosting stamp duty tax payments to levels not seen since the peak of the boom years in 2007 and the dotcom bubble in 2000.

British investors are being spurred on by the US market’s record-breaking bull run, which is driving investment in equities across much of the world.

It adds to evidence investor sentiment has fully recovered from the ­financial crisis. But it could be another warning sign that exuberant markets are at risk of entering a bubble.

So far this financial year the Treasury has raised £1.3bn from stamp duty on share purchases, up by 17pc on the same period last year. If this continues the Exchequer will bag a windfall haul of more than £4bn, a level not hit for more than a decade.

FTSE 350 share trading volumes are up by more than 20pc this year on their previous peaks in 2007 or 1999, according to data from Bloomberg.

However, past eras of such vigorous stock buying were followed by a crunch. There are already signs of wobbling markets in the US tech sector, where booming prices have left investors exposed to any bad news.

“Markets have been rising for such a long time, expectations are relatively high,” said Tom Stevenson at Fidelity Personal Investing. “When you get disappointing results in that environment then you get some pretty savage market reactions.”

US markets are likely to fall next year as boom turns to a crunch of around 20pc, according to John Higgins at Capital Economics. Such a bust would hit UK markets too, he believes.

“There is a good chance the UK stock market will suffer as a result of that,” he said. “When the US stock market falls sharply we invariably see other stock markets around the world doing likewise, irrespective of conditions in the local economy.

“Many of these stock markets, particularly the FTSE, are chock-full of ­international companies so are ­exposed to what is going on in the global economy as much as they are at home.” 
Britain is particularly exposed to any downturn in the world economy ­because it is home to so many giant companies. This could mean investors, who have not seen shares rise as much as those in the US, could be hit by a downturn that is just as severe.

“The UK is globally exposed, people use the UK’s markets as a proxy for buying into the upturn in global activity,” said Andrew Milligan at Aberdeen Standard Investments.

Risks to the market include the trade war, higher interest rates, China’s debts and the eurozone, Mr Milligan said, though these are midterm problems that are only likely to strike in 2020. 
“In the past 10 years people have been very fearful, there has been a lot of money parked on the sidelines for a very long time,” said Robert Burgeman at Brewin Dolphin.

“I get people who are worried about the level of stock markets and think that there is a crash around the corner, but that is music to my ears because it means we have not reached that final capitulation stage [of a bubble] when people say: ‘Stuff it, I am all in’. We haven’t got to that stage yet where the taxi driver is telling you about the latest stock he has been buying.”

By Tim Wallace

 

 

PepsiCo to buy drinks machine maker SodaStream in $3.2 billion deal

(qlmbusinessnews.com via uk.reuters.com — Mon,20 Aug 2018) London, UK —

(Reuters) – PepsiCo (PEP.O) is buying household drink-machine maker SodaStream (SODA.TA) (SODA.O) in a $3.2 billion deal, it said on Monday, seeking an edge in health-conscious beverages as it battles chief rival Coca-Cola (KO.N).

PepsiCo will acquire SodaStream for $144 per share in cash, representing a 10.9 percent premium to the Friday closing price of SodaStream’s U.S.-listed stock.

SodaStream, which makes machines that turn tap water into carbonated water, will help diversify PepsiCo’s portfolio of snacks and beverages. The Purchase, New York-based group will use cash on hand to fund the acquisition.

SodaStream’s Israel-listed shares will be halted for trading until its Nasdaq-listed stock opens later on Monday, the Tel Aviv Stock Exchange said in a statement.

Reporting by Bhanu Pratap

 

 

GVC shares hit record high after joint venture with MGM Resorts

(qlmbusinessnews.com via uk.reuters.com — Mon, 30th July 2018) London, UK —

(Reuters) – GVC Holdings Plc (GVC.L) shares leapt to a record high on Monday after it agreed to set up an online betting platform in the United States with U.S. hotel and casino operator MGM Resorts International (MGM.N) .

The announcement comes ahead of the American football season and as British betting companies look to capitalize on the U.S. market after a U.S. Supreme court ruling in May lifted a ban on sports betting.

Bookmakers have also been assessing the impact of recently implemented UK gambling curbs after the government said in May it would cut the maximum stake on fixed-odds betting terminals (FOBTs) to two pounds from 100 pounds.

“GVC appears to have struck gold by signing a 50/50 JV with arguably the biggest gambling brand in the U.S.,” London-based broker Shorecap’s Greg Johnson said in a note.

GVC shares rose as much as 7.5 percent to a record high of 1,178 pence before retreating slightly to trade 5 percent by 0748 GMT.

The companies will initially invest $100 million each in the joint venture, which will have a U.S. headquarters, said GVC which owns the Coral, Ladbrokes and Sportingbet brands.

GVC said the joint venture would get access to 15 U.S. states with a population of 90 million, adding that the venture will get access to all U.S. land-based and online sports betting while integrating both companies’ customer loyalty programs.

