Billionaire Teddy Sagi's software group Kape Technologies has inked a deal to buy a major virtual private network provider for almost $1bn.
London-listed Kape will pay around $936m in a combination of cash and shares to acquire ExpressVPN in what is set to be the largest deal for a British tech firm in recent years.
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Kape will pay $354m in cash when the deal closes and the equivalent of $237m in shares, which can be sold after a 24-month lockup, the company said in a statement on Monday.
Another $345m in cash will be paid in two instalments, 12 months and 24 months after the close. The deal still needs approval from regulators.
Kape chief executive Ido Erlichman said it will complement the company’s cybersecurity tools to help users “protect their data and rights".
06:05 PM
Wrapping up
That is all from us today - here are some of our top stories:
Andrew Neil has resigned as chairman and presenter of GB News in the wake of a bitter rift with senior management and the board, reports Ben Woods.
The former Sunday Times editor and BBC interviewer confirmed weeks of speculation over his future by announcing he was stepping down from the fledgling broadcaster.
The Telegraph revealed at the beginning of September that Mr Neil was expected to quit GB News after relations with chief executive Angelos Frangopoulos suffered a total breakdown over the direction of the company.
Mr Frangopoulos is understood to be mulling a plan to remodel GB News along the lines of opinionated American television channels such as Fox – a proposal thought to have been strongly resisted by Mr Neil.
04:54 PM
Energy sector helps FTSE 100 rebound
The FTSE 100 bounced back somewhat from last week's troubled performance as housebuilders and oil majors notched up a strong Monday.
The index closed at 7,068.43, up 39.23 points compared to Friday's score, a 0.6pc rise.
"European markets have got off to a positive start to the week, with the energy sector helping to push the FTSE 100 back up towards the 7,100 level, with BP and Shell outperforming, as power prices surge across Europe, although it still remains some way short of reversing the losses of last week," said CMC Markets analyst Michael Hewson.
Chris Beauchamp, chief market analyst at IG, said: "To all intents and purposes, it seems like we have the beginning of another market rebound.
"What might be different this time is that we are in one of the most difficult periods for stocks, September-October usually seeing movement, but of the fleeting kind.
"Huge sell-offs are relatively rare, but even if the next few weeks follow the usual pattern stocks might find themselves able to avoid major losses, but find it equally difficult to make much headway."
Royal Mail sat at the top of the index after a report over the weekend that it has agreed a deal with Amazon over a click-and-collect parcel service.
04:22 PM
Kape lines up mammoth software deal
Here are more details on the huge Kape takeover deal from my colleague Ben Woods:
The cyber security firm controlled by Israeli billionaire Teddy Sagi is expanding deeper into America through a $936m (£675m) deal for data guarding firm ExpressVPN.
Kape Technologies plans to tap investors for $354m to buy the business, which has come under attack in China for offering services that allows users to bypass internet censorship rules.
ExpressVPN is one of the biggest providers of virtual private networks, an encrypted connection enabling data to be transferred without eavesdroppers viewing the content.
Revenues and profits at the British Virgin Islands based firm rose by 37pc to $279m, and 35pc to £75m for the year to December.
Express VPN has three million customers buying its premium products - 40pc of which are based across the Atlantic.
If the takeover fails to win the backing of competition authorities, the Aim-listed firm plans to use the funds to pursue other takeover targets or return the money to shareholders.
As part of the deal, ExpressVPN's management team and 290 staff will join Kape, which expects to find cost-savings of $19m next year and $30m annually from 2023.
Mr Sagi launched Kape after buying tech start-up Crossrider in 2012 and floating it as an advertising technology company on Aim.
He overhauled its management team four years later and changed the name to Kape to focus on cybersecurity.
The entrepreneur, who splits his time between Tel Aviv, London, Berlin and Cyprus, founded Playtech, the gambling technology company, and controls London's Camden Market through his investment vehicle Market Tech Holdings.
04:00 PM
Kape Technologies to buy ExpressVPN for $936m
Kape Technologies, the software group led by billionaire Teddy Sagi, is splashing out almost $1bn to snap up one of the world's best-known virtual private network providers.
The FTSE 100 company has agreed to pay around $936m to ExpressVPN's founders in a mixed cash and stock deal.
The transaction, which still needs to be cleared by regulators, would be one of the largest British tech deals in recent years.
The takeover of British Virgin Islands-based ExpressVPN will add around 6m users to Kape's customer base and expand its tools for private web surfing.
"In acquiring ExpressVPN, we are creating a business at the forefront of delivering to consumers worldwide the most advanced privacy and security solutions, empowering them to regain control of their digital lives," said Kape chief executive Ido Erlichman.
"This acquisition is directly in line with our mission to provide a privacy-first end-to-end suite of services capable of capturing the increasing demand in the digital privacy market."
Kape said it intends to raise $354m through a share placing to help fund the deal. A further $237m will be paid in shares, while the remaining $354m will be paid in two instalments, 12 months and 24 months after the deal closes.
03:43 PM
Brewdog appoints former Asda chief as new chair
Allan Leighton
Former Asda chief Allan Leighton has been appointed as non-executive chairman of Scottish brewer Brewdog, as the company prepares for a stock market listing.
Leighton will replace Blythe Jack, who was only appointed chairman four months ago and will move on to become deputy chairman.
