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Companies press Brexit panic button in further blow to Theresa May

The scale of no-deal panic gripping major companies has been thrown into sharp focus by a series of damage-limitation announcements, as corporate Britain signalled it is running out of patience with Westminster gridlock.

Sir James Dyson, the Brexit-backing billionaire, dealt a further blow to the government by revealing he is shifting his company headquarters to Singapore in a move that drew sharp criticism.

Dyson’s decision to move his HQ out of the UK came on a day in which a series of high-profile names revealed measures to mitigate the impact of a disorderly departure from the EU:

  • P&O announced that its entire fleet of cross-Channel ferries will be re-registered under the Cypriot flag, as the 182-year-old British maritime operator activated its Brexit plans.
  • Sony confirmed it is moving its European headquarters from London to Amsterdam.

The chief executive of luxury carmaker Bentley said the company was stockpiling parts and described Brexit as a “killer” threatening his firm’s profitability.

Retailers Dixons Carphone and Pets at Home announced plans to shore up supplies in the event of chaos at British ports.

P&O, which began life as the Peninsular and Oriental Steam Navigation company in 1837, said all six of its cross-Channel ferries will be re-registered from the UK registry in Cyprus to keep EU tax benefits. The ferries include, the Spirit of Britain, the Pride of Kent and the Pride of Canterbury.

Sony confirmed it was merging its London-based European unit with a new entity based in Amsterdam that would become the new continental HQ. Sony said: “In this way we can continue our business as usual without disruption once the UK leaves the EU.”

The boss of Pets at Home, the nation’s biggest pet supplier, said his company had started stockpiling essentials – including cat food – as “we don’t want families to run out of food for their pets” after Brexit day on 29 March.

Sir James Dyson failed to appear at a media event at which his company announced the relocation of its corporate base from Wiltshire to Singapore. Dyson, who was a leading supporter of the leave campaign who urged ministers to walk away without a deal saying “they’ll come to us”, did not explain why he is taking the HQ of the firm he founded in 1991 out of the UK.

The chief executive of Dyson, Jim Rowan, said the move from Wiltshire to Singapore had “nothing to do with Brexit” but was about “future-proofing” the business. The move of Dyson’s legal entity from the UK to Singapore “will happen over the coming months”, meaning it could take place before Brexit.

The decision to leave the UK was made by Sir James together with “the executive team”, Dyson said. Sir James, who owns 100% of the company, has built up a £9.5bn personal fortune making him the 12th richest person in Britain according to the Sunday Times rich list.

A spokeswoman for the 71-year-old billionaire said he would “continue to divide his time between Singapore and the UK as the business requires it”.

His company employs 4,500 people in the UK out of a global workforce of 12,000. It said the HQ move would not affect British jobs

Rowan said moving to Singapore was part of “the evolution” of the company. When asked whether Dyson could still be referred to as one of Britain’s best success stories, he said the firm should now be referred to as a “global technology company”. When he was prime minister David Cameron hailed Dyson as a “great British success story”.

Sir James is not the first pro-Brexit billionaire to pull back from the UK since the referendum. Sir Jim Ratcliffe, the UK’s richest person with a £21bn fortune, was reported last year to be planning to leave Britain for Monaco.

Carolyn Fairbairn, director-general of the CBI, said the litany of business announcements should send politicians a clear and simple message. “A March no-deal must be ruled out immediately,” she said. “This is the only way to halt irreversible damage and restore business confidence.”

Theresa May told business lobby groups on Tuesday that she was refusing to rule out a no deal as she tries to persuade reluctant MPs to back her Brexit plan by arguing that the only way to avoid crashing out of the EU is to sign up to her proposals. That amounted to a rebuke to the chancellor, Philip Hammond, who suggested last week that a no-deal Brexit would be taken off the table in another conference call with 330 corporate executives.

 

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Merger growth drives Grant Thornton International to record £4.3bn revenues

Grant Thornton International reported record revenues of $5.45bn (£4.28bn), lifted by income expansion from international mergers, and strong growth in its tax and advisory arms.

The figure is up $450m on last year, representing an average growth of 9.4 per cent across the whole organisation – slightly behind the 10.7 per cent global growth at BDO, one of its chief mid-market rivals.

Peter Bodin, chief executive of the professional services firm’s international network, headquartered in the UK, said: “Our success this year is the result of a deliberate strategic focus on our core mid-market client base, and our key strategic growth markets where we want to be successful.

“Being clear on where we need to develop our capabilities, and focusing on quality in those core markets, has underpinned this performance.”