“We are proud to join forces with GVC, the largest and most dynamic global online betting operator, with existing reputable and trusted operations in the U.S.,” MGM Resorts Chief Executive Jim Murren said.

GVC had said on Friday that it was in advanced talks regarding a joint venture with MGM. Sky News had also reported that the deal could pave the way for a merger between the two firms.

GVC, which has grown rapidly through acquisitions including the purchase of Ladbrokes late last year, has been looking to expand in the United States, after the U.S. Supreme Court paved the way to legalize sports betting.

The company said in July that it expected to post full-year results in line with expectations.

Reporting by Sangameswaran S

 

 

China blames U.S. for ‘largest-scale trade war’ in month long conflict

(qlmbusinessnews.com via uk.reuters.com — Fri, 6th July 2018) London, UK —

BEIJING/WASHINGTON (Reuters) – The United States and China slapped tit-for-tat duties on $34 billion worth of the other’s imports on Friday, with Beijing accusing Washington of triggering the “largest-scale trade war” ever in a sharp escalation of their months-long conflict.

Hours before Washington’s deadline for the tariffs to take effect, U.S. President Donald Trump upped the ante, warning that the United States may ultimately target over $500 billion worth of Chinese goods, or roughly the total amount of U.S. imports from China last year.

China’s commerce ministry, in a statement shortly after the U.S. deadline passed at 0401 GMT on Friday, said that it was forced to retaliate, meaning $34 billion worth of imported U.S. goods including autos and agricultural products also faced 25 percent tariffs.

However, an ensuing three-plus hour delay before Beijing confirmed that it had implemented retaliatory tariffs sowed confusion in markets.

“After the United States unfairly raised tariffs against China, China immediately put into effect raised tariffs on some U.S. goods,” foreign ministry spokesman Lu Kang told a daily media briefing on Friday afternoon.

China’s soymeal futures fell more than 2 percent on Friday afternoon before recovering most of those losses, amid market uncertainty over whether China had implemented tariffs on a list of U.S. goods, including soybeans.

Some Chinese ports had delayed clearing goods from the United States, four sources said on Friday. There did not appear to be any direct instructions to hold up cargoes, but some customs departments were waiting for official guidance on imposing added tariffs, the sources said.

Ford Motor Co said on Thursday that for now, it will not hike prices of imported Ford and higher-margin luxury Lincoln models in China.

An analysis of over four dozen imported U.S products facing higher duties showed that prices were little changed on Friday afternoon versus earlier in the week. The products, all sold on Chinese e-commerce platforms, ranged from pet food to mixed nuts and whiskey.

While Chinese state media have slammed Trump’s protectionism and on Friday likened his administration to a “gang of hoodlums,” the trade conflict has gained little traction on China’s tightly controlled social media, not cracking the 50 top-searched topics on the Twitter-like Weibo platform.

The dispute has roiled financial markets including stocks, currencies and the global trade of commodities from soybeans to coal in recent weeks.

Chinese shares, which have been battered in the run-up to the tariff deadline, reversed earlier losses to close higher, but the yuan remained weaker against the dollar. Asian equities wobbled but also managed to end up.

In the run-up to Friday’s tariff implementation, there was no sign of renewed negotiations between U.S. and Chinese officials, business sources in Washington and Beijing said.

“We can probably say that the trade war has officially started,” said Chen Feixiang, professor of applied economics at Shanghai Jiaotong University’s Antai Colege of Economics and Management.

“If this ends at $34 billion, it will have a marginal effect on both economies, but if it escalates to $500 billion like Trump said then it’s going to have a big impact for both countries,” Chen said.

‘GANG OF HOODLUMS’
China’s commerce ministry called the U.S. actions “a violation of world trade rules” and said that it had “initiated the largest-scale trade war in economic history.”

Trump has railed against Beijing for intellectual property theft and barriers to entry for U.S. businesses and a $375 billion U.S. trade deficit with China.

“You have another 16 (billion dollars) in two weeks, and then, as you know, we have $200 billion in abeyance and then after the $200 billion, we have $300 billion in abeyance. Ok? So we have 50 plus 200 plus almost 300,” Trump told reporters aboard Air Force One on Thursday.

Throughout the escalating conflict, China has sought to take the high road, positioning itself as a champion of free trade, but state media ramped-up criticism of Trump on Friday.

“In effect, the Trump administration is behaving like a gang of hoodlums with its shakedown of other countries, particularly China,” the state-run China Daily newspaper said in an English language editorial on Friday.

“Its unruliness looks set to have a profoundly damaging impact on the global economic landscape in the coming decades, unless countries stand together to oppose it.”

While the initial volley of tariffs was not expected to have major immediate economic impact, the fear is that a prolonged battle would disrupt makers and importers of affected goods in a blow to global trade, investment and growth.

“For companies with supply exposure to tariffs, they will move sourcing country of origin if they can; if they can’t, they’ll pass on as much of the tariff cost as they can, or see a cut in margins,” said Jacob Parker, vice president of China operations at the U.S.-China Business Council in Beijing.

