British satellite giant Inmarsat sold for £5.4bn as hedge funds double money – live updates
British satellite firm Inmarsat has agreed a $7.3bn (£5.4bn) takeover deal by US rival Viasat, marking the first wave of consolidation in the rapidly-growing satellite sector.
California-based Viasat has agreed to acquire Inmarsat, which provides phone and data services worldwide through its network of satellites, in a transaction consisting of $850m in cash, Viasat shares valued at roughly $3.1bn and the assumption of $3.4bn of net debt.
The sale represents a rapid profit for Inmarsat’s private equity owners – including Warburg Pincus and Apax Partners – who snapped up the company for $3.4bn in 2019.
The deal is likely to face regulatory scrutiny around the globe amid growing competition between satellite rivals, as well as heightened concerns over the sale of key British assets to foreign buyers.
12:53 PM
Wall Street set to open higher
Wall Street is poised to open higher this afternoon after US Congress passed a mammoth $1 trillion (£740m) infrastructure bill.
Major industrial firms were the biggest winners after the House of Representatives finally approved the bill after months of wrangling. President Joe Biden hailed a “once in a generation” investment.
Joshua Mahoney at IG said: “The news that Joe Biden is on the cusp of signing off a $1 trillion infrastructure package does provide a boost for industrial names that have largely enjoyed a strong third quarter in any case.”
Futures tracking the Dow Jones are up 0.2pc, while the S&P 500 and Nasdaq have recorded more modest gains of 0.09pc and 0.05pc respectively.
Bucking the positivity was Tesla, which is down roughly 4pc in pre-market trading after Elon Musk tweeted that he’d sell around 10pc of his stake if his followers approved the move. Almost 60pc of the votes backed the move.
12:17 PM
Inmarsat sold to US rival Viasat in £5.4bn deal
British satellite communications firm Inmarsat will be sold to US rival Viasat in a $7.3bn (£5.4bn) deal.
California-based Viasat said it’s agreed to acquire Inmarsat through a complex transaction consisting of $850m in cash, Viasat shares valued at roughly $3.1bn and the assumption of $3.4bn of net debt.
The deal marks a rapid exit for Inmarsat’s private equity owners. A consortium including Warburg Pincus and Apax Partners snapped up the company for $3.4bn in 2019.
It also represents a first wave of consolidation in the rapidly-growing satellite market as rivals race to roll out high-speed communication services around the globe.
Rajeev Suri, chief executive of Inmarsat, said:
Joining with Viasat is the right combination for Inmarsat at the right time. Viasat is a terrific innovator and Inmarsat brings some powerful additions: global reach, a broad distribution channel, robust business momentum and a presence in highly attractive global mobility segments.
Together, the two companies will create a new global player with the scale and scope to help shape the future of a dynamic and growing industry.
12:04 PM
Go green or become a has-been, says former energy minister
Companies that fail to ditch their fossil fuel habits and go green don’t have a future, a former energy minister has said.
Greg Barker, who is now the chairman of aluminium giant EN+, said firms that fall behind in the race to net zero will see their business models come under threat.
Speaking on the sidelines of the COP26 climate summit in Glasgow, he said: “The idea that there won’t be any collateral damage in the economy is for the birds.
“If you are a high fossil fuel-dependent business with no real way of kicking that fossil fuel dependency, you don’t have a future.”
He said that polluters should be charged around £73 per tonne of carbon they emit in developed countries as part of a global price on carbon. This would put pressure on businesses to slash their emissions.
Mr Barker added: “We need the World Bank, the IMF (International Monetary Fund) and the WTO (World Trade Organisation) to come together to harmonise that. That doesn’t mean to say that they all have to be at the same price, you can differentiate between developed and developing economies.
“But there does need to be coordination, and it does need to be coherent.”
11:49 AM
Activist Third Point ‘takes stake’ in Cartier owner
Activist investor Third Point is said to have taken a stake in Richemont, the Swiss luxury group behind brands including Cartier.
Third Point, which is run by Dan Loeb, is now engaging with Richemont, luxury news website Miss Tweed reported. US fund Artisan Partners, which holds a 1.2pc stake, is also said to have been putting pressure on the company to improve its performance.
