Today's business and finance round up 10th September 2021
✈Easyjet rejects takeover, asks for more cash
10th September 2021
Good morning Ikea is planning a move into central London after reportedly agreeing to buy Topshop’s flagship store on Oxford Street for £385m. The Swedish flatpack giant has also bought the 73,000 sq ft NikeTown and a 4,700 sq ft Vans shop, adjacent to the Topshop store. Ikea is thought to be planning a fresh flagship store at the Oxford circus site, which once saw 400,000 customers each week before Topshop’s collapse last year.
Easyjet rejects takeover, asks for more cash
KPMG sets workforce working class target
TRAVELEasyjet rejects takeover, asks for more cash
What’s going on?Yesterday Easyjet announced that it had rejected a takeover offer and would instead raise £1.2bn in cash to see it through the pandemic. The airline refused to name the bidder but sources claim that it was rival low cost airline Wizz Air.
Why is this important?
Being an airline during a global pandemic has been incredibly tough. Easyjet made its first loss in its 25 year history, shed 4,500 jobs and is cutting £500m out of the business to stay afloat.On paper combining Easyjet and Wizz Air makes sense. Wizz is strong in Eastern European destinations like Poland and Romania, while Easyjet is well-positioned in countries Western Europe including the UK, Italy and France. Together the two could have taken on Ryanair, Europe’s biggest low-cost carrier.But EasyJet’s board thought the offer undervalued the business. Which is not too surprising given Easyjet’s share price has halved during Covid to £7. As government restrictions continue to limit international travel, a bid anywhere close to the £15 share price last seen in March 2020, seems unlikely.Easyjet wants to go it alone for now and has asked shareholders for an extra £1.2bn. This comes 15 months after the company raised £419m from investors. TakeawayIndustry insiders expect that the longer the travel recovery takes, the more likely that airlines will merge to survive. Easyjet has boosted its cash reserve to hang on and it predicts it will get back to its pre-pandemic capacity by 2023.
WORKKPMG sets workforce working class target
KPMG has announced it's setting a target for the number of working-class people it wants in its workforce. The accounting and consulting firm is aiming for at least 29% of its senior staff to have parents that have worked in “routine and manual” jobs e.g. cleaners and drivers.Currently 23% of the KPMG’s partners and 20% of its directors are from working class backgrounds. Working class representation across its board is 22% and 14% in its executive committee.The company also revealed that staff from working class backgrounds are typically paid 9% less than those with parents in professional jobs.Diversity and inclusion have become corporate buzz words in recent years with many businesses setting targets to increase female and ethnic minority representation. But KPMG is the first large UK firm to set a goal for working-class employees and they believe it will help improve social mobility.And how is this going to be achieved? KPMG says it will launch new recruitment programmes designed to bring in talent from lower socio-economic groups. It will also introduce training for all 16,000 employees on the “invisible barriers” that exist for people from working class backgrounds.It will be interesting to see if other firms follow KPMG’s lead. Targets on improving representation are not without controversy with critics arguing that quotas go against the principle of meritocracy and those who benefit may feel stigmatised.
Stat of the day
GPS is a public service owned and operated by the US military, and offered for free to the entire world by the US government
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