A China central bank adviser said the planned U.S. import tariffs on $50 billion worth of Chinese goods – $34 billion plus a planned follow-on list worth $16 billion – will cut China’s economic growth by 0.2 percentage points, although the overall impact would be limited, the official Xinhua news agency reported Friday.

“This is not economic Armageddon. We will not have to hunt our food with pointy sticks. But it is applying the brakes to a global economy that has less durable momentum than appears to be the case,” Rob Carnell, chief economist at ING, said in a note.

U.S. Customs and Border Protection officials were due to collect 25 percent duties on a range of products including motor vehicles, computer disk drives, parts of pumps, valves and printers and many other industrial components.

China’s tariffs on hundreds of U.S. goods include top exports such as soybeans, sorghum and cotton, threatening U.S. farmers in states that backed Trump in the 2016 U.S. election, such as Texas and Iowa.

By Adam Jourdan in SHANGHAI, Michael Martina, Christian Shepherd, Dominique Patton and Elias Glenn in BEIJING, David Lawder and Jeff Mason WASHINGTON; Writing by Tony Munroe;

 

 

Tesco planning “strategic alliance” with French retail giant Carrefour

 

(qlmbusinessnews.com via bbc.co.uk – – Mon, 2 July 2018) London, Uk – –

Tesco says it is planning a “strategic alliance” with French retail giant Carrefour, as the two try to use their joint buying power to cut costs and offer lower prices to customers.

The two plan a “strategic relationship” when dealing with global suppliers, and the tie-up will also mean joint purchasing of their own-brand products.

The move comes as retailers face an increasingly competitive environment.

Tesco is the UK's largest retailer while Carrefour is Europe's largest.

Last year, Tesco – which employs 440,000 people – reported profits of £1.3bn with sales of £57.5bn.

Carrefour operates 12,300 stores across more than 30 countries, employing about 375,000 people worldwide. Last year, it had sales of €88.2bn (£78bn).

The two have been talking for two years and, although no formal agreement has yet been signed, they said they were hoping to confirm a deal in the next two months.

Retail shake-up
Tesco chief executive Dave Lewis said: “By working together and making the most of our collective product expertise and sourcing capability, we will be able to serve our customers even better, further improving choice, quality and value.”

The grocery sector is currently going through a period of rapid change. Tesco itself recently completed the purchase of wholesaler Booker, and in April, Sainsbury's said that it was in advanced talks to buy Asda from US retail giant Walmart.

The traditional big four UK supermarket chains – Tesco, Sainsbury's, Asda and Morrisons – have faced increasing competition from the rapidly-expanding budget chains Lidl and Aldi over the past few years, and there is now the added threat of internet giant Amazon moving into the sector.

Last year, Amazon bought upmarket grocer Whole Foods. In the UK, Amazon offers food sales through its Amazon Fresh service, although currently that is still focused on Greater London and parts of the South East.

“Another price war is now looming in the UK supermarket sector,” said Laith Khalaf, senior analyst at Hargreaves Lansdown. “The latest Tesco partnership looks like a direct response to the threat posed by the proposed merger of Sainsbury's and Asda, who will have access to the global buying power of Walmart as a result.

“The sector is already fiercely competitive, in no small part thanks to the emergence of the discounters Aldi and Lidl, and that comes against a background of shifting shopping habits.

“Challenging trading conditions have sparked a wave of re-invention in the UK supermarket sector, and this new partnership between Tesco and Carrefour is yet another stage in that process.'

‘Great opportunity'
Tesco's performance has gradually improved since 2014, when it reported the worst results in its history with a record pre-tax loss of £6.4bn. However, it recently recorded its 10th consecutive quarter of rising sales and said its growth plans were on track.

In January, Carrefour announced a major transformation plan that involved making cost cuts of €2bn by 2020, and investing €2.8bn in e-commerce by 2022.

Announcing the planned tie-up with Tesco, Carrefour Group chief executive Alexandre Bompard said the agreement was, “a great opportunity to develop our two brands at the service of our customers”.

“This international alliance further strengthens Carrefour allowing it to reach a key milestone in the implementation of its strategy.”

 

 

China shares sink amid Trump’s latest trade war threat

(qlmbusinessnews.com via news.sky.com– Tue, 19 June, 2018) London, Uk – –

Stock markets react to the latest threats following last week's tit-for-tat imposition of tariffs between the two countries.

Investors are reacting nervously to a potential escalation in President Trump's trade war with China, with stock markets falling sharply in Asia.

China's Shanghai Composite lost up to 5% of its value at one stage after the US president asked officials to identify $200bn of Chinese goods to be subject to a 10% tariff.

It prompted Beijing to accuse Washington of “blackmail” – warning it would respond to any such measures.

That followed last Friday's decision to impose 25% tariffs on $50bn of Chinese products.

