Companies in the news ... and how they were assessed
Formula 1: pole position
The Monza paddock at the Italian Grand Prix was “awash with speculation” last weekend, said Kevin Eason in The Times. Rumour had it that Bernie Ecclestone, who has ruled Formula 1 for four decades, “was at his last race in control”. The US cable TV group Liberty Media is rumoured to be in advanced talks with the private equity group CVC Partners, which owns F1’s parent company, to buy a 15-20% stake in the outfit for up to $2bn, giving the company effective control. The exact situation is unclear: some insiders claimed that a deal has already “been completed”, but Ecclestone dismissed the reports as “bulls***”, and at least two more potential bidders may still be in the frame. Nonetheless, Liberty’s ambitious billionaire owner, John Malone, looks to be in “pole position”, said the Financial Times. If completed, the deal “could mark a turning point for a sport which – while hugely popular on television – has been criticised by fans for being too predictable and for failing to modernise”. It would also be a “landmark deal” for Malone, who tried to buy a large F1 stake in 2014; it would confer valuable international TV rights and “virtually untapped” digital and social media opportunities. “A big question remains over the future role” of Ecclestone, 85, who owns 5% of F1’s parent. The word among analysts is that he is unlikely to stay the course.
Apple: a timely gift for the iphone 7
Excitement ahead of the launch of the latest iphone this week was “rather more muted” than usual, said James Titcomb in The Daily Telegraph. In terms of design, the iphone 7 was expected to add little to the hugely successful iphone 6, launched in 2014, beyond a controversial decision to major on wireless-only headphones. Yet this is arguably Apple’s “most crucial event in years”. For the first time in the device’s history, iphone sales are in decline. Having risen for 35 consecutive quarters since 2007, they have fallen by “double-digit percentages” in the last two quarters. “The biggest challenge facing Apple is the decline of the smartphone market,” IDC analyst Francisco Jeronimo told The Observer. Once market penetration hits 80-85%, it’s about “convincing existing users to upgrade and attracting buyers from other brands”. And, in key markets such as China, “rising stars” such as Huawei, Oppo and Xiaomi are “eating into Apple’s bottom line”. Still, Apple has been handed “an unexpected gift”, said Tim Bradshaw in the FT. Arch-rival Samsung has been forced to replace some 2.5 million units of its Galaxy Note 7 phone, just weeks after its release, because of “a spate of exploding batteries”.
Telefónica: O2 mega-float
The City is gearing up for “a £30bn float frenzy” as private-equity giants and foreign owners “seek to capitalise on the strength of the London stock market following the EU referendum”, said The Sunday Telegraph. The biggest IPO in the works is that of mobile operator O2, whose Spanish owner, Telefónica, is working with UBS to float a minority stake, “potentially by the end of the year”. Telefónica had to rethink its plans for O2 after a proposed £10.25bn sale to rival Three was “torpedoed” earlier this year by European competition authorities, said Deirdre Hipwell in The Times. According to Dealogic, the listing would push O2 “straight into the rankings of the biggest floats in British history”.