Brewdog said Leighton will help steer the 14-year-old business through a new phase of growth, as it launches new beers and opens more bars and hotels. He will also act as a mentor to chief executive James Watt.
In an interview with BBC Scotland, Watt said: "It's going to be fantastic for me personally to have such an experienced business leader acting as a mentor to myself. Before this, I was working on a North Atlantic fishing boat. This is my first CEO role."
The appointment comes three months after former employees published an open letter claiming Brewdog had a “rotten” culture, the company's marketing campaigns were based on “lies, hypocrisy and deceit” and accused it of stoking a "cult of personality" with Watt at the heart.
Zoom moves into virtual reality with Facebook tie-up
Zoom has pushed into virtual reality in a tie-up with Facebook as the video calling app seeks to stay relevant after its pandemic boom.
My colleague James Titcomb has more details:
The company said it would integrate with Facebook’s Horizon Workrooms, the social network's service for holding office meetings in virtual reality due to launch next year.
Zoom’s shares rose by more than 400pc last year but have almost halved since last October, when they peaked shortly before news of the first effective vaccines against Covid-19.
Horizon Workrooms, unveiled by Facebook’s Oculus division last month, allows people to don VR headsets and sit around virtual conference tables, with technology that mirrors hand and mouth movements in order to make meetings feel more lifelike.
Zoom integrating with the app will allow people without VR headsets to dial in to meetings over video link. The app will also put its virtual whiteboard feature, which allows video participants to brainstorm ideas, into the virtual meetings.
Facebook has presented Horizon Workrooms as a more personal alternative to video meetings, which have led to reports of employee fatigue and are seen as a poor substitute to in-person encounters.
03:24 PM
GKN car parts factory braced for 'all-out' strike
GKN’s car parts factory in Birmingham is facing an “all-out” strike by staff as they fight its closure by parent company Melrose.
My colleague Alan Tovey reports:
The plant in Erdington, which supplies customers including Jaguar Land Rover, Nissan and Toyota, is due to shut next year with work offshored to GKN sites in Europe.
Union Unite said that the “vast majority” of the factory’s more than 500 staff will down tools from September 27, only returning to work when there is a resolution to the situation.
One union source described the continuous industrial action action on such a large scale - which came after a ballot a fortnight ago in which 95pc of members backed a strike - as “extremely rare”.
Industrial action was initially delayed as workers’ representatives tried to organise meetings with Melrose to find an alternative to closing the plant.
03:08 PM
Morgan Stanley appoints new head of dedicated crypto team
Morgan Stanley crypto - REUTERS/Andrew Kelly/File Photo
Morgan Stanley has appointed Sheena Shah to lead a new dedicated cryptocurrency unit, as Wall Street banks attempt to reinforce their positions in the sector.
Shah – who will be based in London and was previously the bank's Head of G10 Foreign Exchange (FX) Strategy forEurope – will research cryptocurrencies’ impact on equities and fixed income worldwide.
“The launch of dedicated crypto research is in recognition of the growing significance of crypto currencies and other digital assets in global markets,” Morgan Stanley’s David Adelman, Juliet Estridge and Vishy Tirupattur said in a memo seen by Bloomberg.
Bank of America also created a dedicated cryptocurrencies research team earlier this year, while JPMorgan Chase & Co and Goldman Sachs have both started offering crypto-futures trading.
03:01 PM
Cryptocurrencies fall on 'inauthentic' Walmart report
Major cryptocurrencies slid today after Walmart said reports it had agreed to partner with Litecoin were a hoax.
Globe Newswire released a statement this afternoon saying the world's largest retailer had agreed to accept Litecoin payments, sending shares in the digital coin up by as much as a third. Other cryptocurrencies also gained ground.
But the gains were reversed after a Walmart spokesperson said the statement was "inauthentic".
The dollar has risen to a two-week high as expectations mount that the Federal Reserve will begin to wind down its stimulus measures, writes James Warrington.
The dollar index earlier rose to 92.89, its highest level since 27 August, ahead of a flurry of US economic data due out this week.
Investors will be looking to the statistics, beginning with US consumer price index data on Tuesday, for indications of economic progress ahead of the Fed meeting next week.
“The dollar is off to a quick start to the week on expectations that US data this week, while likely mixed, could cement the case for the Fed to taper stimulus next quarter,” said Joe Manimbo, senior market analyst at Western Union Business Solutions.
He added that stubbornly high inflation would add to tapering expectations.
Gains for the greenback took their toll on sterling, although the pound has recovered slightly from earlier - now down around 0.04pc against the dollar at $1.3832.
02:40 PM
China to consolidate sprawling EV industry
A worker with car batteries at a factory for Xinwangda Electric Vehicle Battery, which makes lithium batteries for electric cars - AFP/STR
China today pledged to consolidate its electric vehicle industry, as the crowded market place comes into focus as Beijing continues its crackdown on industry.
“Looking forward, EV companies should grow bigger and stronger. We have too many EV firms on the market right now,” Xiao Yaqing, the minister for industry and information technology, said at a press conference in Beijing today.
“The firms are mostly small and scattered,” he said. “The role of the market should be fully utilised and we encourage merger and restructuring efforts in the EV sector to further increase market concentration.”