Then, Beijing immediately retaliated by matching the US levy, which prompted Mr Trump to up the ante once more in what he regards as an unfair balance in trade between the two superpowers.

In a statement he said: “This latest action by China clearly indicates its determination to keep the United States at a permanent and unfair disadvantage, which is reflected in our massive $376bn trade imbalance in goods. This is unacceptable.

“Further action must be taken to encourage China to change its unfair practices, open its market to United States goods, and accept a more balanced trade relationship with the United States.

“Therefore, today, I directed the United States Trade Representative to identify $200bn worth of Chinese goods for additional tariffs at a rate of 10%.

“After the legal process is complete, these tariffs will go into effect if China refuses to change its practices, and also if it insists on going forward with the new tariffs that it has recently announced.

“If China increases its tariffs yet again, we will meet that action by pursuing additional tariffs on another $200bn of goods. The trade relationship between the United States and China must be much more equitable.”

The increasingly bitter trading relationship between the US and China comes less than a fortnight after a fractious G7 summit where Mr Trump's use of tariffs, both against China and on steel and aluminium imports from the EU, Canada and Mexico, was roundly criticised.

The latest escalation was reflected in the value of shares in both Asia and Europe.

The Shanghai Composite closed almost 4% down while Hong Kong's Hang Seng lost 3%.

All major European markets were also trading lower – the FTSE 100 faring better than most with just a 1% decline in early trading.

Commenting on President Trump's latest threat, head of Asia-Pacific trading at OANDA Stephen Innes, said: “That was quick and sudden, reminding us just how quickly things can get right out of hand.

“Indeed, this is moving beyond ‘tit-for-tat' levels and, predictably, investors are running for cover under the haven umbrellas as global equity indices are crumbling under the weight of an escalating trade war.

“Buckle up as this could get messy,” he concluded.

 

 

Virgin Money sold for £1.7bn

Wikimedia

(qlmbusinessnews.com via bbc.co.uk – – Mon, 18 June 2018) London, Uk – –

The owner of Clydesdale Bank and Yorkshire Bank, CYBG, has agreed to buy Virgin Money for £1.7bn.

Under the deal, all the group's retail customers will be moved to Virgin Money over the next three years.

It will be the UK's sixth-largest bank, with about six million customers, but 1,500 jobs are likely to go.

CYBG said it had agreed with Sir Richard Branson's Virgin Group to license the Virgin Money brand for £12m a year, rising to £15m later.

Virgin Group is Virgin Money's biggest shareholder with a 34.8% stake in the business.

Under the terms of the deal, Virgin Money shareholders will get 1.2125 new CYBG shares for every Virgin Money share they hold, and will end up owning about 38% of the combined business.

CYBG said the combined group would have about 9,500 employees, but it intended to reduce that total by about one-sixth, suggesting about 1,500 jobs would go.

It said some of those job losses would be achieved “via natural attrition”.

Virgin Money, which was founded in 1995, expanded its business in 2011 when it bought the remnants of Northern Rock for about £747m.

Analysis:
By Kevin Peachey, personal finance reporter

Nimbleness and the ability to attract customers through new technology have been seen as challenger banks' main attributes.

That is why the Open Banking scheme – opening traditional accounts to specialist services from smaller players – appeared to be a potential game changer for fintechs and banking upstarts.

But the TSB fiasco may well have damaged consumer confidence in these companies being able to provide more customer-friendly tech than the big banks.

With this deal, the focus shifts to a more traditional form of competition – growing a business to a sufficient size to take on the incumbents at their own game.

Key figures

CYBG

2.8 million customers
169 branches
£2.6bn market capitalisation
Virgin Money

3.3 million customers
74 branches
£1.5bn market capitalisation

Competitor of scale'
CYBG said the takeover would “bring together the complementary strengths of two successful challenger banks to create the UK's first true national competitor to the large incumbent banks”.

Its chief executive, David Duffy, told the BBC's Today programme: “We're going to become a competitor of scale.”

He added that “technology and agility” were the factors that would decide the future of banking.

“I think we have sufficient scale – the brands, the product and the technology,” he said.

“We can be agile enough to deliver a much better deal for the customer.”

Mr Duffy will retain his current position in the combined group, as will CYBG chairman Jim Pettigrew.

Virgin Money chief executive Jayne-Anne Gadhia has agreed in principle to stay on as a consultant for a limited time after the deal goes through.

 

 

Trump imposes steel tariffs as trade war looms

(qlmbusinessnews.com via bbc.co.uk – – Fri, 1 June 2018) London, Uk – –

Europe, Canada and Mexico are planning retaliatory moves after President Trump imposed tariffs on steel and aluminium imports to the US.

The European Union issued a 10-page list of tariffs on US goods ranging from Harley-Davidson motorcycles to food products.

It also plans to challenge the move at the World Trade Organization.

Mr Trump claimed the tariffs would protect US steelmakers, which were vital to national security.

