Top 10 Stories of the Week! 08/08/16

Below are our top 10 stories that you need to know about. Be sure to check our twitter page and Facebook page for regular posts of important headlines. Click on the links for full stories.

Opinion articles of the week:

Analysts have argued that foreign takeovers are good news for Britain post-Brexit. Click here for the debate.

Brexit could end up being a £39 billion screw-up for the UK. Click here for more.

Should the UK adopt an Australian style points based immigration system? Click here for the debate.

 

1. LABOUR PARTY SUCCESSFULLY APPEALS LEADERSHIP VOTE DECISION

Labour was within its rights to stop newmembers voting in its leadership contest between Jeremy Corbyn and Owen Smith, the Court of Appeal has ruled.

It found Labour had the power “to set the criteria for members to be eligible to vote”, effectively reintroducing the voting ban on nearly 130,000 members. It overturns an earlier High Court ruling that the ban was unlawful.

The contest between incumbent Mr Corbyn and challenger Mr Smith was sparked after Mr Corbyn lost a vote of no confidence by his MPs and faced mass resignations from his top team.

In July the National Executive Committee, the body that governs the Labour Party, ruled that full members could only vote if they had at least six months’ continuous membership. The 12 July “freeze date” was successfully challenged by some new members in the High Court.

But on Thursday, Labour appealed against the ruling, thought to benefit Mr Corbyn over Mr Smith. Announcing the Court of Appeal’s decision on Friday, Lord Justice Beatson said: “On the correct interpretation of the party rules, the National Executive Committee has the power to set the criteria for members to be eligible to vote in the leadership election in the way that it did.” (BBC News)

The Labour members who have been denied the right to vote have announced they will not appeal the decision to the Supreme Court.  (The Independent)

2. UK CONSTRUCTION INDUSTRY FALLS INTO RECESSION

The UK’s construction industry has slipped back into recession for the first time in four years, according to official figures that show the sector was struggling even before the vote to leave the EU.

Experts say the drop in business and consumer confidence since the referendum will further dent construction activity in the months ahead. The Office for National Statistics said output dipped 0.7% in the second quarter of 2016, following a drop of 0.3% in the previous three months. It is the first time there have been two consecutive quarters of falling output – a technical recession – since 2012, when the Eurozone debt crisis shook confidence across Europe.

The ONS said its latest figures included a short period after the 23 June referendum, but noted that there was “very little anecdotal evidence at present to suggest that the referendum has had an impact on output.”

For June alone, construction output was down 0.9%, broadly in line with forecasts for a 1.0% drop.

Economists put the industry’s troubles down to government spending cuts and a blow to private sector investment plans from the referendum. A recent business survey by the data group Markit suggested pressure had intensified after the referendum. The PMI report signalled the sharpest contraction since mid-2009. (The Guardian)

3. CHANCELLOR GUARANTEES £4.5BN EU FUNDING FOR FARMERS AND SCIENTISTS

Chancellor Philip Hammond has today pledged to match EU funding for British firms in the first guarantee of its kind since the UK voted to leave the bloc in June’s historic referendum.

Hammond has agreed that all UK projects that win funds under the various EU development programmes will be “fully funded, even when these projects continue beyond the departure from the EU.”

Payouts to farmers under the EU’s Common Agricultural Policy (CAP) will also continue until at least 2020, the Chancellor confirmed. However, the head of the Local Government Association (LGA), whose members distribute a large chunk of the funds, said the guarantees did not go far enough.

The UK receives around £4.5bn in assistance every year from the EU’s structural funds, with many projects lasting a number of years. Since the vote, firms have been frantically writing to the government to ask whether they would still receive cash after the UK left the EU and whether they should continue to bid for projects.

Last month the Treasury instructed a number of government departments to freeze new payouts, including to a scheme designed to promote London’s startups, while it worked out whether it could afford to fill any potential post-Brexit black hole.

To be eligible for the government’s guarantee, projects will have to be signed before the Autumn Statement – the date of which is still unknown. Universities will also have all funding provided under projects such as Horizon 2020 underwritten by the UK government, even if the project extends beyond the UK’s departure date – again, still unknown. (City A.M)

4. AIRBNB

Airbnb is raising massive new round of funding that values the company at $30 billion.

That makes it the second-most-valuable US tech startup after Uber, which investors have valued around $68 billion.

Bloomberg reports that Airbnb is raising an $850 million round, bringing its total to $3.2 billion.

The home-sharing company has been experimenting with new business areas. Earlier this week, it launched a “community center” in Japan that functions like a hotel — it will allow tourists to rent rooms — and it’s experimenting with ways to provide more guidance to customers when they’re planning trips. For instance, a feature called Experiences will pay locals to conduct tours of particular sights.

Airbnb is also facing increasing legal fights, which could get expensive.

In New York, the state Senate passed a bill that will prevent people from advertising short-term rentals, which would basically make it impossible for Airbnb to operate in the state if the governor signs it into law, and the company’s home city of San Francisco passed legislation holding Airbnb responsible for enforcing laws related to short-term rentals. (Business Insider)

5. WILLIAM HILL REJECTS £3BN TAKEOVER BID

The William Hill board has unanimously rejected a takeover offer from Rank Group and 888 Holdings that it said “significantly undervalued” the bookmaker.

In a statement, William Hill confirmed it received a £3.6bn proposal from a Rank and 888 consortium, which was first reported this morning.