Shares of Chinese electric-vehicle makers fell Monday. Xpeng declined 2.3pc in Hong Kong and Li Auto dropped 1.4pc. On mainland exchanges, BYD slid 1.8pc and BAIC BluePark New Energy Technology slumped 4.6pc.
“This has been a liability for the local players since the beginning: too many companies dividing the market, which fragments the supply chains for the core components,” Bill Russo, founder and chief executive officer of Shanghai-based advisory firm Automobility told Bloomberg.
“It’s imperative to concentrate on a few key manufacturers and suppliers of the ingredients of an EV.”
The focus on moving the EV industry to a more sustainable footing comes as China shakes up industries from tutoring to property to big-tech.
Chinese property giant Evergrande today said it is facing "unprecedented difficulties" but denied it was about to go bankrupt as it battles to defuse an investor backlash.
The Hong Kong-listed developer has racked up a mountain of debts totalling more than $300bn after years of borrowing to fund its rapid growth.
But the company was downgraded by two credit agencies last week and its shares have tumbled to below their 2009 listing price.
Videos circulating on social media today appeared to show investors protesting in several Chinese cities, including outside Evergrande's headquarters in Shenzhen.
"The recent comments that have appeared online about Evergrande's restructuring are completely false," the company said in a statement on its website.
It added that the company "is indeed facing unprecedented difficulties at the moment, but it will firmly carry out its main corporate responsibilities, fully dedicate itself towards the resumption of work and industry".
01:45 PM
Democrats set to propose 26.5pc corporate tax rate
US President Joe Biden tax
US Democrats are reportedly set to propose raising the country’s top corporate tax rate to 26.5pc – lower than President Joe Biden’s original ambitions.
While the proposed increase is a sharp hike from the current level of 21pc, it’s below the 28pc that Biden sought.
The top rate of capital gains tax would rise from 20pc to 25pc – below the 39.6pc proposed by the President, Bloomberg reports.
The scaled back targets come as Democrats look to improve their chances of passing a major package of social spending.
Under draft proposals, new taxes on cryptocurrency and tobacco would be used to help fund Biden’s $3.5 trillion economic plan.
Democrats are also proposing a 3pc surtax on individuals with adjusted gross income of more than $5m.
01:36 PM
Wall Street opens higher
US stocks opened in positive territory this afternoon as investor optimism returned following a bruising week of losses.
The Dow Jones gained 0.2pc while the Nasdaq ticked up 0.6pc. The benchmark S&P 500 was 0.4pc higher.
It comes after Wall Street suffered its worst week in several months amid concerns about slowing economic growth and a potential tapering of stimulus measures.
01:08 PM
Coinbase to raise $1.5bn through bond sale
Coinbase is set to raise $1.5bn through a bond sale as the cryptocurrency exchange looks to bolster its balance sheet.
The US company said the capital raise would be used to fund general corporate purposes, including investments in product development and potential acquisition opportunities.
Coinbase, which listed on the Nasdaq earlier this year, ended the second quarter with $4.4bn in cash and cash equivalents and about $1.5bn in non-current liabilities.
The company is facing tough competition from a string of new and upcoming entrants to the market, such as FTX.US and Bullish, whose backers are flush with cash. Bullish, due to launch later this year, is expected to be bankrolled with $10bn in funding.
12:59 PM
Bidders serve up £4bn offer for Unilever tea brands
Private equity giant Advent International and Singapore’s sovereign wealth fund have teamed up to table a £4bn offer for Unilever’s stable of tea brands, writes James Warrington.
Sky News reports that Advent is in talks with the country’s Government Investment Corporation (GIC) about a joint bid for the group of assets, which includes PG Tips and Lipton Ice Tea.
Unilever has already received a joint offer from Cinven and the Abu Dhabi Investment Authority, as well as interest from private equity firms including Carlyle, Clayton, Dubilier & Rice and KKR.
12:51 PM
Lunchtime update on the FTSE 100
The FTSE 100 has continued its rise today, currently up 0.7pc at 7,081.55 points.
Royal Mail Group continues to lead gains (up 3.8pc) while Pershing Square Holdings (up 3.2pc) and building materials business CRH (up 2.5pc) are laso among the top risers.
Primark owner Associated British Foods continues to lag, down 2.5pc.
12:37 PM
Czech Eurowag to go public in London
Czech payments company, Eurowag, has shunned Prague in favour of a London listing, the business said today.
Eurowag, which processes toll and fuel payments for trucks around Europe, is seeking to sell an equivalent of €200m (£170m) of new shares to fund its growth.
“We found London as the best place providing access to a diverse pool of high-quality, long-term investors understanding technology,” chief financial officer Magdalena Bartos told Bloomberg.
“London is an excellent market.”
Eurowag said - it plans to list on the London stock market, with a planned sale of 200 million euros ($235.84 million) of new shares as well as a sell down of some existing equity. /.../ - it plans to apply for a premium listing and have a free float of at least 25%. (Reuters) https://t.co/D1YXon9rfC
Boris Johnson’s latest “self-defeating” tax raid has put Britain’s recovery in jeopardy as companies fight back after Covid, the head of the Confederation of British Industry has warned.
Russell Lynch reports:
Tony Danker, director-general of the lobby group, said the economic bounceback is likely to be short-lived if investment is discouraged by the Prime Minister’s £36bn assault on companies and households to fund the NHS.