French President Emmanuel Macron called Mr Trump to tell him the tariffs were “illegal” – a term echoed by Bernd Lange, chair of the European Parliament's international trade committee.

The MEP hoped a trade war could be avoided but warned that Mr Trump's action demonstrated the US president was “not willing to stick to the rules”.

Germany's Economy Minister, Peter Altmaier, hoped a decisive EU response would make Mr Trump reconsider his decision.

UK International Trade Secretary Liam Fox said the 25% levy on steel was “patently absurd”, adding: “It would be a great pity if we ended up in a tit-for-tat trade dispute with our closest allies.”

Barry Gardiner, the Labour shadow trade secretary, told the BBC's Today programme the US measures were “based on a lie”, adding the UK should not be “bullied by the president … we believe in a rules-based system and Trump doesn't”.

Gareth Stace, head of trade body UK Steel, said the tariffs were “no way to treat your friend” and called on the government to safeguard the industry's 31,000 jobs.

Justin Trudeau, the Canadian Prime Minister, said the US move was “totally unacceptable” and rejected the claim that his country posed a national security threat to America.

Canada plans to impose tariffs of up to 25% on about $13bn worth of US exports from 1 July. Goods affected will include some American steel, as well as consumer products such as yoghurt, whiskey and coffee.

Mexican Foreign Minister Luis Videgaray said his country was planning new duties for imports of steel, pork, apples, grapes, blueberries and cheese from the US.

Opposition to the tariffs was also voiced by prominent Republicans. House Speaker Paul Ryan, the most influential Republican in Congress, said the move “targets America's allies when we should be working with them to address the unfair trading practices of countries like China”.

What do the US tariffs mean?

Mr Trump first announced plans for the tariffs in March, but granted some exemptions while countries negotiated.

On Thursday, US Commerce Secretary Wilbur Ross said talks with the EU, Canada and Mexico had not made enough progress to warrant a further reprieve, meaning tariffs of 25% on steel and 10% on aluminium have now come into effect.

They apply to items such as plated steel, slabs, coil, rolls of aluminium and tubes – raw materials that are used extensively across US manufacturing, construction and the oil industry.

Mr Ross said the president had the authority to lift the tariffs or alter them at any time, leaving room for “flexibility”.

“We continue to be quite willing and indeed eager to have discussions with all those parties,” he said.

Canada, Mexico and the EU together exported $23bn (£17bn) worth of steel and aluminium to the US in 2017 – nearly half of the $48bn of total steel and aluminium imports last year.

European firms have said they fear lower US demand for foreign steel will divert shipments to Europe.

Analysts at IHS Markit expect the effects to be distributed across a wide range of markets, limiting the effect on steel prices outside the US.

That leaves America to bear the brunt of the economic impact, which economists say will appear in the form of higher prices and job losses – as many as 470,000 by one estimate.

Steel prices in the US have already risen due to the uncertainty and may increase as the tariffs hit imports.

Consumers outside the US could see prices of some goods fall, while those in America may end up paying more.

 

 

Vodafone to pay €18.4bn in Liberty Global cable networks deal

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(qlmbusinessnews.com via bbc.co.uk – – Wed, 9 May 2018) London, Uk – –

Vodafone will pay €18.4bn (£16.1bn) for cable networks in Germany and eastern Europe owned by US firm Liberty Global.

The deal will allow Vodafone to expand its mobile, TV and broadband services in Hungary, Romania and Czech Republic.

It will also create a stronger “quad play” competitor for Deutsche Telekom in Germany.

The long-expected deal with Liberty Global, which also owns Virgin Media, is Vodafone's biggest since its £112bn takeover of Mannesmann in 2000.

Vodafone said the transaction, which includes Unitymedia in Germany, would create a “converged national challenger” in the country.

Deutsche Telekom, which is Europe's biggest telecoms operator by revenue and owns T-Mobile, has voiced strong objections to the move.

Its chief executive, Timotheus Höttges, said it would distort competition: “I personally will fight for fair competition for our customers, to ensure that we do not face a disadvantage.”

He has also questioned whether regulators would approve the tie-up.

However, Vodafone chief executive Vittorio Colao said that deal “creates a strong competitor to Deutsche”.

Vodafone already owns the largest cable business in Germany after it acquired Kabel Deutschland for €7.7bn five years ago.

Unitymedia is the second-largest cable network, operating in the three of Germany's 16 states that Vodafone does not already cover.

Mr Colao said that there was “no geographical overlap” between the two businesses.

Mike Fries, chief executive of Liberty Global, said: “Even together, Liberty Global and Vodafone, whose cable networks don't compete or overlap, will be half the size of the incumbent operator. It's time to alter market dynamics by unleashing greater investment and competition.”

Vodafone offers only mobile services in Hungary, Romania and the Czech Republic, but buying Liberty's cable business will allow to expand into TV and broadband in those markets.

