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  • Daily business and finance update 16th May 2023

Daily business and finance update 16th May 2023

US investor ditches UK targets

Good morning. Today we're talking about an American investor ditching two British takeovers, a youth media pioneer going bust, the EU and UK's opposing Microsoft views and supermarket competition investigations.

Big Stories

US investor ditches UK targets

US private equity giant Apollo has walked away from takeover plans for two British listed companies – ecommerce firm THG and engineering group John Wood – sending shares in the firms down 20% and 33% respectively. THG which owns the Cult Beauty and Myprotein websites, said that Apollo’s offer – which hasn’t been made public - undervalued the business. THG has had several setbacks since its high profile listing in 2020, with the company seeing annual losses almost treble to £550m last year. John Wood had been approached by Apollo (for the fifth time) in a deal worth £1.7bn. The company’s board said that it remains confident in the firm’s “strategic direction and long-term prospects following a transformative year in 2022”. Since the Brexit vote in 2016, British public companies have been the target of foreign investors thanks to their cheap valuations driven by the relatively weak pound.

Media pioneer goes bust

Yesterday Vice Media, the youth-oriented digital publisher of sites such as Vice and Refinery29, filed for bankruptcy. Its downfall comes amid the challenging environment for digital media companies as economic growth slows and the advertising market softens. The Canadian firm was founded in 1994 and started as an edgy print magazine before transforming to an online news brand tailored to the youth market. At its peak in 2017 Vice was valued at $5.7bn and received investments from media giants like Rupert Murdoch and Disney. But Vice fell into financial trouble as it struggled to turn a large readership into sustainable digital ad sales.

EU says yes to Microsoft deal

The EU competition regulator has approved Microsoft’s $70bn takeover of gaming firm Activision Blizzard weeks after its UK counterpart vetoed the deal. The tie up to create the third-largest gaming firm in the world by revenue needs the approval of authorities in the UK, US and EU. There are concerns the deal would reduce competition and therefore lead to higher prices, lower quality or less choice for consumers. The EU concluded that the deal can pass thanks to commitments from Microsoft related to cloud gaming. The compromise involves Microsoft offering free licences over a 10-year period allowing European consumers who purchase Activision games to stream them on other cloud gaming services. A final decision from the US regulator is expected by the end of the year.

Supermarkets under investigation for overpricing

The Competition and Markets Authority (CMA) is investigating supermarkets into whether they are overcharging customers or food and fuel. The regulator said that it had found evidence that factors beyond the war in Ukraine have impacted the price customers are paying at the pumps and weak competition has helped drive increases. The CMA also said that as the cost of living pressures have grown, it would be would step up its work in the grocery sector to check prices are not higher than they should be. Supermarkets said they were working to keep food prices "as low as possible".


Holiday sale: Holiday village chain Center Parcs has been put on sale for £5bn by its Canadian owners.

Cutting back: Netflix is planning to cut its spending by $300m this year after it delayed plans to crackdown on password sharing.

Added privacy: WhatsApp users will soon be able to lock and hide conversations, thanks to a new feature.

Troubling times: Fears of an imminent cash raise sent shares in online fashion retailer ASOS plunging 19%.

Leadership shake up: The UK arm of EY has reshuffled its top management team in the wake of the failure of the global firm’s plan to split between audit and consulting.

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