He also urged ministers to spare businesses from further punishment as they confront a “jaw-dropping” rise in corporation tax to 25pc, which is due to hit from 2023 after being announced earlier this year.
Mr Danker said: “After the pandemic, we in business believe that we should pay our fair share to tackle the debts of Covid.
“That is why many business leaders accepted the jaw-dropping six-point corporate tax increase announced in March.
“But there is a real risk now that the Government will keep turning to business taxes to carry the load.”
Valneva shares have plunged 45pc in Paris, after the French drugmaker said the British government is cancelling a vaccine supply contract.
The company's stock had almost quadrupled in the past year, buoyed by optimism that its inactivated vaccine - an old-school method also used for polio and hepatitis inoculations - could potentially stand up better to variants because it targets the whole virus rather than just the spike protein.
“We continue to see significant value in Valneva’s Covid-19 vaccine, but its route to market is now far less clear,” Max Herrmann, an analyst at Stifel, told Bloomberg.
“The news comes as a real surprise since the UK helped Valneva to fund development of the vaccine candidate as well as the manufacturing site extension,” Jean-Jacques Le Fur, an analyst at Bryan Garnier, wrote in a note.
In the statement, the company said it had “worked tirelessly, and to its best efforts” to meet the agreement and that it will step up its efforts to find other customers.
Prime Minister Boris Johnson’s spokesman, Max Blain, declined to comment on why the contract has been cancelled, telling reporters that he’s “restricted” in what he can say because the matter is commercial.
11:55 AM
Number of new homebuyers soars as market continues to grow
The number of people seeking to buy a new home has soared in a sign that the housing market remains buoyant as the stamp duty holiday comes to an end, reports Oliver Gill.
He writes:
Around 24pc more people registered with Knight Frank as prospective new buyers in August than the five-year average, the agent said.
The number of offers made in the month was almost a third higher than normal levels, even though ministers cut back the savings on offer from the stamp duty holiday in June.
House prices rose 7.1pc in August, mortgage lender Halifax said last week – a significant increase, but less than the 7.6pc rise recorded in July, and the weakest reading for five months.
Getir funding tops $1bn for the year after latest cash boost
Getir couriers in the UK - Getir
Rapid grocery delivery app Getir has now raised more than $1.1bn this year alone after securing fresh capital from an existing investor, writes James Warrington.
Bloomberg reports that the unnamed investor will increase their stake in Getir in exchange for $150m in fresh funds.
The Istanbul-based company will reportedly use the funds to expand in Turkey and abroad.
Getir, which promises grocery deliveries in 10 minutes, competes with rivals such as Weezy, Dija and Gorillas in the rapidly-growing speedy delivery market.
It launched in the UK in February and saw its valuation nearly triple to $7.5bn after its latest fundraising round.
11:31 AM
Sainsbury's latest supermarket to shut on Boxing Day
Britain's second largest supermarket group, Sainsbury's, said today it will keep all its stores shut on Boxing Day this year, to reward staff for the year they have spent wrestling with the coronavirus.
"The decision to keep all stores shut has been made in recognition of the extraordinary efforts of colleagues throughout a challenging 18 months, since the start of the pandemic," Sainsbury's said.
Last month, Morrisons and Marks and Spencer also said they would keep stores closed on Boxing Day this year.
11:22 AM
Covid drives down UK household spend by £100 per week
UK households slashed their weekly spending by an average of more than £100 per week during the pandemic, new data has revealed, reports James Warrington.
The average spend dropped by £109.10 – or 19pc – in the year to March 2021 as lockdowns and stay-at-home orders took their toll. At the height of the first lockdown last spring more than a fifth of usual household spend was largely prevented.
The figures, published by the Office for National Statistics, showed that higher income families saw a larger drop in spending than lower income households. This was due largely to an increased tendency to travel pre-pandemic and higher chances of being allowed to work from home.
But for some households the reduction in spending may have been associated with a fall in income. Around a third of workers saw their income fall in the last financial year, rising to 42pc for those on the lowest incomes.
Weekly household spending fell by more than £100 on average during the #COVID19 pandemic.
US stock futures are climbing this morning in New York, following the S&P 500's worst weekly performance since February last week.
Stocks are rebounding on investors optimism that the Federal Reserve and the government will continue stimulus measures. They will be also closely watching tomorrow's US inflation data for clues about the future of the Fed's monetary policy.
Contracts on the S&P 500 and Nasdaq 100 advanced more than 0.5pc, after the indexes ended last week in the red.
Dow Futures also surged 0.6pc.
11:03 AM
Epic to appeal after US judge ruled that Apple's control of app store is not monopolistic
Epic Games CEO Tim Sweeney - Philip Pacheco /Getty Images North America
The video game giant behind Fortnite has vowed to challenge a ruling that Apple does not exert monopoly power over mobile games companies, despite the court forcing changes to the iPhone maker’s multi-billion dollar App Store, reports my colleague James Titcomb.
Epic Games has filed papers saying it plans to appeal Friday’s ruling in a California court, which stopped short of measures requiring Apple to allow alternative app stores and cleared it of breaking US monopoly law.
Although the court ordered Apple to lift a ban on apps directing iPhone users to alternative payment sources, potentially costing it billions in app fees, Apple has seized on the ruling as a victory.