Shares jumped as much as 5.2pc in Zurich to a new record high.
Richemont, which also owns Van Cleef & Arpels, has struggled to keep up with rivals LVMH and Kering during a recent boom in demand for luxury goods.
Mr Loeb’s Third Point has made a series of interventions at some of the world’s most high-profile companies. Last month it called for the break-up of energy giant Shell, citing conflicts over its future direction and shift to renewable energy.
11:24 AM
Phishing: Angling Direct left reeling by cyber attack
A little bit of light relief for your Monday morning now…
Fishing retailer Angling Direct has slumped 5pc after it revealed it had fallen victim to a cybersecurity incident.
The company said its website was shut down late on Friday following unauthorised activity on its network, while some of its social media accounts have also been compromised.
There are no more details on the nature of the attack, but there’s inevitable speculation from some of the FTSE’s more wry analysts…
11:05 AM
Gupta’s steel empire hit with French misconduct investigation
French prosecutors have opened an investigation into Sanjeev Gupta’s GFG Alliance on suspicions of money laundering and misuse of corporate assets, piling further pressure on the tycoon.
The probe, first reported by the Financial Times, was opened in July after public officials reported suspicious activity. The case has been handed to the French unit that fights corruption and financial crime.
Mr Gupta’s steel empire is already facing investigations by the Serious Fraud Office in relation to alleged fraud and money laundering. It’s also examining GFG’s financing arrangements with the now-defunct Greensill Capital.
Before the collapse of Greensill, France was home to a number of important GFG assets, including an aluminium smelter near Dunkirk and two steel mills.
A GFG spokesman said: “GFG is not aware of any such investigations and refutes any suggestion of wrongdoing in its French operations.”
10:46 AM
Sydney Airport poised for £13bn takeover
Sydney Airport said it’s agreed to a AU$23.6bn (£13bn) takeover by a consortium of Australian investors just days after the country opened up its borders again to international travel.
The airport’s board unanimously approved the sale to the Sydney Aviation Alliance – a consortium of infrastructure investors and Australian pension funds – and recommended shareholders vote in favour.
The Sydney Aviation Alliance tabled a bid of AU$8.75 per share after its earlier offers were rejected for being too low. If approved, it will be one of Australia’s largest ever deals.
It comes after Australia’s borders were partially reopened almost 600 days after they were effectively shut down.
Shareholders will vote on the deal at a meeting in the first quarter of 2022, with a 75pc majority required for it to go through.
10:33 AM
Abrdn rises on Interactive Investor takeover talks
Another big riser on the blue-chip index this morning is Abrdn, which confirmed it’s in talks over a potential acquisition of Interative Investor.
The vowel-shy asset manager, which is led by Stephen Bird, said it’s in discussions with JC Flowers – Interactive Investor’s largest shareholder – over a potential deal to buy the online trading platform.
Shares are up 2.7pc in morning trading.
Rae Maile, an analyst at Panmure Gordon, said the potential deal was a “sensible strategic move” as Abrdn looks to expand its presence in the UK retail wealth market.
10:23 AM
Money round-up
Here are some of the top stories from the Telegraph’s money team to kick off your week:
10:12 AM
Go-Ahead warns on ‘slight slowing’ of bus recovery
Go-Ahead has issued a downbeat trading update this morning, warning it had seen a “slight slowing” in the recovery for its regional bus services.
The transport group said passenger volumes in the division had gradually recovered to between 70pc and 80pc of pre-pandemic levels, but that the recovery had lost momentum in recent weeks.
As a result it warned there was uncertainty around the speed and extent of the recovery this year, which could impact its full-year performance.
Go-Ahead said its London and international bus division was performing well, with more than 95pc of full-year revenue already secured. Meanwhile, the group expects its rail division to operate at around break even for the current financial year.
Shares dropped 3.4pc following the announcement.
10:01 AM
Darktrace gains on ‘fear not fact’ defence
Darktrace has jumped to the top of the FTSE 100 after brokers launched a staunch defence of the cybersecurity firm, saying its recent share price plunge was driven by “fear not fact”.
