The week’s news included; LVMH buys Tiffany for $16bn, Ebay sells StubHub to Viagogo for $4 billion, Uber loses London license, Netflix enters cinema with NY theatre lease
Below are our top 10 stories that you need to know about. Be sure to check our twitter page, Facebook page and Instagram Page, for regular posts of important headlines. Get all the important stories and insights straight into your inbox by subscribing to our mailing list here.
Opinion articles of the week:
- E-Financial Careers – Banks don’t want analysts with opinions now
- BBC News – Artificial eyes: How robots will see in the future.
- City A.M – Why the Cybertruck is a breakthrough for Tesla and designer Franz von Holzhausen
- BBC News – Will the US’s Hong Kong rights law derail trade talks?
1. LVMH BUYS TIFFANY
Luxury goods firm LVMH is buying Tiffany & Co for $16 billion. The deal will allow LVMH to expand its already impressive portfolio with a jewellery designer with huge prestige. The firm already boasts 75 brands including Louis Vuitton, Sephora, Givenchy and Tag Heuer. LVMH will pay $135 per share for Tiffany’s. Luxury brands are difficult to price as the value of a brand is intangible yet this is the fundamental aspect of pricing luxury goods company. Tiffany’s while prestigious, has been struggling to appeal with younger consumers. To achieve this, it has tapped into the influencer sphere, securing Kendall Jenner as a model for its latest jewellery collection. Tiffany was founded in 1837, employs 14,000 people worldwide and was at the centre of the 1961 Audrey Hepburn film “Breakfast at Tiffany’s”.
2. EBAY SELLS STUBHUB
EBay is selling StubHub to Viagogo in a $4 billion deal. This deal will help Viagogo cement a dominant position in the European ticket resale sector as it buys out a large rival. The combined company will operate in 70 countries. Viagogo has been plagued by legal issues after the CMA found the company misled customers about ticket information. Viagogo made steps to improve through providing clearer information on its website and the CMA dropped the case. EBay has made a healthy turn on StubHub after buying it for $310 million in 2007. The CEO of Viagogo also co-founded of StubHub so will now be reunited with his company. The sale is expected to close in early 2020.
3. XEROX $33 BILLION HOSTILE TAKEOVER BID
Xerox has taken its $33.5 billion takeover bid directly to HP shareholders in a hostile takeover attempt. HP directors last week firmly rejected Xerox’s $30 billion bid. HP felt Xerox significantly undervalued the company with their $22 per share bid, as its share price currently trades around $20. In addition, the deal would leave HP with a huge debt burden hence. Xerox recognises its tactics are aggressive but is keen to secure the deal. A hostile takeover is where a company bypasses the target company’s directors and puts the bid directly to shareholders who will take the decision instead. Xerox is a print and digital services firm headquartered in the US, best known for its printers. The firm posted revenue of $9.83 billion in 2018.
4. ALIBABA EXCHANGE LISTING
Chinese e commerce giant Alibaba listed on the Hong Kong stock exchange last week, raising $11 billion. The listing proved a success and gave a much-needed boost to the Hong Kong economy. Alibaba’s shares rose 6.6% and this became third largest listing in Hong Kong’s history. Alibaba’s shares are already listed on the NYSE where it’s IPO raised $25 billion.
Hong Kong has been engulfed in protests for the last 5 months but it’s elections have pro used some respite. This IPO proves another vote of confidence in the Hong Kong economy despite the protests plunging it into recession.
5. UBER LOSES LONDON LICENSE
Uber lost its license to operate in London last week. TfL deemed Uber not fit and proper to operate. Uber was currently running on an 18 month temporary license while TfL. This temporary license expired. TfL found numerous failings in passenger safety and deemed Uber’s attempts to improve passenger safety as insufficient to grant a new license. Uber had 14,000 trips carried out by unlicensed drivers who were uninsured, and one driver even had their license previously revoked by TfL. Banned drivers could also set up new accounts easily under false pretences. These are just some of the issues that led to the decision. Uber is appealing the decision and will be allowed to continue to operate until this process is concluded.
In the meantime, Uber’s rivals are cashing in looking to eat up Uber’s market share. Rival company Bolt, formerly called Taxify, received $100 million in new funding from investors. This cash injection will see Bolt hit a $1 billion valuation. Bolt has secured 300,000 customers in London in just 5 months and registered 30,000 drivers. It currently operates in 35 countries.
6. CHARLES SCHWAB AGREES $26 BILLION MERGER
America’s largest online stockbroker, Charles Schwab, has tied the knot with its largest competitor, TD Ameritrade. The combined firms will have 24 million customers and will support. With so many competitors in the online brokerage business, profits have been slashed so even the very largest players must consolidate to stay profitable. Many brokerages have had to switch to a zero commission brokerage system where customers are not charged for trades. Charles Schwab had only recently moved to zero commission to ensure it stays ahead of competitors. Now online brokers rely on lending and investing client money. Sky News looks closer at the world of US online brokerage.
7. NETFLIX ENTERS CINEMA
Netflix has taken over its first cinema in a landmark move by the streaming giant. The company has secured a 10-year lease for the Paris cinema in New York and it will show its specials. Netflix has ensured to rent cinemas for a time to allow its productions to be eligible for film awards but this marks the first long-term agreement. Netflix has faced a lot of backlash from the industry. The streaming service is deemed a disrupter that is keeping viewers away from the big screen, harming the industry.
8. DAILY MAIL OWNER BUYS i NEWSPAPER
Daily Mail and General Trust (DMGT), the owner of the Daily Mail newspaper, has purchased i Newspaper for £49.5 million. The owner of DMGT has confirmed that the acquisition will not see a change in the editorial style and the i will retain journalistic independent. There are no job cuts expected. i posted revenue of £34 million last year. The website pulls in 300,000 daily unique viewers. The deal is subject to the Competition and Markets Authority. DMGT is owned by billionaire Lord Rothermere.
9. SUPREME COURT GIVES EXTRA WHISTLEBLOWER PROTECTIONS
The Supreme Court has passed a landmark judgement giving whistle-blowers extra legal protections from employers. The case derives from a employee who raised concerns that a Royal Mail was breaching company policy through offering incentives to existing customers. A manager then sought to force the employee out by setting unreachable targets. A senior manager then saw grounds for dismissal based on her failure to meet these targets, although this decision was taken in good faith. The Supreme Court deemed that this constituted unfair dismissal. The unfair targets set create illegitimate grounds for dismissal as the employees performance was wrongly purported to be inadequate. The judge ruled in favour of the employee. This judgement provides additional protection for employees faced with dismissal for blowing the whistle.
10. BONMARCHE RESCUED BY PEACOCKS
Collapsed retailer Bonmarche looks set to be rescued by Peacocks. Bonmarche fell into administration in October but continues to trade as it seeks a buyer. Peacocks has now been identified as the preferred bidder, but negotiations are still ongoing to finalise the deal. Administrators have confirmed however, that 30 Bonmarche stores will be closed by 11 December, putting 240 jobs in jeopardy. The remaining 285 stores will trade as normal and Peacocks hope to save all of these stores after it hammers out a deal. It is a tough decision given the substantial difficulty faced by high street retailers. Peacocks currently has 500 UK stores and was itself rescued from administration in 2012.