The tech giant is yet to say how it will respond to the order, which it has 90 days to implement.
Epic sued Apple last year, claiming the company operates an illegal monopoly, after Fortnite was booted off the App Store for attempting to bypass Apple’s in-app payments system. Apple requires apps to use in-app payments for purchases of digital goods, such as ebooks and game upgrades, and the system has become controversial for charging fees of up to 30pc, which critics liken to a tax.
Epic had sought to force Apple to allow alternative app stores onto the iPhone and to allow alternative payment methods within apps. Friday’s injunction, meanwhile, could lead to Apple allowing apps to link to an external website to make purchases, a more convoluted process that could lead many consumers to stick with Apple’s payments system.
Tim Sweeney, Epic’s chief executive, had blasted the ruling, saying it “isn’t a win for developers or consumers”, and said that Fortnite will only return to iPhones when it can offer payments within the app, not through linking to a web page.
Apple has not yet said if it plans to appeal the injunction forcing it to relax its App Store rules.
10:50 AM
Royal Mail leads FTSE risers
Royal Mail led the FTSE 100 this morning following reports the Post Office has inked a deal to deliver packages for Amazon, reports James Warrington.
Shares pushed 3.6pc higher to around 490p, with trading volume triple its average for this time of day.
It follows reports that the Post Office has signed a click-and-collect deal with Amazon, offering pick-up and drop-off services for the ecommerce giant’s customers.
The arrangement, which will be launched nationally next year, comes after six months of successful trials in 200 post offices, according to the Times.
The Post Office continues to act for Royal Mail, but is now free to ink deals with third-party delivery firms after a longstanding exclusivity agreement came to an end this year.
10:44 AM
Tesco launches reusable packaging pilot
One of Tesco's new Reuse stations, powered by Loop - PA /Tesco
Supermarket group Tesco launched a trial today allowing shoppers to buy products in reusable packaging.
In partnership with reusable packaging platform, Loop, customers in 10 Tesco stores in eastern England will be able to buy products in reusable packaging that can be returned to stores when finished so it can be cleaned, refilled and used again.
A refundable deposit, starting at 50p, is paid on each reusable product. If the customer returns the packaging to the store, the deposit is refunded via an app.
A range of 88 products will be offered, including brands such as Unilever’s Persil laundry detergent and Radox shower gel, PZ Cussons’ Carex handwash, Fevertree drinks, Heinz ketchup, Coca Cola, Tetley Tea and Brewdog beer, as well as 35 Tesco own-brand essentials, such as pasta, rice, sugar and oil.
In June, Asda extended its trial of a refill scheme after sales of several products included in a pilot outsold packaged alternatives.
Tesco said it will add more products to its scheme throughout the year and the trial would be scaled-up if it proved popular.
10:24 AM
Heathrow rail and Tube links to be cut off on Boxing Day
Heathrow will have no rail or Tube services on Boxing Day, leaving passengers facing the prospect of travel chaos on one of the airport's busiest days of the year, reports Oliver Gill.
He writes:
Network Rail and Transport for London are planning engineering works, The Telegraph can disclose, meaning passengers will only be able to get to the airport by car or coach.
And in a further blow to passengers hoping to get away over the Christmas holidays, drivers will be stung by a £5 charge to drop off loved ones under a levy that will come into force at Heathrow next month.
Network Rail, the public body that owns tracks and stations, and TfL, chaired by the London mayor Sadiq Khan, are said to have held talks to avoid the engineering works clashing on the same day - but both sides were unable to come to an agreement.
Unused oil rigs sit in the Gulf of Mexico near Port Fourchon, Louisiana - Lee Celano /Reuters
Oil prices have surged this morning, following a Goldman Sachs forecast that crude will likely lead a rally in commodities amid strong demand and “growing scarcity” of supply.
The global Brent benchmark added 1.2pc to rise to $73.83, near the top of its recent trading range. West Texas Intermediate also added 1pc.
“The broader global oil-demand picture is showing signs of normalising on the back of rising mobility trends,” Stephen Brennock, an analyst at brokerage PVM Oil Associates, told Bloomberg.
“As OPEC+ is firmly in control of supply, and maintaining its cautious stance, the crude market should continue to tighten further in the year-end period.”
Hurricane Ida shuttered around 1.1m barrels of daily production in the Gulf of Mexico and two almost two weeks later, almost half of crude output in the key producing region has yet to resume, according to the Bureau of Safety and Environmental Enforcement.
Traders are also waiting for more import quotas for China’s private refiners, which could generate renewed purchases in the physical market in the coming weeks.
09:51 AM
British takeover wave is 70pc over, says top Jefferies banker
A flurry of takeover activity that has seen foreign buyers snap up a string of listed UK companies is 70pc over, a top dealmaker at Jefferies has said.
James Warrington reports:
Overseas buyout firms and rivals have been on the hunt for bargains in recent months, causing UK mergers and acquisitions to more than double this year to $511bn.
Supermarket chain Morrisons, aerospace giant Meggitt and drugmaker Vectura are among the major companies to receive takeover bids from foreign suitors this year.
But Philip Noblet, Jeffereis’ head of UK investment banking, said deals are becoming less attractive as British stocks’ discount to US peers has narrowed.
“There’s more to come, but the market has become more expensive,” he told Bloomberg.
