🏖️ CVC eyes UK holiday resort

Good morning. In today’s update - private equity giant CVC is mulling a bid for Centre Parcs, a number of British companies were hit by a cyber attack and the UK services sector continues to surge forward.

Markets

• UK markets struggled to keep up momentum following Friday’s rally, despite positive economic news around the services and auto sectors.

  • The FTSE 100 and FTSE 250 edged back 0.1% and 0.2% respectively.

• After an initial bump, oil majors Shell and BP gave up early gains as crude prices tracked lower.

• Asos shares jumped 7.4% on the back of takeover speculation from Alibaba-backed Trendyol over the weekend.

Corporate News

British Airways, Boots and the BBC were amongst those hit by a cyber attack on Monday; the attack - linked to payroll provider Zellis - resulted in the loss of personal information for “tens of thousands” of employees, including names, dates of birth and NI numbers. (Link)

Deals

PE giant CVC is reportedly eyeing a bid for British holiday resort Centre Parcs, ahead of a deadline later this month; other potential bidders include France-based infrastructure fund Atin, along with previous owners Blackstone. Current owners Brookfield are thought to be looking for between £4bn-5bn. (Link)

Odin Vision - a UK-based cloud AI endoscopy company spun out of UCL - has been acquired by Japan’s Olympus Corporation for up to £66m (Link)

In today’s VC update:

• IQ Capital - a UK-based tech VC - raised £320m across two funds to make further investments in the deeptech sector; the fund invests in early-stage seed and Series A rounds across generative AI, data security and space-tech. (Link)

• Pasabi - a Scotland-based fraud detection platform helping to identify fake reviews - raised $3m in seed funding from VeUP. (Link)

• Grow Lab Organics - an Isle of Man medical cannabis startup - bagged a £1m seed round to fund a new facility; the company also launched a Seedrs crowdfunding campaign, raising almost £3.5m so far. (Link, Seedrs)

Economy / General

A key survey showed the UK service sector continued to surge during May, with the S&P PMI posting a reading of 55.2 - up from initial estimates of 55.1 (above 50 signals growth); on the downside, respondents to the survey noted input costs had risen by the most in three months, largely as a result of wage increases. (Link, S&P)

The UK’s auto industry hailed a 10th straight month of growth in new car sales during May, as registrations grew 17% year-over-year; consumers continued the rapid shift towards electric vehicles, with battery-powered EV volumes growing 59% - now accounting for 16.9% of the market. (Link, SMMT)

Following the bank turmoil in the first half of 2023, the Bank of England are considering whether to broaden the scope of the deposit guarantee scheme (FSCS) overhaul; alongside increasing the £85k protection threshold (which is well below the US equivalent of $250k), the BoE are now considering whether the FSCS could be used to fund insolvent banks as a bridge to either a sale or winding down. (FT)

🌎 Global Snapshot

Apple announced the launch of highly anticipated AR headset, Vision Pro, at its annual Worldwide Developers Conference on Monday; the device will project digital messages on top of the real world, allowing users to watch TV, play video games and collaborate live on documents, amongst others things. To get your hands on one will cost (just) $3,499, available “early next year”. (Link, Apple)

Viaplay announced a downgrade in its outlook for this year amid an “accelerated deterioration” in the operating environment - the Swedish streaming company lowered projections for 2023 organic sales growth from around 25% to roughly 17%; shares were battered following the announcement, down almost two-thirds. (Link, Viaplay)

Spotify is planning another round of layoffs just months after cutting 600 staff; the streaming app is looking to cut another 200 heads (roughly 2% of the workforce) in the podcast division, as a result of restructuring. (Link)

French aerospace company Safran is eyeing a move for Raytheon’s flight controls unit; the US-based defence giant was considering a sale of the business back in January and is reportedly looking for up to $1bn. Safran’s shareholders weren’t overly pleased - shares fell 1.3% in Paris. (BBG)

Private equity heavyweight KKR agreed a $1.6bn deal for US-listed machinery maker Circor, giving shareholders a 55% premium to the latest share price; the company produces pumps, valves and motors for the industrial, aerospace and defence industries, with KKR planning to use Circor to roll-up other players in a fragmented market. (Link, WSJ)

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