Analysts at Berenberg dismissed the argument that Darktrace was underspending compared to its peers, saying this failed to take into account factors such as lower salaries for software engineers in the UK than on the US west coast.
They also argued that customer retention rates would improve as sales teams increased their focus on customer needs. Darktrace jumped more than 9pc on Monday morning.
The company’s shares went into decline last month after Peel Hunt said it was worth only half its value at the time. Since then, it’s down by more than a third. However, it’s still well above the 250p per share price given at its initial public offering in April.
09:49 AM
Crypto market smashes through $3 trillion mark
The global cryptocurrency market is now worth more than $3 trillion (£2.2 trillion), marking the latest milestone in a recent bullish run for digital coins.
The overall market cap of cryptocurrencies hit $3.01 trillion on Monday morning, according to CoinGecko pricing.
Binance Coin and Solana, the third and fourth biggest cryptocurrencies, have rising in value by more than a fifth over the last week, while all seven major tokens have made gains.
Bitcoin has jumped by almost 7pc over the last 24 hours to trade close to its recently-hit record high of $67,000.
Susannah Streeter at Hargreaves Lansdown said: “The recent surge in the crypto asset partly seems to have been caused by investors piling in, seeing it as a hedge against inflation.
“Some appear to have been enticed by the argument that the huge monetary stimulus programmes unleashed by central bank is fuelling inflation which will see the value of money decrease over time, whereas Bitcoin has a fixed limit on the number of coins which can be created.”
09:33 AM
THG rises on founder’s IPO regret
THG shares are on the rise this morning after the struggling company’s founder said he regretted listing the firm in London.
Billionaire Matt Moulding said he wished he’d floated in New York instead and said he’d keep an open mind about taking the company private.
He told GQ: “I should have IPO’d in America. That’s obvious. I didn’t do it because I wanted to do everything in Britain.”
He added: “We do have other options in terms of I’m a big shareholder, more than half of the business is owned by me and a few people that I’m close with.”
Shares are up more than 6pc this morning.
THG has lost around three-quarters of its value since the start of the year amid scrutiny over its growth prospects, as well as corporate governance concerns around Mr Moulding’s tight grip on the company.
09:22 AM
Virgin Atlantic won’t return to Gatwick until Heathrow is full
Virgin Atlantic will only consider resuming flights from Gatwick airport once its Heathrow hub is back at pre-pandemic capacity, the airline’s chief executive has said.
Shai Weiss said the company expected Heathrow capacity to reach 2019 levels by April next year.
He told Bloomberg: “After that, when demand returns for leisure travel we will probably move a bit into Gatwick, but still maintain out focus on Heathrow.”
Mr Weiss said business travel was currently at about 28pc of capacity, led by small and medium-sized businesses. Virgin expects the full return of corporate travel by 2023.
It comes as flights between the UK and US resumed on Monday, handing a major boost to airlines such as Virgin and British Airways, which rely heavily on lucrative transatlantic routes.
The two airlines performed a synchronised take-off on parallel runways at Heathrow on Monday to celebrate the reopening of the travel corridor.
09:13 AM
Sirius Real Estate to raise £135m to fund BizSpace takeover
Sirius Real Estate is planning to raise £135m through a share placing to help fund its acquisition of commercial property firm BizSpace.
The FTSE 250 company has agreed to buy Helix Investments Limited – the holding company behind BizSpace – for a cash consideration of around £245m.
The deal will be funded by a combination of new and existing debt, alongside the proceeds of the capital raise.
BizSpace, which was founded in 2000, operates a network of 72 sites, including office space, industrial units, workshops and storage.
Andrew Coombs, chief executive of Sirius Real Estate, said:
We are very happy to announce the acquisition of a high-quality and well diversified portfolio of assets, in a highly attractive and growing market.
The acquisition of BizSpace brings with it an experienced and enthusiastic management team that we believe will be a good fit with the culture of Sirius’ current management team and I look forward to building on the existing relationships between our businesses.
09:04 AM
Gas prices jump as Putin fails to open the taps
Gas prices surged this morning on signs that Russia won’t deliver the boost to supplies President Vladimir Putin had promised.