While many of the deals have been led by private equity, Noblet said he expects more US trade buyers to move in on British firms.
09:44 AM
Expert reaction: Easyjet shares down 14pc
Joshua Mahony, Senior Market Analyst at IG, comments:
It hasn’t been an easy ride for easyJet investors over the past week, with the airline down 27% since Wednesday’s peak.
The airline is on the back foot once again today, with a 15pc decline in early trade coming off the back of Friday’s UBS comment that they are likely to lag behind in their recovery.
With the sector clearly under pressure over the course of this pandemic, laggards do run the risk of being swallowed up by more successful competitors.
The Wizz Air takeover attempt of easyJet does highlight how many see the airline as an easy target that is going through a tough time.
Michael O’Leary sees the need for consolidation throughout the industry, and thus smaller carriers are likely to find themselves as targets for cut-price takeover attempts as larger firms seek to scale up.
09:40 AM
UK return to the office hits 90pc of pre-Covid levels
The return to normal life has taken another step forward as the proportion of Brits going into the office rose to 90pc of pre-Covid levels last week, writes James Warrington.
The figures mark a sharp improvement on the 58pc recorded a week earlier, Bloomberg reported, citing data from Metrikus.
But the back to work push could be cast into fresh doubt today as Boris Johnson unveils a new strategy for tackling the virus this winter.
While the Prime Minister will rule out further lockdowns, he’s set to warn that fresh restrictions such as tougher face mask rules and work from home guidance will remain options if cases surge in the coming months.
09:31 AM
Gousto plans hiring spree
Timo Boldt, chief executive of Gousto - Gousto
UK meal-kit company Gousto said it is planning to double its London-based technology team by hiring 250 new high-skilled roles by the end of 2022.
The company - which achieved unicorn status after it was valued above $1bn in November - has been trying to attract talent by allowing its 1,000 office based employees to "nomadic work" abroad for up to one month each year.
Gousto, which already employees 200 people in its London tech team, is also trialling flexible hours and no minimum office days for six months.
09:21 AM
Money round-up
Here's the daily round-up from The Telegraph's Money team:
Huawei ‘infiltrates’ Cambridge University research centre
A fountain and the hall is pictured in Great Court at Trinity College, part of the University of Cambridge - JUSTIN TALLIS /AFP
Huawei has been accused of “infiltrating” a University of Cambridge research centre following revelations that most of its academics have ties to the Chinese tech giant, reports James Warrington.
Three out of four of the directors at the Cambridge Centre for Chinese Management (CCCM) have links to the company, while its so-called chief representative is a former senior Huawei vice-president who has been paid by the Chinese government, the Times reports.
Huawei’s foothold in a prominent Cambridge institution will raise further questions about the sprawling influence of the telecoms behemoth, which has been banned from building the UK’s 5G network amid concerns about its links to Beijing.
Critics warned the CCCM had been “infiltrated” by the Shenzhen-based company and called on the university to investigate.
The accusations come after it emerged 20 top British universities had collectively accepted more than £40m in funding from Huawei and state-owned Chinese companies in recent years.
Huawei said it was proud of its relationships with UK universities and that “any suggestion of impropriety is absurd”.
The ruling means that Uber drivers working in the Netherlands are covered by labour laws, newspaper Het Financieele Dagblad reported, citing the labour union that backed the lawsuit.
The Federation of Dutch Trade Unions had argued that Uber drivers are in fact employees of a taxi company - not independent contractors - so they should be granted the same pay and benefits as other workers in the sector.
The Amsterdam District Court is expected to publish its decision later today.
08:46 AM
Recruitment group jumps 7pc
Shares of recruitment group SThree have surged 6.9pc this morning, after it said it expects its full-year pre-tax profits to be "significantly above" market consensus.
The group - which includes ten recruitment brands focusing on STEM industries - said group net fees had jumped 29pc year-on-year.
The company's contractor order book also rose 41pc year-on-year thanks to "very strong growth" in its three largest countries - Germany, the USA and the Netherlands.
"Our strategy, positioned at the centre of the secular trends of STEM and flexible working, alongside a strengthening staffing market, has contributed to this strong performance," said chief executive Mark Dorman.
08:36 AM
Heathrow slides to Europe's 10th busiest airport
a plane landing at Heathrow airport in London - Steve Parsons /PA
Heathrow has lost its pre-pandemic title as Europe's busiest airport and has now dropped to 10th place, as it notes rivals in Paris and Frankfurt are staging a faster recovery.
The airport blamed the government's current traffic light system which it said was "handing rivals a competitive advantage while the UK loses market share."
It said passenger numbers remain 71pc down in August, compared to the same month pre-pandemic.
Heathrow chief executive, John Holland-Kaye, said:
The Government has the tools to protect the UK's international competitiveness which will boost the economic recovery and achieve its Global Britain ambitions. If Ministers fail to take this opportunity to streamline the travel rules then the UK will fall further behind as trade and tourists will increasingly by-pass the UK.
08:27 AM
Airlines’ debt hits $340bn
Airlines' outstanding debt has leapt 23pc since 2020 to $340bn (£246m) as the industry battles to survive the coronavirus pandemic, according to data compiled by Bloomberg.
The data shows the travel industry faces a bumpy road ahead, with many border restrictions still in place as countries try to keep the highly contagious Delta variant out.
