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What to Watch: Bed startup dives on profit warning, Sports Direct weighs in on JD deal, and Airbnb eyes listing

Oscar Williams-Grut
Senior City Correspondent, Yahoo Finance UK
Eve Sleep CEO James Sturrock. Photo: Eve Sleep

Here are the top business, market, and economic stories you should be watching today in the UK, Europe, and abroad:

Bed startups end merger talks, Eve Sleep dives

Online bedding retailers Eve Sleep (EVE.L) and Simba have ended their merger talks, the pair have confirmed.

Eve said in a statement on Friday that its board “decided that now is not the right time to pursue the potential merger and that it is more appropriate to focus on the eve rebuild plan.”

Eve issued a profit warning alongside the update, saying that “challenging” trading due to “the uncertain economic outlook and continuing low levels of consumer confidence” means revenues are set to be between £25-27m this year. That is below sales for the last two years. The company also warned losses for the year would likely be higher than previously expected.

Shares in Eve, which had been suspended during the merger talks, fell by 36% at the open in London.

Sports Direct weighs in on JD Sports deal

Sports Direct (SPD.L) has weighed in on JD Sports’ (JD.L) proposed takeover of Footasylum, warning that a competition probe of the deal could have “wider market implications.”

The Competition and Markets Authority (CMA) announced an investigation into JD Sports’ proposed £90m takeover deal on Thursday. The competition watchdog warned that the deal could create a bad outcome for shoppers, with higher prices and less choice.

Sports Direct said in a statement on Friday that it has received legal advice suggesting “brand relationships specifically are likely to be a key focus of any Phase II investigation.”

The discount sports retailer said this could “have wider market implications beyond this transaction, as they appear to highlight the power of the 'must-have' brands and potential market-wide practices aimed at controlling the supply and, ultimately, the pricing of their products.”

“Sports Direct has consistently aimed to provide the widest range of products at attractive prices and will continue to work constructively with all of Sports Direct's third party suppliers to enhance its product offering for the benefit of its consumers,” the company said.

Nick Bubb, an independent retail analyst, said: “Sports Direct hope that the CMA will crack down on the way in which Nike and Adidas favour JD Sports with their best ranges.”

Airbnb eyes listing

Airbnb has announced plans to list on the stock market next year.

The holiday rental company said in a brief statement on Thursday that it “expects to become a publicly-traded company during 2020.” It gave no detail on the exact timing or where it plans to list.

The Silicon Valley startup was last valued at $31bn in a funding round in 2017.

Thomas Cook on the brink of collapse

Thomas Cook (TCG.L) on Friday confirmed that it was seeking an extra £200m in funding in order to stave off a collapse of the travel operator — something that could leave up to 180,000 stranded abroad and put 20,000 jobs at risk.

In a statement, the 178-year-old travel company said that discussions on the final terms of its rescue deal were continuing, including with Fosun Tourism Group, its largest shareholder.

Fosun agreed in August to inject £450m into the company as part of a £900m rescue package, though Thomas Cook must still agree on the deal with its lenders.

Thomas Cook's creditors, which include banks such as Royal Bank of Scotland (RBS.L) and Lloyds Bank (LLOY.L), have now demanded Thomas Cook secure an additional £200m in standby funding.

Sky News reported that the travel operator is holding emergency talks about a deal to sell its Nordic airline and tour operating units in an attempt to raise the cash.

Pound hits two-month high on Brexit deal hopes

The pound has hit a two-month high against the dollar, after European Commission president Jean-Claude Juncker said a Brexit deal was still possible.

Sterling has fallen in recent months as fears have grown of a damaging no-deal Brexit, but it rallied last week as the UK government talked up new proposals and Juncker’s comments late on Thursday gave investors fresh hope.

The pound extended Thursday’s gains on Friday morning, up around 0.3% to almost $1.26 against the dollar (GBPUSD=X) at around 8.30am to its highest since mid-July.

Juncker said that Britain and the EU “don’t need the backstop” if a similarly robust solution to the vexed issue of the Irish-Northern Irish border after Brexit could be found.

RBS names new CEO

Royal Bank of Scotland (RBS.L) has named Alison Rose as its new chief executive, replacing outgoing boss Ross McEwan.

Rose is currently deputy CEO of NatWest and CEO of commercial and private banking at RBS. An RBS lifer, she was widely tipped as the likely replacement for McEwan, who announced he was leaving in April.

Rose will become the first woman to lead one of the UK’s biggest banks. Jayne-Anne Gadhia was CEO of Virgin Money until its takeover last year, but no woman has run one of the traditional High Street giants RBS, Lloyds, Barclays, or HSBC.

Markets ‘not thrilling’

Global markets were quiet on Friday after a week of central bank action.

“It’s not shaping up to be the most thrilling session, in what has turned into a rather damp squib second half of the week,” said Connor Campbell, a financial analyst at trading platform SpreadEx, said. “The markets struggling for direction following the Fed’s mixed bag statement on Wednesday evening.

Britain’s FTSE 100 (^FTSE) was down by 0.1%, while the France’s CAC 40 (^FCHI), Germany’s DAX (^GDAXI), and the Euronext 100 (^N100) were all flat.

Overnight in Asia, Japan’s Nikkei (^N225) closed up by 0.1%, the Hong Kong Hang Seng Index (^HSI) was down by 0.1%, and China’s Shanghai Composite (000001.SS) was up by 0.2%

What to expect in the US

US stocks future are pointing to marginally higher opeen. S&P500 futures (ES=F) were up by 0.1%, Dow Jones futures (YM=F) were up by 0.1%, and Nasdaq futures (NQ=F) were up by 0.2%.