As part of the deal, the company will pay Liberty Global €10.6bn in cash, which the US business said would “provide significant additional flexibility to optimise growth and shareholder returns”.

Vodafone has also agreed to a €250m break fee if the acquisition does not complete.

Shares in Vodafone rose 1.2% to 210.1p in morning trading in London.

 

 

BP annual profits soar to £4.4bn on higher oil prices

 

BP/Wikimedia

(qlmbusinessnews.com via telegraph.co.uk – – Tue, 6 Feb 2018 London, Uk – –

BP has unveiled the clearest sign yet that the oil major is emerging from the gloom of the Deepwater Horizon disaster and the global market downturn, with a $6.2bn (£4.4bn) profit boom for 2017.

The FTSE 100 energy giant’s better than expected full-year results revealed strong operating cash flows, which were driven higher by the recovery in global oil prices and a 12pc growth in BP’s oil and gas business.

BP made $6.2bn in replacement cost profits, its standard measure of profitability, for the full year compared to just $2.6bn in 2016 when oil prices were at their lowest ebb. In the final quarter of last year alone BP made $2.1bn, up from just $400m in the last quarter of 2016.

BP boss Bob Dudley said last year was “one of the strongest years in BP’s recent history”, which will accelerate the momentum of the the group’s five-year plan as it enters its second year.

Brian Gilvary, BP’s chief financial officer, added that the group’s cash flows were now “back in balance” as it undertakes the start of its programme to buy back the shares it paid out to shareholders in lieu of dividends during the oil market rout.

BP spent $343m on share buy backs in the final quarter, which Mr Gilvary said more than offset the scrip dividends offered in September.

The group’s rigorous discipline on spending has brought BP’s costs down from $60 a barrel to $53 a barrel and will remain in place for 2018 to allow further buybacks, Mr Gilvary added.

But the tight reign on spending has nonetheless driven “the most activity we’ve seen in recent years if not in the history of the company”, he said.

BP is working hard to grow its production portfolio after years of austerity. It will start up five new oil and gas projects this year and also undertake “measured” investments in new energies including biofuels and electricity.

By 

 

 

Tate & Lyle’s New Boss to be former Pepsico executive Nick Hampton

(qlmbusinessnews.com via telegraph.co.uk – – Tue, 16 Jan 2018) London, Uk –

Tate & Lyle’s chief financial officer Nick Hampton, a former Pepsico executive, is set to take over as boss of the UK ingredients giant when its current chief executive Javed Ahmed steps down in April.

The company, a member of the FTSE 250, is best known as a sugar producer, despite spinning off that division in 2010. It is now focused on producing other ingredients including sweeteners, starches and fibres and has been boosted in recent years by growing demand for sugar-free alternatives.

Gerry Murphy, the firm’s chairman, today thanked Mr Ahmed for his “exceptional leadership” of the business since 2009.

He said: “During his tenure, Tate & Lyle has been through a very significant strategic, operational and organisational transformation from a largely commodity business into the high-quality global food ingredients business it is today.”

Mr Hampton joined Tate & Lyle in 2014 after a 20-year career a Pepsico, which owns hundreds of food and drink brands including Walkers Crisps, Quaker Oats and Tropicana juice.

He said: “As global demand for healthier and tastier food continues to grow, this business has the opportunity to deliver meaningful benefits for our customers, employees, shareholders, and society at large, in the years ahead.”

Mr Murphy added: “Nick has been an outstanding chief financial officer with a strong track record of driving performance, building teams and capabilities, and focusing on key customers and markets. We are confident he has the experience, energy and vision to lead Tate & Lyle through the next phase of its development.”

Tate & Lyle’s shares were flat at 691p in morning trade.

By 

 

 

Uk’s booming craft beer industry helped delivery firm APC boost profits overnight

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(qlmbusinessnews.com via telegraph.co.uk – – Fri, 25 Nov, 2017) London, Uk – –

Britain’s booming craft beer industry helped delivery firm APC Overnight post a 30pc growth in pre-tax profits to £3m last year.

Revenues at APC, which has 112 sites around the UK, crept up 0.8pc to £103m in the year to March 31 as the company moved away from so-called “heavy traffic” like white goods and carpets towards smaller parcels and packets, shipments of which have increased as online shopping has boomed.

Chief executive Jonathan Smith told The Daily Telegraph the company had seen particularly strong growth in the food and drink market.

Mr Smith said: “We’ve seen a real growth in niche beers from micro breweries. There’s more breweries in the UK than any time in the last 50 years, and lots of them have got online businesses now, which we serve.”

The number of UK breweries has soared 64pc to almost 2,000 since 2012, according to figures released by accountants UHY Hacker Young, as punters have ditched mass-produced lagers in favour of more unusual tipples.

Founded in 1994, APC is owned by 33 of its network members, local delivery companies for which it provides transportation and sorting services.

Larger logistics firms are gearing up to cope with the annual online shopping rush on Black Friday later this week, but Mr Smith said APC, which caters mostly to SMEs, does not anticipate such a large surge.

