Grand larceny of UK tech

THE capitulation of Sir Mike Rake and chief executive Philip Jansen in the fight to keep Worldpay as financial technology leader in Britain was entirely predictable.

Having thrown in the towel and agreed Worldpay be swallowed up by American competitor Vantiv for £9.3bn, the British firm spent the last couple of weeks fighting off dissident shareholders.

UK investors rightly were chagrined by the sub-octane 23pc premium to the prebid share price and an exchange of American for British shares – a no-no for UK based funds. The two sides have now come up with a series of messy compromises.

These include a secondary London float designed to make shares more tradeable.

There should be no mistake about what is happening. The chairman and chief executive of the combined enterprise will be the Vantiv boss Charles Drucker.

Jansen, who helped build Worldpay into a global payments leader in more than 120 countries, will be his subordinate. It is hard to believe that the volatile Jansen will be able to live with such an arrangement.

Nor can we expect the Americans to take much notice of Rake, who steps down as chairman to become ‘lead’ director. Focus- ing on the petty details of the recommended deal is a distraction.

In Worldpay the UK has a global fintech leader nurtured within NatWest, expanded by RBS before being sold to private equity and floated in London.

The R&D and code is British and the intellectual property is here. Worldpay is technologically superior to Vantiv, which is the master of ‘point of sale’ technology and lacks Worldpay’s online expertise.

But with Vantiv investors controlling 57pc of the shares in the enlarged company, one can almost hear the whoosh as the best of the intellectual property flees overseas.

The dual headquarters structure will not protect the brainpower from heading to Cincinnati and beyond. It seems a long time ago that Theresa May promised a robust approach to overseas takeovers.

Since then Softbank has swarmed all over internet- of- things innovator Arm and countless smaller tech companies have vanished into foreign hands, taking scientists, engineers and technologists emerging from the UK’s great universities with them. This is corporate larceny on a grand scale.

But our small-minded politicians, wallowing in the entrails of Brexit, have failed to grasp what is going on.

Have they forgotten there is such a thing as the national interest? Crisis aftertaste ONE should not let August 9 pass without noting it was the date in 2007 when JeanClaude Trichet, president of the European Central Bank, came rushing to the rescue of the banking system, pumping emergency funds of £100bn into the money markets.

German authorities had already moved to rescue and stave off collapse at several banks loaded down with garbage US subprime securities.

But it was the potential failure of France’s largest lender BNP Paribas that was of a different order, as global lending froze.

In Britain, Northern Rock was among those banks undergoing a ‘silent’ run under which wholesale lenders do not roll over their loans. Trichet was alert to danger when other central banks, including the Bank of England, seemed to think they could muddle through.

Yet it was Mervyn King at the Bank of England and Ben Bernanke at the Federal Reserve who grasped the nettle. The ECB was restrained by German conservatism and French disdain for Anglo-Saxon solutions. Despite the ECB being first on the scene, in the end it failed to act decisively.

The consequences have been dreadful with the banking system in Southern Europe – Italy, Spain, Greece and Portugal – still struggling with the legacy.

In Britain and the US citizens worry about static or falling real incomes. In much of southern Europe lives are still being blighted by mass unemployment. Debt overdose WANT a preview of the next financial crisis? Take a look at the way in which generic drug makers overreached with mega-takeovers built on debt.

A toxic mix of falling medicine prices and debt service has seen the earnings and share prices of giants Mylan, Taro and Teva collapse. The Israeli firm’s shares are down 41pc.

As US interest rates slowly rise, watch over borrowed firms hit the dust with financiers and bankers not far behind.