Strong mergers and acquisitions activity underpinned much of Grant Thornton International’s growth, with the firm making 24 deals with 10 other companies. Mergers in Japan and South Africa drove revenue increases of 18.7 per cent and 54.7 per cent in Asia and Africa respectively. Average growth in Europe stood at 7.7 per cent.

The US remained its biggest market, generating $2.5bn in fee income, followed by $1.5bn in Europe.

“It’s great to see our firms from markets across the globe flourishing as we continue to build a sustainable next-generation professional services organisation,” said Bodin.

Across its service lines, tax grew by 14.8 per cent, and advisory by 10.4 per cent.

Full results for Grant Thornton’s UK operations have not yet been released. The firm is currently the UK’s fifth-largest auditor – behind global giants the Big Four – Deloitte, EY, KPMG and PwC – but is set to lose that title after the impending merger of sixth-place BDO UK with Moore Stephens.

 

Read More – www.cityam.com

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Mike Ashley in talks over rescue bid for struggling HMV

Mike Ashley is considering a rescue bid for HMV, the music and film retailer that collapsed into administration last month.

The Sports Direct boss is understood to have held talks with suppliers to the ailing business about a rescue deal, which could see him link the HMV brand to other parts of his high street empire including House of Fraser, Sports Direct or potentially Game Digital, in which Sports Direct owns a 25% stake.

A successful deal for HMV’s 125 stores would see Ashley grab another major slice of the high street following Sports Direct’s acquisition of the bike specialist Evans Cycles in October and department store chain House of Fraser in August, both of which were bought out of administration.

While Ashley takes a look at many potential retail deals, and Sports Direct holds stakes in multiple high street chains including the struggling French Connection and Debenhams, ‎sources told Sky News – which first reported Ashley’s interest in HMV – that he was serious about buying the music retailer.

Ashley has also made clear his interest in Debenhams, which is seeking to refinance its debts by the end of this month after a torrid 2018. Ashley has offered to bail the department store chain out with a £40m loan on terms that would give him the whip hand over the company, in which Sports Direct already owns a near 30% stake.

 

Read More – www.theguardian.com

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Snoop Dogg aims for another VC hit with Klarna deal

Snoop Dogg has always been someone with his mind on the money and the money on his mind. However, in his latest VC move, he’s swapping cold hard cash for online payments by becoming a shareholder in Swedish unicorn Klarna. Snoop, aka Calvin Broadus, will also front the company’s “Smoooth Dogg” advertising campaign.

Klarna, which offers payments services for around 100,000 merchants in 14 countries, is backed by investors including Sequoia Capital and Atomico. The fintech company raised $250 million from Permira in 2017 at a $2.5 billion valuation.

Young, wild and VC

The deal adds another unicorn to the stable of the American rapper (pictured with Klarna CEO Sebastian Siemiatkowski), one that already boasts some impressive names.

Indeed, Snoop managed to score a couple of hits five years ago with investments into online aggregator Reddit and personal investment startup Robinhood. According to PitchBook data, Reddit boasted a valuation of some $1.8 billion after its 2017 Series C, while Robinhood chalked up a $5.6 billion valuation after its $363 million Series D last year.

Elsewhere, Snoop’s own venture firm, Casa Verde Capital, closed its debut fund on $45 million last year, targeting seed and Series A deals in the cannabis industry. The VC co-led a $50 million round with Tiger Global Management into cannabis regulatory startup Metrc in October.

Rappers venture into investing

Rap musicians and venture capital have been an increasingly common combination this past decade, with Snoop being one of many artists to have put their money where their mouth is—and for some, this has led to gargantuan exits. Take Amazon’s acquisitions of Ring and PillPack last year, for example, with both deals said to be in the region of $1 billion each. An early investor in both these startups was QueensBridge Venture Partners, the venture firm of Nasir Jones, aka rapper Nas. QueensBridge backed Ring during its 2014 $4.5 million Series A, with last year’s exit reportedly earning him a cool $40 million.

 

Read More – www.pitchbook.com

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Tesla layoffs add to Elon Musk’s woes

Within the past two weeks, three different companies created by Elon Musk have parted ways with portions of their staff—although the cuts were much less severe at one of the billionaire’s offspring.

Last Friday, Musk announced in an email to workers at Tesla that the electric automaker would be laying off about 7% of its staff; the same day, Musk’s The Boring Company tunnel-building startup fired five employees for performance reasons, out of about 80 overall workers. Those moves came about a week after space exploration giant SpaceX revealed plans for about 600 layoffs, or 10% of its staff, per Reuters.