“The spread of the Delta variant may lead to other countries imposing tougher quarantine rules on visitors,” said Susannah Streeter, a senior investment and markets analyst at Hargreaves Lansdown.
EasyJet and Japan Airlines announced new fundraising plans this month to help them weather the prolonged pandemic.
EasyJet raised $400m of new debt along with £1.2bn in stock, while Japan Airlines secured almost 300 billion yen in fresh funding via subordinated bonds and loans.
08:15 AM
Pound dips as dollar strengthens
The pound has dipped against the dollar this morning, after the greenback stengthened on expectations that the Federal Reserve could taper its stimulus sooner rather than later despite a surge in coronavirus cases.
"The U.S. dollar's recent rebound has coincided with more hawkish comments from Fed Presidents," FX analysts at MUFG said in a note.
The pound fell 0.2pc against the dollar to $1.3812.
Against the euro, the pound was also down 0.07pc at 0.8532p.
07:55 AM
City confidence surges on hopes Britain will rip up Brussels rules
Canary Wharf - Ian West /PA
City firms are bullish about London’s future as a global finance hub amid growing hopes there will be a post-Brexit bonfire of red tape, according to a new report.
Oliver Gill reports:
More than two-thirds of financial institutions believe London will not be toppled as a result of leaving the European Union, according to an annual survey of bosses by Lloyds.
Meanwhile, almost half of respondents think that UK financial services’ competitiveness will improve as Britain ditches Brussels regulations in favour of its own model.
The results suggest growing optimism over the country’s post-Brexit freedom, despite warnings before the referendum campaign that a Leave victory would prove disastrous for the Square Mile and destroy 232,000 jobs.
S4 Capital posts deeper loss after acquisition spree
S4 Capital has posted a wider pre-tax loss for the first half of the year after the digital ad firm splashed out on a string of acquisitions, writes James Warrington.
The company, run by Sir Martin Sorrell, reported a loss before income tax of £19.4m, compared to a £1m loss in the same period last year.
But gross profit jumped 49pc to £236.7m, while revenue was also up 56pc.
S4 Capital hiked its guidance for full-year gross profit for the third time this year – this time from 35pc to 40pc.
Shares were down 3.4pc in early trading.
07:34 AM
Easyjet shares plunge
An EasyJet plane taking off under heavy clouds in Geneva - FABRICE COFFRINI /AFP
Shares of Easyjet have plunged 15pc this morning, following a warning from UBS on Friday that the airline's recovery is likely to lag behind its competitors.
According to UBS, other budget carriers are likely to bounce back to pre-pandemic traffic levels earlier because they are not so focused on the UK.
It is currently trading at 578.78 - a significant drop from its 2021 high of £10.95, reached in May.
07:22 AM
FTSE risers and fallers
Financial and mining stocks are leading gains on the FTSE 100 this morning.
Standard Chartered is up 1.4pc, Antofagasta is rising 1.1pc and BHP has lifted 1.1pc.
At the other end of the index, Primark owner Associated British Foods has shed 1.3pc while British Airways owner IAG has slid 1pc. The stock has lost 12pc over the past month.
On the FTSE 250, ventilation company Volution Group was up 2.2pc while Easyjet plummeted another 15pc.
07:13 AM
First Group to launch £500m share buyback
First Group will return £500m to shareholders through a share buyback following the sale of its North American contract business, writes James Warrington.
The transport group said qualifying shareholders will be invited to tender some or all of their shares at a price to be announced at the time of the launch.
If the full amount is not raised through the buyback, any remaining cash will be returned through a special dividend.
It came as First Group said trading for the year so far had been in line with expectations, adding that there were no changes to its forecasts for the full-year.
First Bus passenger volumes have risen to 65pc of pre-pandemic levels in recent weeks, while passenger mileage in its Greyhound division have reached just over half of pre-pandemic levels.
07:05 AM
FTSE 100 opens higher
The FTSE 100 index has opened 31 points or 0.4pc higher this morning at 7,060.39.
The FTSE 250 has also inched 86 points or 0.4pc up, to 23,819.91.
07:04 AM
Babcock sells £126m stake in joint venture
Babcock has sold a £126m stake in its air-to-air refuelling joint venture as part of the defence giant’s efforts to raise cash through asset sales, writes James Warrington.
The FTSE 250 firm has agreed to sell its 15.4pc shareholding in AirTanker Holdings to Equitix Investment Management. The £126m price tag includes the repayment of shareholder loans of £31.1m.
AirTanker holdings is Babcock’s joint venture with Airbus, Thales and Rolls-Royce, which owns 14 A330 Voyager aircraft to support air-to-air refuelling, air transport and ancillary services for the Ministry of Defence.
Babcock will retain its 23.5pc stake in AirTanker Services, which operates these aircraft.
The sale is part of the group’s ongoing disposal programme, which aims to raise at least £400m. Babock said the proceeds will be used to reduce net debt.
07:02 AM
Aluminium prices reach 13-year high
Aluminum reached a 13-year-high this morning in London, surging to $3,000 a ton on expectations that supply disruptions will clash with rising demand.
The metal has advanced 15pc over the last three weeks, after Chinese output fell amid an effort to reduce emissions and a coup in bauxite producer Guinea raised concerns about logistic bottlenecks of the material used in aluminum production.
