Companies in the news ... and how they were assessed
Vodafone: Indian adventure
“Some markets are too important to ignore,” said Lex in the Financial Times. “BP was burnt in Russia but still went back for more.” The same is true of Vodafone in India. Having already taken some $6.6bn in write-downs on the sub-continent, the UK mobile operator now plans an ambitious merger, with rival Idea Cellular, which will create “the biggest telecoms group in the country, with almost twice as many customers as Vodafone India”. The combined company will have an enterprise value of around £19bn, a market share of 35% and almost 400 million customers. “Nobody could accuse Vodafone of lacking ambition” in India, said Alexandra Frean in The Times. But this deal “follows a price war that proved too difficult for the British telco to fight single-handedly”. Competition came from an aggressive new entrant, Reliance Jio, which “has amassed about 100 million subscribers” since it was launched last September by India’s richest man, Mukesh Ambani, with a promise of a “free” 4G service. Vodafone boss Vittorio Colao will hope that merging with Idea will help see off the upstart. But will his “bright idea” pay off? “Voda’s foreign entanglements have a mixed record,” said Alex Brummer in the Daily Mail. If the company can eliminate India’s cut-price operators, it could “eventually clean up” – it is, after all, a vast market. “But this is no slam dunk.”
UK banks: laundromats?
Foreign Secretary Boris Johnson is scheduled to fly to Moscow soon for “high-level” talks. What are the chances that money-laundering will be on the agenda? Records obtained by the Organised Crime and Corruption Reporting Project (a group of investigative journalists) show that British banks have processed nearly $740m from “a vast money-laundering operation run by Russian criminals with links to the Russian government and the KGB”, says The Guardian. Investigators believe that, between 2010 and 2014, at least $20bn (£16bn) was smuggled out of Russia via an operation dubbed “the Global Laundromat”, which was backed by a group of around 500 wealthy and politically influential Russians. HSBC, Royal Bank of Scotland, Lloyds, Barclays and Coutts are among those now “facing questions” over what they knew about the scheme, “and why they did not turn away suspicious money transfers”. The UK government, too, is in the firing line – accused of “complacency” and of failing to face up to the problem.
Atlas/panmure Gordon: Diamond’s City return
Five years after he left Barclays, the bank’s former boss, Bob Diamond, is planning “a City comeback”, said Dylan Lobo on Citywire. Diamond’s private equity vehicle, Atlas Merchant Capital, has joined forces with the Qatari investment bank Qinvest to launch a £15.5m bid for one of Britain’s “oldest stockbrokers”, Panmure Gordon. The market was so delighted that shares in Panmure soared by nearly 75%. Diamond – once branded the “unacceptable face of banking” by the former Labour trade minister Lord Mandelson – has chosen “one of the City’s most venerable names for his comeback”, said Angela Monaghan in The Guardian. “Panmure Gordon was founded in 1876 and its alumni include David Cameron’s late father, Ian, who was a senior partner.” But, of late, “life has been tough”, said Iain Dey in The Sunday Times: shares have more than halved in the past four years. There is “a delicious irony” in the fact that Diamond, “a man still loathed by much of the Establishment”, is “determined to resurrect this grand old name”. What are his chances? Viewed in isolation, the deal looks odd. But Panmure fits into Diamond’s wider plan of making hay from “the unravelling of the global financial services industry”, thanks to regulation and economic strain. If the stockbroker moves back into international markets, it could well herald “a return to glory”.
Christie’s: the hammer falls
After a “muted” 2016, there are signs of an art market recovery, said James Pickford in the FT: both Christie’s and rival auction house Sotheby’s “enjoyed robust results from their winter sales of fine art”. Alas, that won’t be enough to prevent a big programme of cuts and job losses at Christie’s. “The biggest shock to English hearts is the planned closure of its much-loved South Kensington branch (CSK), where it has successfully orchestrated lower-value sales for over 40 years,” said Colin Gleadell in The Daily Telegraph. With big international sales of modern and contemporary art now driving the business, it risked becoming a white elephant. CSK’S turnover fell from £139.4m in 2012 to just £62.1m last year. Still, the spirit of the showroom lives on. “It was CSK’S roving valuation events that inspired the creation of the ever-popular Antiques Roadshow.”