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- 📈 Consumer confidence on the rise
📈 Consumer confidence on the rise
PLUS: A megamerger between law firms Allen & Overy and Shearman & Sterling is on the cards, Nationwide announced plans to distribute £340m to customers and the UK’s £1bn commitment to the semiconductor industry drew criticism.
Good morning. In today’s update - UK consumer confidence continued its upward trajectory, a megamerger between law firms Allen & Overy and Shearman & Sterling is on the cards, Nationwide announced plans to distribute £340m to customers and the UK’s £1bn commitment to the semiconductor industry drew criticism.
Markets
Mixed end to the week for UK equities, as markets continued to keep a nervous eye on US debt ceiling negotiations.
Retail took a beating after a disappointing trading update from US-listed Footlocker (below); JD Sports (-7.8%), Burberry (-4.1%), ASOS (-1.6%) and Frasers (-1.3%) were amongst the losers.
Corporate News
Nationwide is set to pay out around £340m directly into customers’ bank accounts, after soaring interest rates led to profits jumping by 40% over the last year. Nationwide’s earnings increased to £2.2bn (up from £1.6bn), whilst deposits also grew £9.1bn to £187bn, despite heightened competition in the savings market. The lender says it now plans to make these distributions every year, with CEO Debbie Crosbie saying it demonstrated how they used their “financial strength to benefit members”. (Link)
C&C - the FTSE 250 beer and cider maker behind brands such as Magners and Bulmers - saw shares drop 14.9% as it announced that CEO David Forde would be stepping down after a botched attempt at a software upgrade looks set to cost the company £22m. (Link, C&C)
Tesco Chairman John Allan is to step down from duties following allegations of misconduct, despite the supermarket finding “no evidence" of his wrongdoing. (Link)
FTSE 100 engineering company Smiths Group increased its full year forecasts after a strong Q3; shares closed 0.4% higher. (Link, Smiths)
Deals
London-based law firm Allen & Overy and US-based Shearman & Sterling are planning a megamerger that would create a global adviser (“A&O Shearman”) with revenues of around $3.4bn; the news comes just months after merger talks between Shearman and Hogan Lovells - another London firm - fell through. (Link)
FTSE 250 payments firm Network International has given private equity bidders Brookfield a two-week timeline extension, to come up with an offer that can be taken to shareholders. (Link)
Vegetable box delivery company Riverford is set to become 100% employee owned after founder Guy Singh-Watson sold his remaining shares. (Link)
Today’s VC round up:
Economy / General
Despite staying negative, Gfk’s monthly consumer confidence survey showed a continued positive trend for May, improving for the fourth month in a row and hitting its highest level in 15 months. The index recorded -27 (up from -30 in April), driven by a brightening outlook for personal finances and an improvement to views on the general economy. Gfk commented that the result reflected a “stronger underlying financial picture across the UK than many would think”, despite warning there were still rocky times ahead. (Link, Gfk)
The UK’s £1bn investment into the domestic semiconductor industry has been criticised as weak tea by ministers; for reference, the US and EU announced packages totalling £42bn and £37bn respectively. (Link)
Jeremy Hunt has offered Jaguar Land Rover’s parent company (Tata) £500m in subsidies to encourage it to choose the UK over Spain for its new electric battery production facility. (Link)
Check out the UK’s 2023 Rich List
🌎 Global Snapshot
Morgan Stanley CEO James Gorman is set to pull the curtains on a 13-year tenure at the top of the US bank, as he announced plans to step down within the next year. (Link)
Sportswear retailer Footlocker lowered its full-year forecasts after missing market expectations for both revenue and net income for Q1, due to “softening” consumer demand - shares dropped 27%. (Link, Footlocker)
Sony shares jumped after announcing plans to potentially spin off its financial unit into a separate listing, in order to raise funds for its gaming and electronics growth push; the move would reverse the $3.7bn take-private of Sony Financial Group in 2020. (Link)
Instagram is reportedly readying the launch of a twitter competitor, which could launch as early as this summer; the unnamed app is currently in testing phase with a select group of creators. (Link, BBG)
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