Europe’s biggest supplier had promised to send more gas to the continent starting on Monday, with Putin ordering state energy giant Gazprom to fill storage sites to help ease rising prices.
But orders via a key Russian pipeline showed shipments will remain well below normal today. There was also no extra capacity booked to send more supplies during auctions on Sunday.
UK prices are up more than 9pc, while the EU’s benchmark Dutch equivalent gained as much as 9.7pc.
08:57 AM
SoftBank posts first quarterly loss in 18 months
Japanese investment giant SoftBank has posted its first quarterly loss in 18 months due to losses on some of its biggest bets, including ride-hailing firm Didi.
The conglomerate posted a net loss of 397.9bn yen (£2.6bn) between July and September, its first net loss since the first three months of 2020. That dragged first-half net profit down 81pc to 363.5bn yen.
SoftBank has poured vast sums of money into some of the world’s biggest tech names through its $100bn Vision Fund.
But over the first quarter it racked up major losses on its investments in firms including Didi and South Korean e-commerce firm Coupang.
08:50 AM
Playtech jumps on rival takeover approach
Here’s some more on Playtech, which is the biggest market mover this morning.
The gambling software group, founded by billionaire Teddy Sagi, said it’s received a preliminary takeover approach from Gopher Investments, its second largest shareholder.
The approach could complicate a planned £2.7bn takeover by Australian slot machine maker Aristocrat.
Hong Kong-based Gopher said it’s sought more information about Playtech on which to base a potential offer. Meanwhile, Aristocrat is urging shareholders to vote in favour of their agreed deal.
Shares is Playtech jumped as much as 3.7pc in early trading.
08:37 AM
FTSE 100 risers and fallers
The FTSE 100 has inched up marginally this morning in a subdued start to the week’s trading.
Energy and mining stocks are the biggest boost to the index, while AstraZeneca is up 1.1pc after receiving a US food and drug administration (FDA) “fast track” designation for its gastritis drug.
The biggest laggard is ITV, which dipped 2.3pc, while banking stocks including Standard Chartered have also lost ground.
The FTSE 250 has dipped 0.2pc. Playtech is bucking the trend, however, gaining 2.4pc after it received a takeover offer from its second-biggest shareholder Gopher Investments.
08:32 AM
JD Sports defends car park meeting
JD Sports has hit back at accusations of misconduct after footage emerged of chairman Peter Cowgill holding a covert meeting in a car park with his opposite number at Footasylum.
The Sunday Times reports that the competition watchdog will investigate the retailer after Mr Cowgill was pictured with Barry Brown in a black Mercedes in a car park near Bury in Greater Manchester.
JD Sports has agreed a £90m takeover of Footasylum, but regulators last week said it must unwind the deal due to competition concerns.
In a statement this morning JD said it “totally refuted” claims it breached corporate governance rules.
It said Mr Cowgill and Mr Brown had known each other for over 25 years and that it was “not unusual, or in any way suspicious or illegitimate, for them to meet from time to time”, including in relation to the takeover.
08:20 AM
Defence giant BAE shrugs off supply worries
Defence giant BAE has held its financial targets for the full year as it shrugged off supply chain troubles.
The UK’s largest defence contract hailed a good performance in the year so far and said it was on track to deliver sales growth of between 3pc and 5pc, with profit expected to rise between 6pc and 8pc.
BAE said it was continuing to “effectively mitigate and manage supply chain pressures” and has so far avoided any impacts on its performance as a result.
It said it has benefited from long-lead times it uses in its programmes, to avoid disruption currently affecting rival manufacturers.
Charles Woodburn, chief executive of BAE, said:
We’re evolving our business to be well positioned for growth over the medium term alongside a focus on longer-term value drivers as we ramp up investment in advanced technologies and progress our sustainability agenda.
Our continued good operational performance underlines our confidence in the full year guidance for top line growth and margin expansion as well as our three-year cash flow target.
08:02 AM
FTSE 100 opens flat
It’s a sluggish start to the week for the FTSE 100, which has opened broadly flat.
The blue-chip index is trading up a marginal 0.03pc at 7,306 points.
07:53 AM
Tesla falls after Elon Musk’s Twitter poll
In case you missed it, eccentric Tesla founder Elon Musk has been creating waves over the weekend.