The reductions at Tesla come after a 30% employee increase during the past year, per an internal email sent by Musk and obtained by CNBC. Despite now having fewer workers, Musk also wrote that Tesla must increase both the production rate and quality of its Model 3s, saying there “isn’t any other way” to be “a viable company.” The personnel changes at The Boring Company were not part of any cost-cutting move, again according to Recode.

SpaceX recently reached a private valuation of more than $30 billion, making it one of the most valuable VC-backed companies in the US, while Tesla has been publicly traded since 2010. Musk, meanwhile, has reportedly poured more than $100 million of his own cash into The Boring Company.

Together, the three companies demonstrate the stunning depth of their founder’s ambitions, his commitment to achieving them, and the strange (sometimes juvenile, sometimes illegal) ways he will go about attempting to do so. You can probably count on one hand the number of other entrepreneurs who would devote such enormous resources to moonshots like space travel, electric cars and large-scale infrastructure. But it’s difficult to imagine Richard Branson, Jeff Bezos or one of those other billionaire few attempting to fund their goals by selling flamethrowers for the everyman, or becoming entangled in a very expensive brouhaha with the SEC because they were trying to make their pop-star girlfriend laugh at a marijuana joke.

In pure business terms, though, it perhaps makes sense that companies with such unique and far-reaching goals might be more prone than some of their peers to boom-and-bust cycles of hiring and firing. No other company has ever done what Tesla and SpaceX are trying to do, so both businesses are largely building their own road maps. That said: It’s highly unfortunate that some of the detours on those maps include people losing their jobs.

 

Read More – www.pitchbook.com

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Apollo’s $15B mega-deal falls apart in final moments

It was on track to be one of the biggest leveraged buyouts since the financial crisis.

Instead, metals company Arconic has ended negotiations with Apollo Global Management over a deal the would’ve reportedly valued the business at more than $15 billion, including debt. The announcement comes after months of talks, with news emerging last week that the two sides were close to striking an agreement. Apollo reportedly offered $22.20 per share for Arconic, which manufactures aluminum and titanium products for the aerospace, energy and automotive markets.

The company’s stock (NYSE: ARNC) plummeted 16% to $17.09 per share Tuesday, dropping its market cap to about $8.3 billion.

Apollo originally beat out bids from private equity heavyweights including Blackstone and The Carlyle Group, but negotiations were complicated. The company was still dealing with fallout after cladding panels produced by its building products division caught fire in the Grenfell Tower blaze that killed 72 people and displaced more than 200 households in 2017. Arconic said in its press release that it will continue to pursue a sale of its building products business, despite facing class-action lawsuits from investors in the US, along with other potential liabilities.

In retrospect, it probably wasn’t the ideal time for Arconic to take on a huge debt burden. The Trump administration’s 10% tariffs on aluminum imports have dimmed the company’s economic outlook. Though the deal was eventually fully financed, getting a loan was hard to come by thanks to a record-long dry spell in the junk bond market, per The Wall Street Journal. Even when credit markets are stable, deals of that size aren’t very common. There have been just eight US buyouts of $15 billion or more since the financial crisis, per the PitchBook Platform.

It’s not all bad news for Apollo. The firm has reportedly reached advanced talks to purchase European packaging giant RPC for more than $3.8 billion, per The Wall Street Journal. If a deal is struck, that should ease some pressure on Leon Black’s buyout shop as it looks to deploy a record $24.6 billion buyout fund closed in 2017.

 

Read More – www.pitchbook.com

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Brexit: Theresa May’s deal is voted down in historic Commons defeat

Prime Minister Theresa May’s Brexit deal has been rejected by 230 votes – the largest defeat for a sitting government in history.

MPs voted by 432 votes to 202 to reject the deal, which sets out the terms of Britain’s exit from the EU on 29 March.

Labour leader Jeremy Corbyn has now tabled a vote of no confidence in the government, which could trigger a general election.

The confidence vote is expected to be held at about 1900 GMT on Wednesday.

The defeat is a huge blow for Mrs May, who has spent more than two years hammering out a deal with the EU.

The plan was aimed at bringing about an orderly departure from the EU on 29 March, and setting up a 21-month transition period to negotiate a free trade deal.

The vote was originally due to take place in December, but Mrs May delayed it to try and win the support of more MPs.

The UK is still on course to leave on 29 March but the defeat throws the manner of that departure – and the timing of it – into further doubt.

 

MPs who want either a further referendum, a softer version of the Brexit proposed by Mrs May, to stop Brexit altogether or to leave without a deal, will ramp up their efforts to get what they want, as a weakened PM offered to listen to their arguments.

 

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Read More – www.bbc.co.uk

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Sainsbury’s says confidence in securing Asda has not changed

Sainsbury’s, Britain’s No. 2 supermarket chain, said its belief that the competition regulator would clear its 7.3 billion pound takeover of rival Asda had not diminished since the deal was announced in April.