“There is a peak definitely, but lots of SMEs say do you know what, we’ve got a great service, a great product, we don’t take part in that,” Mr Smith said.

Delivery companies face an increasing struggle to cater to customers in large cities, and particularly in London, he added, as industrial space previously occupied by warehouses is converted into homes.

Mr Smith said: “We’re fairly well placed [to deal with it] but we can’t pretend conditions aren’t getting worse year-on-year.”

The industry has come under fire for its reliance on self-employed casual workers in recent years, but Mr Smith says APC and its members predominantly use employed drivers “where they can”.

By Jack Torrance

Sainsbury’s report a 9% dip in half-year profits

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(qlmbusinessnews.com via news.sky.com– Thur, 9 Nov 2017) London, Uk – –
The supermarket chain, which also owns Argos, says keeping price rises down has contributed to a fall in profits.

Sainsbury's has reported a 9% dip in half-year profits to £251m despite a 17% rise in total group sales.

The group said losses at Argos, which it bought last year and has been integrating into its supermarket offering, higher wages and investment in price at its stores took their toll on underlying performance in the six months to 23 September.

Shares were down almost 3% in early trading.

The company admitted shoppers were currently very “value conscious” but said customer growth in the period showed that efforts to tackle the challenge posed by discounters were bearing fruit ahead of the crucial Christmas trading period.

Recent figures have shown the grocery sector largely escaping sales damage in wider retail – with those operating primarily in fashion facing strong headwinds from the Brexit-linked squeeze on household budgets.

Next and M&S were two other big names reporting tougher times this month.

Sainsbury's chief executive Mike Coupe said: “We have delivered a good performance across the group in the last six months, with more customers choosing to shop at Sainsbury's in the first half than ever before.”

He added: “We continue to focus on offering our customers great value, supported by our removal of multibuys.

“Customers can shop at Sainsbury's knowing they get good value every day without having to wait for products to be on promotion.

“We are also collaborating with suppliers and working hard within our own business to reduce our costs and limit the impact of price inflation on our customers.”

 

SSE UK’s second-largest energy supplier confirms merger with Npower

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(qlmbusinessnews.com via bbc.co.uk – – Wed, 8 Nov 2017) London, Uk – –

SSE has confirmed it is merging its British domestic business with Npower to form a new energy company.

SSE, the UK's second-largest energy supplier, which also reported a big fall in its adjusted pre-tax profits of 13.9% in the six months to September, revealed the merger talks on Tuesday.

The deal knocks the country's “Big Six” energy firms down to five.

“We are very proud of what we've delivered over many years,” said chief executive Alistair Phillips-Davies.

He said the merger would allow both to “focus more acutely on pursuing their own dedicated strategies”.

The new firm is expected to be roughly the size of market leader British Gas and to serve about 11.5 million customers.

‘Innovative'

The news comes less than a month after the government published draft legislation to lower the cost of energy bills.

However, SSE retail's chief operating officer, Tony Keeling, denied that was the reason for the merger.

“We've been looking for well over a year about what we should do,” he told BBC Radio 4's Today programme. “We've listened to government regulators and customers and understand that the market needs to transform and we're absolutely committed to doing that.

“By merging SSE's retail business with Npower's retail business to form a new organisation, we think we can be more efficient, more agile and more innovative for customers.”

The deal could fall under the jurisdiction of the Competition and Markets Authority if it progresses beyond its current stage, but Mr Keeling added: “We think it is very good for competition and customers. There are over 60 people competing in the market and if you look back to 2011, there were only eight.”

Break fee

SSE's shareholders will hold 65.6% of the new company, with Innogy, which owns Npower, holding the rest.

Innogy will also receive a break fee of £60m if SSE's shareholders fail to approve the deal by 31 July 2018.

In a statement, SSE said the new firm was expected “to deliver enhanced value” and that savings in costs and combined IT platforms would “ultimately enable the company to be an efficient competitor in its markets”.

It added that no final decision on the implications for employees would be taken without talks with their representative bodies.

Mr Keeling added: “We're proud of our track record in customer service and have plenty to build on.

“But there is a huge amount of competition and we need to do more than ever to compete by providing value for money and excellent experiences for customers.

“We have an exciting opportunity to create a major new independent supplier with a single-minded focus on customers.”

Meanwhile, regulator Ofgem has welcomed SSE's announcement that its electricity networks division will make a voluntary contribution of £65.1m to consumers.

 

Arqiva and Bakkavor pull IPO plans blaming market volatility

(qlmbusinessnews.com via telegraph.co.uk – – Fri, 3 Nov, 2017) London, Uk – –

Mobile mast provider Arqiva and food producer Bakkavor have both pulled their initial public offerings on the London Stock Exchange, blaming “volatility” in the market.

Arqiva's potential £6bn float, which would have been London's biggest IPO of the year, was announced just two weeks ago.

