NUMBER UP
CASINO BONUSES CURBED China’s clampdown will see deals stuck in the doldrums
FIRST the Qataris, now the Chinese. London is learning the tide can turn against you when you float unanchored on the seas of global finance.
More than any country in the world, Britain welcomes foreign investors with few questions asked. As a result, sovereign cash from exotic parts of the world has flooded into everything from financial services to construction.
But with exotic owners come exotic risks. Qatar is in the grip of sanctions as its neighbours accuse it of funding terrorism, and now China is clamping down on the risks its giant corporations take overseas. Both countries have poured billions of dollars into London in recent years.
Qatari investors stress it’s all business as usual here. Don’t panic about Harrods, Canary Wharf, The Shard, Chelsea Barracks, British Airways-IAG, Heathrow, or Sainsbury’s, they say.
Likewise, China’s Dalian Wanda, building large chunks of Nine Elms in Vauxhall, Fosun, shareholder and joint-venture partner to Thomas Cook, and HNA, also a London property investor, claim nothing has changed.
For existing holdings maybe, but City deal advisers remember how China stamped on Anbang’s donedeal for Starwood Hotels and fear for future ones. They have already THE UK’s competition watchdog today moved against unscrupulous online betting firms who “load the dice” against new customers.
The Competition and Markets Authority (CMA) has acted after 800 complaints from customers tempted to sign up to casino sites with promises of bonus cash. Its concerns focus on complex terms and conditions that often mean customers have to play through winnings hundreds of times before they can withdraw cash, denying them the chance to quit while ahead.
Up to seven companies contacted seen the “golden era” of Chinese investment cool since the Brexit vote. Now they fret Middle East and Chinese politics will kill off what little M&A activity there is in London at the moment.
It seems our dealmaking waters will remain mirror-still long after the summer.
Widows wedding wait
DON’T dust off your best kilt for Standard Life’s wedding with Scottish Widows just yet.
The tartan takeover talks mooted earlier this week won’t stand a chance until regulators are happy that Standard has safely settled down with Aberdeen
Asset Management.
Given that the Aberdeen deal means Standard Life can’t even by the CMA face enforcement action if they refuse to change their practices, potentially leading to large fines under the Consumer Rights Act the loss of their betting licence.
Nisha Arora, the CMA’s senior consumer enforcement director, said: “New customers are being enticed by tempting promotions only to find the dice are loaded against them.”
The wider gaming industry is, meanwhile, facing a crackdown against controversial betting machines in bookmakers. begin any other talks until August 14, Standard-Widows can’t happen at least until 2018. That’s what RBC analyst Gordon Aitken told his clients today. And, as the former investor relations man at Standard Life, he should know.
But despite a lengthy flirtation, this is a marriage that makes good sense.
Aberdeen already runs Widows’ insurance book, so the couple know each other’s foibles, while merging two businesses geographically close can create big savings — albeit with a heavy toll on jobs. That allows Standard to afford a decent dowry to convince Widows’ owner, Lloyds, of its eligibility.
The marriage will happen, but not for a year or so.
@ArmitageJim