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Live Reporting
By Jill Treanor and Howard Mustoe
All times stated are UK
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Risk of Cobham deal being blocked ‘underestimated’
)Copyright: COBHAM
Neil Wilson , chief market analyst at Markets.com, has been looking at the announcement that the Competition and Markets Authority will look at the £ 4bn takeover of Cobham on national security grounds.
He says the risk of the government preventing the deal going through is higher than “the market is indicating.” The shares have slipped around 1%.
“This was always a risk as regulators and politicians are more sensitive to foreign takeovers, although we thought that the message from the government until now was that it was quite relaxed about this one “.
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(Cobham says to ‘assuage’ concerns)
(COBHAM)Copyright: COBHAM
A spokesperson for Cobham has responded to the announcement that Andrea Leadsom, the Business Secretary, has asked the Competition and Markets Authority to look at its £ 4bn takeover on
The spokesperson said the move was “part of the government standard transaction approval processes.
“We welcome the opportunity to clarify Cobham’s activities in the context of UK national security and to assuage the concerns that have been expressed by certain shareholders and via the media “.
FTSE opens
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The FTSE 100 is starting the day 17 points lower at 7, 302. Kingfisher is among the biggest fallers, down 1.5%, on the back of its results.
Shares in Cobham have fallen around 1% after Andrea’s Leadsom intervention in the £ 4bn takeover by Advent International.
The FTSE 250 is down 9.5 points at 20, 0
Shares in car dealer Pendragon are down 11% after it published results showing it had plunged to loss.
Sirius Minerals, which loss 50% of its value after admitting on Tuesday it was having trouble raising money to fund a fertilizer mine, has fallen again. The shares are down another 4%.
‘New class divide’
BBC presenter tweets
Asda workers strike
BBC Radio 5 Live
Wake Up To Money
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Asda staff have been protesting this week after being told to sign new contracts that require them to be flexible – or face redundancy.
And staff at two Wilkos distribution centers have said they will go on strike over what they’ve called a “brutal” weekend working rota.
One Asda worker told Wake Up To Money that he would be leaving. Asda says it is only doing what other firms are doing.
Tom Hadley, director of campaigns at the Recruitment and Employment Confederation, said: “We are in a 24 – 7 society “.
That leads to working weekends and nights. People also want flexible working he said.
“The challenge for employers is it’s hard to find enough staff to make things work. So a lot employers are working quite hard to … be seen as a great place to work. “
“We are in a candidate-driven market,” he says, as it is not easy to find workers.
How often does the government intervene?
Since the Enterprise Act was introduced in 2002 the government is thought to have made 16 interventions on takeovers. It has three grounds to refer deals to the competition watchdog: national security grounds, media plurality and financial stability.
It appears to have made nine on national security grounds, six for media plurality and once for financial stability.
That’s after the announcement that Andrea Leadsom is intervening in the Cobham takeover.
Kingfisher dragged down by IT roll-out
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Struggling DIY group, Kingfisher, which owns B&Q and Screwfix, has reported a 6.4% fall in pre-tax profits to £ 353 m for the six months ended (July) , compared to £ 377 m in the same period in the previous year.
Kingfisher said that launches of new ranges and the implementation of a new IT system caused sales to drop in France.
However, it said that its performance was boosted by rising sales in Screwfix, as well as in its Polish market.
‘Acting on official Advice ‘
Copyright: Cobham
The Department for Business Energy and Industrial Strategy says that Andrea Leadsom was acting on “official advice” when issuing the European intervention notice to intervene in the proposed sale of Cobham on national security grounds.
The department says th e Competition and Mark ets Authority “will now prepare a report on the national security aspects of the proposed transaction.
“This is a statutory process to ensure national security implications of a proposed sale are fully assessed. “
Leadsom says goal to ‘safeguard public interest’
Copyright: PA Media
Business Secretary Andrea Leadsom has issued this statement on the Cobham referral.
“Following careful c onsideration of the proposed takeover of Cobham, I have issued an intervention notice on the grounds of national security.
“As part of the statutory process, the Competition and Markets Authority will now investigate and carry out a review on the national security implications of the transaction. They must report back to me by (October) .
“The government goals are to support private sector innovation whilst safeguarding the public interest.”
(More on Cobham)
The CMA says that the decision to refer the Cobham deal to the competition authority means that “the secretary of state [Andrea Leadsom] will decide on whether the transaction operates, or may be expected to operate, against the public interest and should be referred to a phase two assessment, taking into account public interest issues. “
Cobham deal referred on ‘national security’ grounds
Copyright: COBHAM
Andrea Leadsom, the business secretary, has referred the takeover of defense company Cobham to private equity house Advent t o the Competition and Markets Authority.
The CMA says she has issued a European Intervention Notice about the deal – which was approved by shareholders on Monday – “on the public interest ground of national security, in accordance with section 67 (2) of the Enterprise Act 2002 (the
Pendragon installs executive chairman
Pendragon says its non-executive chairman Chris Chambers is stepping down on 1 October 2019 and non-executive director Bill Berman will assume, on an interim basis, the newly created role of executive chairman.