“In China and increasingly in the EU, policy risk to aluminum supply is growing,” Goldman Sachs analysts said in a note released Monday, noting that EU smelters are also facing rising costs with both carbon credit and power inputs at record highs.
Aluminum climbed as much as 2.6pc to $3,000 a ton, the highest intraday level since 2008, on the London Metal Exchange.
06:52 AM
UK terminates Valneva vaccine deal
Drugs company Valneva is due to start mass manufacturing the jab at its plant in Livingston in Scotland - Michael McGurk /The Telegraph
The British government has terminated its coronavirus vaccine deal with French-Austrian biotech Valneva, over an alleged breach of supply obligations.
Britain "has alleged that the company is in breach of its obligations under the Supply Agreement, but the Company strenuously denies this," French-headquartered Valneva said in a statement.
The UK had ordered 100m doses of Valneva's vaccine, which is based on an "inactivated" version of the coronavirus itself. The company said it hoped its vaccine would be over 80pc effective.
"Valneva has worked tirelessly, and to its best efforts, on the collaboration with [the British government] including investing significant resources and effort to respond to [its] requests for variant-derived vaccines.
"Valneva continues to be committed to the development of VLA2001 and will increase its efforts with other potential customers to ensure that its inactivated vaccine can be used in the fight against the pandemic," it said.
Valneva said its Phase 3 results should be available early in the fourth quarter.
"Subject to these data and MHRA approval, Valneva believes that initial approval for VLA2001 could be granted in late 2021."
Primark sales fell unexpectedly in the fourth quarter as the "pingdemic" forced thousands of Britons to self-isolate and deterred many from making high street trips, leading to a drop in footfall.
UK like-for-like sales sank by 24pc in the first four weeks of the quarter compared to the same period pre-Covid, but improved to fall 8pc in the final month, with Primark predicting an overall drop of 17pc compared to 2019 trading.
However, a third quarter surge meant second half sales are expected to reach £3.4bn, with the brand's full-year operating profit set to surpass last year's figure after the retail chain benefited from lower labour and operating costs after reopening stores following repeated lockdowns.
Owner Associated British Foods (ABF) said Primark's operating profit margin remained "strong" despite the "lower than expected" sales of the latest quarter, while its food and sugar businesses performed well, leading ABF to raise its profit outlook for the year to the 18 September.
5 things to start your day
1) Britain poised to delay customs checks again Firms warned the controls would fuel further disruption to goods flowing across the Channel and hammer consumers with higher prices.
3) No more business taxes, demands CBI chief Tony Danker urged ministers to spare firms from further punishment as they confront a ‘jaw-dropping’ rise in corporation tax rise to 25pc.
The risk of a slower recovery from the pandemic shadowed global markets and Chinese technology stocks buckled under Beijing’s regulatory clampdown.
A Hong Kong gauge of Chinese tech names tumbled after a report that officials are seeking to break up Ant Group Co.’s Alipay. China’s online platforms have also been told to protect the rights of workers in the so-called gig economy. MSCI’s Asia-Pacific index retreated for the third time in four sessions.
Meanwhile Hong Kong's Hang Seng index sank 2.14pc over the turmoil.
"Buying the dip in China equities in this environment remains akin to catching a very sharp falling knife," Jeffrey Halley, senior analyst at trading platform Oanda, said. "Asian equity markets are starting the week on a sour note after a negative close on Wall Street. Typhoon Chanthu is bearing down on Shanghai, forcing the closure of schools, ports and flight cancellations and may mute activity on mainland markets today."
Samantha Davis, the wife of Star Wars and Harry Potter actor Warwick Davis and herself an actress, has died aged 53. Samantha co-founded the dwarfism charity Little People UK and featured in the final Harry Potter film, alongside Warwick. Warwick announced the news in a statement to the BBC, revealing she had died on 24 March.
While Western eyes are fixed on Tehran and Tel Aviv, Ukraine’s frontlines are showing clear signs of crumbling. There is a very real possibility they could crumble this summer if we do not throw the kitchen sink at Russia. Even if we do, it may already be too late for the weapons and munitions long promised by the West to save the day.
King Charles is said to have extended an olive branch to his youngest son and his wife by 'hinting' they should visit Balmoral this summer - but it could put the couple in a 'difficult position'.
We all know that drinking coffee or tea before bed is a bad idea, but it turns out there's another drink that's even worse for your sleep - and it's not what you'd expect
Meghan Markle was on hand to congratulate her husband Prince Harry and his Royal Salute Sentebale team after they won the Royal Salute Polo Cup in Wellington, Florida
Kate Garraway has taken to social media to issue a desperate plea for help after receiving 'unsettling post making demands' of her late husband Derek Draper
BBC Breakfast star Carol Kirkwood has been missing from the show this week. The weather presenter's absence comes after she shared an update on her health last week…
Meghan Markle is said to be missing "some aspects" of life in the UK and is worried that her children may grow up to "blame her" if they are "deprived" of the chance to be working royals in the UK.
Bayern Munich players were left furious with referee Danny Makkelie's decision during their Champions League quarter-final second-leg clash with Arsenal at the Emirates Stadium
The Duke and Duchess of Edinburgh's daughter Lady Louise Windsor has to follow a very antiquated rule with regards to her younger brother James, Earl of Wessex
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