After a review with its financial advisers, Citi and Barclays, the board rejected the offer this afternoon.

The offer from Rank and 888 proposed creating an all-share merger between the two smaller companies to form a new group called BidCo, which would also offer to acquire William Hill for cash and newly-issued shares in BidCo.

William Hill said it had taken into consideration “the substantial risk” for its shareholders presented by the proposal. It cited the “highly complicated” three-way combination at a low premium with BidCo assuming approximately £2.2bn of leverage in order to fund the cash element of the consideration and refinance existing debt within the three companies. (City A.M)

Click here for the Financial Times’ analysis of the failed deal.

6. ENTERTAINMENT ONE REJECTS ITV TAKEOVER BID

Peppa Pig owner Entertainment One has rejected a £1bn takeover offer from ITV.

The UK-listed Canadian company said its board had unanimously decided to turn down a proposal valuing it at 236p a share which it said “fundamentally undervalues the company and its prospects”.

It had a market value of about £930m at the start of trading on Wednesday. The offer would take this to £1.03bn. Shares rose 7% after the disclosure about the takeover offer.

Entertainment One owns the rights to TV shows including global children’s hit Peppa Pig, as well as more than 40,000 film and television titles including Oscar-winning hit Spotlight. Its Amblin Partners venture with Stephen Spielberg is behind this summer’s film, The BFG, based on Roald Dahl’s classic children’s book.

Entertainment One also owns around 40,000 music tracks.

A takeover deal would help ITV broaden its business, continuing its strategy of acquiring companies making TV content as it seeks to offset pressure on its traditional advertising revenue income.

ITV said last month that it would slash £25m in costs as it warned ad revenue was set to dip 1% in the nine months to the end of September amid the fall-out from the UK vote to quit the EU. (Sky News)

7. GOOGLE ANTITRUST INVESTIGATION

Google is being investigated by South Korea’s antitrust regulator over concerns the search giant has violated competition laws.

The Korea Fair Trade Commission revealed the investigation in a brief statement, while Reuters has reported that the watchdog inspected Google’s Seoul HQ last month.

The KFTC has investigated Google before. In 2013, the regulator cleared Google of wrongdoing following a probe into whether the company hurt competition by forcing smartphone makers using Android to pre-load its search engine on the handsets.

Google is also facing potential antitrust charges within the EU, and this came just a day after it was fined $6.8m in Russia over competition violations with its Android software.

Russia’s anti-monopoly service ruled that Google forced smartphone manufacturers to pre-install Google products on their devices, and the tech giant is also facing antitrust charges inside the EU. (City A.M)

8. INTEL ACQUIRES START UP FOR $350 MILLION

Intel just bought a two-year old machine learning startup called Nervana Systems, a move aimed at expanding its data center business.

Intel declined to share the financial details of the deal, but reports claim it paid “at least $350 million,”.

That’s a steep price for a 48-person company. But given Nervana’s top notch technology and leadership team, led by former Qualcomm researcher Naveen Rao, it’s a move that will likely help Intel bolster its already dominant position in the data center market.

Intel has been desperately trying to shift its focus away from the shrinking PC chip business lately, and put a lot more emphasis on growing its data center and Internet of Things units.

In particular, as more devices get connected to the internet, it will create a whole lot more data, which will have to be processed through data centers. Intel provides over 90% of the chips powering today’s data centers and having Nervana’s technology to make better sense out of the data will only boost its service offerings. (Business Insider)

9. PINEWOOD FILM STUDIO £323M TAKEOVER

The Pinewood film studio – home to the James Bond’s movie franchise – has accepted a £323m takeover offer. The famous Buckinghamshire complex – where parts of the Harry Potter series and the most recent Star Wars were also filmed – said it needed to fund ambitious expansion plans.

In a statement, Pinewood said it was recommending a cash offer by Aermont Capital, an investment adviser to real estate funds established by Perella Weinberg, a New York-based merchant bank.

The former boss of the BBC, ITV and of grocery delivery firm Ocado added: “The Pinewood Group has been transformed in recent years but has been somewhat constrained in realising its ambitions due to the lack of share liquidity.

Pinewood, which opened in the 1930s and went on to shoot the Carry On films, has been trying to engineer a move from the AIM to London’s main stock market. Earlier this year, the Pinewood group reported profits of £13.6m, up from £5.8m last year. (Sky News)

10. TYRRELLS CRISP MAKER BOUGHT BY AMPLIFY FOR £300M

Upmarket UK crisp maker Tyrrells has agreed to be bought by US snacks firm Amplify in a £300m deal. Tyrrells’ products include potato and vegetable crisps, as well as premium popcorn which it calls “poshcorn”.

Amplify will pay Tyrrells’ current owner Investcorp about £278m in cash with the remainder in Amplify shares.

Tyrrells was founded in 2002 by potato farmer William Chase who realised that making crisps was more profitable than selling potatoes to supermarkets. Mr Chase sold the company in 2008 for nearly £40m and used some of the the proceeds from the sale to set up his own distillery making and selling premium vodka and gin from his potatoes.

Tyrrells generated approximately £85m in net sales last year and international revenues now account for about 40% of its sales.

Amplify owns the SkinnyPop brand in the US, and is a major player in the US snack food sector.  “As a small, UK farm-based business it is a tremendous achievement to be now part of a US publicly-traded company with the international reach to make Tyrrells a global brand”. (BBC News)

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