Pendragon plunges to loss
Car dealer Pendragon has plunged to a loss after a “challenging” period and will not pay a dividend.
The underlying loss in the half year was £ 32 .2m compared with a £ 28 .4m profit a year earlier.
“The principal driver of the group’s performance was the reduction in the level of used car stock to more appropriate levels, which was actively managed during the second quarter through a combination of both lower retail pricing and clearance through trade auction channels.
“These necessary actions resulted in significant losses in the period, exacerbated by market-driven reduction in used car values. “
Lloyd’s insurance market profits rise
(Getty Images)Copyright: Getty Images
The Lloyd’s of London insurance market has reported a profit before tax for the first half of the year of £ 2.3bn, up from £ 600 ma year earlier .
John Neal, Lloyd’s chief executive, said: “It is encouraging that the Lloyd’s market is showing increased discipline in 2019 as evidenced by a reduction in gross written premiums and an improvement in the attritional loss ratio for the current underwr iting year.
However, we recognize the importance of continued focus on performance management to maintain this momentum throughout the rest of 2019 and beyond. “
Pawnbroker owner says losses expected to increase
Copyright: Getty Images
The BBC has been reporting about the closure of pawnbroker A&B Pawnbrokers (Albemarle & Bond) and Herbert Brownand the concern this is causing customers.
Owner Speedloan Finance has told the BBC all its 116 stores had been closed because of “significant losses”.
The firm has said it was “exploring options available to it”
TheGuardian has a statement from its Tokyo-based parent company Daikokuya Holdings: “Since acquiring Speedloan Finance in October 2014 , the company [Daikokuya Holdings] has been working to improve its management.
“However, despite the implementation of various measures to improve management such as moving the head office, flattening the organization, and reducing the number of employees, the net profit for the year ended (March) was a deficit of £ 7m.
“Moreover given the increased likelihood that the UK will leave the EU, losses are expected to increase, so we have decided to withdraw from the UK business.”
Daikokuya does not appear to have published the statement in English, the paper said.
How will Facebook’s oversight board work?
Today Program
(BBC Radio 4)
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According to the BBC’s north America technology correspondent Dave Lee, Facebook’s new oversight board will be independent, even though the funding for it will be provided by the social network.
“This is Facebook’s attempt to essentially relieve itself of the burden of its own users, because Mark Zuckerb erg says he doesn’t think he or his company should have the power to determine what’s acceptable and what isn’t, “he told Today.
The board will not replace the existing moderation process, however.
“It will deal with issues that have exhausted themselves through the appeals pr ocess at Facebook as it exists now, “he added.
“What I suspect will happen is that the issues that are particularly in the news agenda will be the ones that go to the new oversight board. “
Facebook unveils its plan for oversight board
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Facebook has shared details on its plan to create an independent “oversight” board to make decisions over how the network is moderated.
The firm insisted the panel, which will hear its first “cases” in 2020, will have power to override decisions it makes over contentious material and influence new policy.
The idea, dubbed the Facebook supreme court, will eventually comprise 40 people around the world .
The BBC’s tech correspondent Dave Lee says the “court” will handle very few cases and Facebook still decides what gets escalated.
‘Need an outcome’ on Brexit says steel maker
BBC Radio 5 Live
Wake Up To Money
Sanjeev Gupta from Liberty Steel, which owns owns plants in the north of England and Wales as well as an aluminum smelter in Scotland, told Radio 5 Live’s Wake Up To Money that industry needs to know what is going on with Brexit.
“The whole subject is highly worrisome for everybody. Industry is suffering from the current limbo which we’re stuck in. For me the most important thing is we have an outcome quickly and decisively once and for all now, more than which outcome that is. “
That is more important than anything else, he said.
“If we have certainty we can adjust, we’re adapt,” he said, adding his business was committed to the UK . ************
Fed under Trump pressure
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Fiona Cincotta, market analyst at City Index, also spoke to BBC Radio 4’s Today Program about the US Federal Reserve and the pressure the central bank is facing from President Donald Trump to cut rates deeper and faster. The latest decision is expected later today.
“He’s completely overstepped the mark as far as independence is concerned, “she said.
The market l ikes to think that Fed head Jerome Powell is not bowing to pressure but looking for clues as to when the US central bank will cut next, she said.
South Korea hits Japan with export curbs
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South Korea will go ahead with plans to drop Japan from its so-called “white list” of trusted trade partners, the latest move in a simmering feud between the two countries.
Tighter trade regulations take effect on Wednesday and include longer permit applications for certain South Korea exports to Japan.
move is a tit-for-tat response toTokyo’s decision earlier this month to do the same to Seoul.
A long-running diplomatic dispute has evolved into a trade fight, which includes curbs on tech supplies, sparking fears over risks to the global electronics sector.
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