Bakkavor, which supplies ready meals to a host of high-street retailers, revealed plans for a £1bn float last month.

In a brief statement this morning Arqiva said: “The board and shareholders have decided that pursuing a listing in this period of IPO market uncertainty is not in the interests of the company and its stakeholders, and will revisit the listing once IPO market conditions improve.”

Bakkavor said that while it has received enough interest from investors, it had decided “that proceeding with the transaction would not be in the best interests of the company, or its shareholders, given the current volatility in the IPO market”.

Arqiva has a monopoly on television and radio broadcast masts, and is Britain’s biggest independent provider of infrastructure for mobile operators, who are expected to need more and more masts as demand for data rockets.

The Telegraph reported earlier this year that Arqiva – currently owned by Macquarie and the Canada Pension Plan Investment Board (CPPIB) – was being eyed by at least half a dozen buyers.

However when this process resulted in just one offer, the company decided to opt for an IPO instead.

Despite the shift to on-demand viewing over the internet, Arqiva has reported growth in its broadcast unit because its digital terrestrial television signals are used by hybrid services such as BT TV, which combines internet-based pay-TV with Freeview. However some analysts had suggested it might struggle to convince investors that there is a long-term future in broadcast TV.

Bakkavor, owned by its Icelandic founders Agust and Lydur Gudmundsson and US hedge fund Baupost, had intended to raise £100m to pay down debt.

The Gudmundsson siblings had borrowed to fund Bakkavor’s expansion and came unstuck when the financial crisis hit Iceland’s banking system in 2008. They were forced into a debt-for-equity swap in 2010 that shrank their stake in the firm, only to team up with Baupost last year to take back control

The London IPO market appeared to getting into its stride after a lacklustre 2016 and an underwhelming start to the year. In recent months TI Fluid Systems, and Russian power producer and metals company En+ have unveiled large London IPOs.

However Dutch business outsourcer TMF announced a £1bn float and then cancelled it last month, opting instead to sell itself to private equity firm CVC.

By Jon Yeomans

BP to restart share buybacks as third quarter profits growth exceed expectations

(qlmbusinessnews.com via telegraph.co.uk – – Tue, 31 Oct 2017) London, Uk – –

BP investors sent shares in the oil major to its highest price this year after the supermajor more than doubled its profits in the last three months, driven by a five-year high in earnings for its fuels, petrochemicals and refining businesses.

The company said the profit bonanza would trigger the start of a share buyback scheme to ease the irritation of a scrip dividend put in place to help protect its balance sheet during the oil market downturn.

Bob Dudley, BP’s chief executive, said that the group had benefited from the ramp-up of three new projects in its oil production or “upstream” arm, in Australia, Trinidad and Oman.

It also enjoyed the highest earnings in five years in its oil refining, or “downstream”, business, helping to generate “healthy” earnings and cash flow, he said.

“There is still room for further improvement and we will keep striving to increase sustainable free cash flow and distributions to shareholders,” Mr Dudley added.

The return of cash payouts to BP’s patient investors caused shares to rocket higher, opening up 3pc at 522p, its highest price in seven years. The shares have since slipped to 517p, narrowly below the highest price for 2017 so far.

Brian Gilvary, BP’s chief financial officer, said the company had made strong progress in adapting to lower oil prices. BP’s finances, including the full dividend, are back into balance at an oil price just below $50 a barrel, he said.

“Given the momentum we see across our businesses and our confidence in the outlook for the group’s finances, we will be recommencing a share buyback programme this quarter. We intend to offset the ongoing dilution from the scrip dividend over time,” he added.

BP’s underlying replacement cost profit – its preferred measure of profit – more than doubled from the quarter before to $1.9bn (£1.4bn), well ahead of analyst forecasts of $1.58bn. In the second quarter of this year BP’s profits were just $684m, and in the same quarter last year they were $933m.

The better than expected results were supported by strong earnings growth in fuel and lubricant sales as well as a doubling in earnings from its petrochemicals business. Oil majors are increasingly focusing on refining crude to create the chemical building blocks used in manufacturing plastics, where demand is expected to boom in the coming years, as opposed to declining demand for petrol in cars.

On a pre-tax basis BP’s profits reached $1.56bn, again more than double that of the previous quarter’s $710m, and a swing from a pre-tax loss of $224m for the third quarter in 2016.

But Biraj Borkhataria, an analyst at RBC Capital, said the better than expected earnings had failed to translate to cash flow growth.

BP’s underlying cash flow was $5.2bn, excluding a $564m charge for the Deepwater Horizon disaster, compared to forecasts for cashflow over $6bn.

At the same time BP’s net debt at the end of September climbed to $39.8bn, compared to $32.4bn a year ago. This drove the overall ratio of net debt to earnings up to 28.4pc from 25.9pc a year ago.

Mr Borkhataria added that the share buyback could be viewed “as a sign of confidence” in BP's longer term cash generation.

By Jillian Ambrose