“It (confidence) remains exactly the same…We remain confident in the case we are making to the CMA (Competition and Markets Authority),” Chief Executive Mike Coupe told reporters.

“In that respect nothing has changed,” he said.

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Norway’s DNO raises Faroe Petroleum bid to $816 million

Norwegian oil company DNO ASA raised its bid for Britain’s Faroe Petroleum to 641.7 million pounds ($816 million) on Tuesday, lifting its cash offer to 160 pence per share from 152 pence.

Shares in Faroe, which rejected DNO’s 610 million pound hostile bid in November as inadequate and “opportunistic”, have since ranged between 140 pence and 160.8 pence.

DNO’s Chairman Bijan Mossavar-Rahmani said in a statement that while the company “does not overpay for assets”, it was in the interest of most parties to raise its offer.

The deal will be funded from cash resources and the closing date for the final offer has been set for Jan. 23, DNO said.

DNO, which has been building up a stake in Faroe since April, said its combined ownership and bid acceptances on Jan. 4 stood at 43.8 percent. It requires 50 percent of Faroe’s shareholders to back its takeover bid.

 

Faroe had no immediate comment after DNO raised its offer.

Paul Mumford of Cavendish Asset Management, who according to Refinitiv Eikon data holds 1.4 percent of Faroe and who has said DNO’s previous offer was too low, said on Tuesday that the revised offer – which he also referred to as “low-ball” – looked likely to succeed.

“For minority shareholders this may be the nail in the coffin. They are unlikely to want to stick around with DNO holding a controlling stake in the business,” he said.

Sears reaches a deal to stay alive

Analyst Teodor Sveen-Nilsen of broker Sparebank 1 Markets in Oslo said he expected the increased offer to be successful.

“Considering the fact that peers have become cheaper over the past quarter…, we believe DNO now will end up with at least 50 percent of Faroe’s share capital,” he said in a note.

 

Read More – www.uk.reuters.com

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First impressions from CES: Crypto optimism, sleeptech and the internet of anything

Did you just say bitcoin?

It’s 2019, and there is still plenty of attention around crypto, even though the space has seen a significant decrease in total market capitalization during the past 12 months. The bullish consensus here at CES is that all new technologies have historically gone through a bubble phase before reaching wide-scale adoption— such as railroads, the internet and so forth—and that crypto will follow the same path.

“Crypto is alive and well”

—Matthew Roszak, co-founder and chairman of Bloq, at CES

Aside from sideline speculation, the technology still faces many challenges, like regulation, security, scalability and latency. With tempered expectations for crypto, companies like Devvio, which just announced its new blockchain protocol Devv, are developing solutions to help solve these blockchain technology issues. Regardless of the roller-coaster development within the crypto space, bitcoin is still a great accomplishment, in which a white paper released 10 years ago has achieved over a $70 billion valuation based on market capitalization.

The internet of ANYthing

Behold this tasty-looking contribution to the world: The BreadBot

I can’t tell if we’ve reached peak IoT yet, but if an item can be categorized under the all-encompassing term of “thing,” then you can expect to add an internet connection to it. From mirrors to belts to even a bakery! (A bakery is a thing, right?)

At CES Unveiled, Wilkinson Baking Company showed off its fully automated breadmaking machine, The BreadBot. This machine takes in raw ingredients such as flour and yeast to produce direct-to-consumer fresh bread. The pitch here is that The BreadBot will be placed in grocery stores and can produce fresh bread on demand, without preservatives, in a much smaller footprint than a typical in-store bakery.

I need to get some sleep

Miku unveiled its data-focused baby monitor at CES

If there has ever been a city that never reminds you to sleep, it’s Las Vegas. Coincidentally (or perhaps not?), I have been reminded to get some good sleep everywhere I walk here at CES. I recently read “Why We Sleep” by Matthew Walker, in which the author expressed concern that society’s general lack of sleep has become a major health epidemic.

Innovators here at CES have also caught on to the latest health trend of getting awesome sleep. From rocking beds to pillows that detect and stop snoring, there is no shortage of new and creative ways to improve overall sleep health. And it’s not only for adults as well: At CES, LA-based Miku launched a baby monitor designed to analyze a baby’s sleeping and breathing pattern to provide parents with a status of their baby’s sleep health. And PE-backed SleepScore Labs, which provides an app and other products to enable improved sleep, just announced a venture partnership with Dr. Oz, SleepScore Ventures. The venture aims to invest solely in companies and products focused on sleep improvement.

 

Read More – www.pitchbook.com