The outspoken billionaire tweeted that he would sell around 10pc of his stake in the electric vehicle giant if his followers supported the move.
The poll garnered more than 3.5m responses, with 57.9pc of people backing the sale.
Tesla’s Frankfurt-listed shares have fallen more than 7pc in early trading as investors brace for a sell-off of shares worth close to $21bn.
Much is made lately of unrealized gains being a means of tax avoidance, so I propose selling 10% of my Tesla stock.
Do you support this?
— Lorde Edge (@elonmusk) November 6, 2021
Read more: Elon Musk promises to sell $21bn Tesla stock on back of Twitter poll
07:45 AM
Regulators close in on auditors
PwC’s huge expansion comes despite greater scrutiny of auditors amid ongoing tensions between the US and China.
In September the US audit watchdog brought in new rules that will help force foreign companies to delist from stock exchanges if they flout American audit rules – a move aimed at cracking down on Chinese companies.
Meanwhile, PwC is facing an investigation by Hong Kong regulators over its audits of Evergrande, the debt-riddled Chinese property giant that’s teetering on the brink of collapse.
The watchdog said it was looking into PwC’s audit of Evergrande’s 2020 accounts due to worries about the adequacy of reporting on whether it could continue operating as a going concern.
07:41 AM
PwC bets on emerging technologies
PwC said its new push in China will focus on emerging technologies and prioritise investment in five key areas: digital redesign, digital products and solutions, ESG, regional economic clusters and workforce of the futures.
It plans to build smart green offices in locations including Beijing, Shanghai and Hong Kong.
Raymund Chao, chairman of PwC Asia Pacific and China, said:
China continues to perform remarkably well despite ongoing global challenges. PwC is a purpose-led organisation. In line with that purpose, and with our New Equation strategy, we will continue to support and contribute to China’s major national strategies to drive towards an enduring outcome of continued growth and development for its economy.
We will create over 20,000 new jobs by 2026 as part of our efforts to scale up in a number of strategically important areas, including ESG and digital. We believe these areas will drive China’s future growth.
07:35 AM
PwC plots huge China expansion
Good morning
We start the week with a massive bet on China by accounting giant PwC, which plans to hire 20,000 people in the country over the next five years.
The £930m investment will double its presence in China and mean its operations there are twice the size of its home country.
The announcement coincides with the first day of the China International Import Expo, an annual conference in Shanghai promoting trade with the country.
The move comes despite ongoing tensions between the West and China, with auditors increasingly being dragged into disputes between the two sides.
5 things to start your day
1) Electric cars to get more expensive as battery costs soar Chinese producers are said to be looking to renegotiate customer contracts, including moving away from fixed pricing structures.
2) Inflation is about to give the Bank of England a smack in the face, argues Roger Bootle
3) The German who tried, and failed, to hold back eurozone money printing The ECB’s fiercest hawk, Jens Weidmann, resigned last month – but not before delivering a final inflation warning
4) Tesla founder Elon Musk is poised to sell $21 billion of Tesla stock after putting decision to Twitter followers. Some 3,519,252 votes were cast, with the result of 57.9 per cent of people saying that they supported the sale.
5) London curbs on older cars kick pollution can down the road. Owners of older cars in the capital are selling up to avoid new restrictions
What happened overnight
Asian stock markets were mostly lower on Monday after Wall Street hit a new high and China reported a double-digit rise in exports.
Tokyo, Hong Kong and Sydney declined while Shanghai advanced.
The Nikkei 225 in Tokyo fell 0.1pc to 29,570.32 while the Shanghai Composite Index shed 0.2pc to 3,497.17. The Hang Seng in Hong Kong lost 0.3pc to 24,792.27.
The Kospi in Seoul retreated 0.9pc to 2,942.42 and Sydney’s S&P-ASX 200 lost 0.2pc to 7,440.90.
New Zealand and Bangkok retreated while Singapore and Jakarta gained.
Coming up today:
Corporate: Sirius Real Estate (interims); Ultra Electronics, BAE Systems (trading update)
Economics: Eurogroup meeting (EU)
