TheChek News Flow

The sell-off on 15 September (ABVX -5.7% to ~$107, versus a prior close of $113.58) traces back to a misreading of management's comments at the Morgan Stanley Global Healthcare Conference fireside. The X thread captures the essence correctly, and the MS note (Judah Frommer, 15 September, Overweight, price target $180, market cap $10.8B) provides the precise wording, so it is worth setting out exactly what was said.

What management said. Citing Evaluate Pharma data already on slide 5 of the corporate presentation, the US UC market is expected to grow from ~$6B today to ~$15B in 2032. As a directional illustration, management noted that ~20% share of that 2032 US market would equate to ~$3B of US sales in 2032. That is the full extent of the comment: a share-of-market arithmetic exercise on a single year, in a single geography, in a single indication.

What management did not say. There was no peak sales guidance. MS caught up with management after the session, and the note states explicitly that the comments "are not tied to peak sales" and that the peak sales opportunity for obefazimod is "materially greater" once pricing, durability, ex-US markets, Crohn's disease and market growth beyond 2032 are taken into account. The reply in the thread ("if they said $3B in 2032, isn't that bearish?") is therefore built on a false premise: $3B is a partial-scope illustration, not a ceiling for the franchise.

Why the number is not bearish even taken at face value. A single-indication, single-market, single-year figure of ~$3B, reached only a few years after launch, is a ramp point, not a plateau. Excluded from it: EU and Japan UC, Crohn's (Ph2b topline on track for mid-2027), price evolution, persistence beyond the 2032 snapshot, and the further expansion of the oral advanced-therapy market that management's own research anticipates. For reference, the MS $180 price target rests on a DCF with explicit revenue projections through 2035, an 11.5% discount rate and 0% terminal growth, and MS models the company turning profitable in 2028 (EPS $1.89e). None of that framework was changed by the fireside.

What actually mattered in the fireside. The substantive takeaways were all supportive: GI advisory boards are not concerned by the ABTECT malignancy cases given patient risk factors and elevated background malignancy rates in IBD; management does not expect a black box warning and considers it very possible that the label carries no malignancy warning at all; both 25mg and 50mg doses are being pursued for the label with flexible language; multiple new presentations are coming at UEG (17 to 20 October), including maintenance data by prior advanced-therapy exposure and line of therapy, plus long-term Ph2 persistence data; the pre-NDA meeting has been held and filing remains on track for YE26.

Bottom line. The stock sold off on a second-hand misquote that both the company and the hosting broker have now corrected. Nothing in the fireside changed the fundamental case; if anything, the labeling commentary and the UEG data flow are incrementally positive. Against a 52-week range of $69.81 to $148.83 and an unchanged $180 target, we would treat the weakness as noise ahead of UEG and the NDA filing rather than as new information.

ChatGPT maker has had preliminary investor discussions about a new raise; is likely to go public next year

OpenAI has held early discussions with investors about a new funding round that could value it at more than $1.2 trillion on the heels of the release of its latest cutting-edge model, according to a person familiar with the matter.

The ChatGPT developer was valued at $852 billion in March after completing a $122 billion financing from investors including Amazon, Nvidia and SoftBank. If completed, the new round would precede the company’s highly anticipated initial public offering, now expected next year.

The startup is in a tight race for AI supremacy with rival Anthropic and has recently faced new competitive pressure from a crop of lower-cost Chinese open-weight models.

Since its earlier raise, the company said it has reached more than one billion active users and that more than 200 million businesses use its AI models. Growth of its AI coding tool, Codex, has also been strong, and the company recently released a new model, Astra, which it described as the world’s most intelligent and aligned model.

OpenAI’s revenue rose to $6.7 billion in the three months ended in June, up from $5.7 billion in the first quarter. Its operating margin fell, delaying the prospect of profitability ahead of an IPO.

In an interview with Fortune this month, OpenAI Chief Executive Sam Altman said the company wasn’t likely to go public this year, citing concerns about AI safety.

“I actually think that, given everything happening with safety, right now would be an ill-advised moment to go public, and we don’t feel pressure on that,” Altman told Fortune.

The Financial Times earlier reported on OpenAI’s fundraising discussions.

Heathrow expansion incompatible with climate goals, UK government advisers warn

New runway would emit as much CO₂ as the city of Birmingham, says independent Climate Change Committee

Expanding Heathrow would add as much carbon to the atmosphere as the city of Birmingham and is incompatible with the UK meeting its legally binding climate targets, the independent Climate Change Committee has warned.

The CCC on Wednesday said a third runway at Britain’s sole hub airport would release 4.5 megatonnes of CO₂ or equivalents a year by 2054 — equal to the current emissions output of the UK’s second city — even with the expected take-up of cleaner fuels and newer aircraft.

“There is no credible pathway for Heathrow airport expansion within the UK’s climate commitments under current policies,” the committee said in a report.

Heathrow already accounts for half of the UK’s aviation emissions, in part because of its concentration of long-haul flights. If expanded, the west London airport alone would produce more carbon by 2050 than farming or the electricity sector, according to modelling by the CCC — although this assumes all other industries make big cuts to emissions by the middle of the century. 

Nigel Topping, chair of the committee, said: “Our key conclusion is that the government cannot expand Heathrow airport without requiring the aviation industry to clean up its emissions.”

Ministers — who have backed expansion at Heathrow as a means of boosting economic growth — had asked the CCC to study the project, as well as to look more broadly at the UK’s aviation landscape. 

The committee, which advises on climate policy, found that flying emissions would breach targets without significant changes to the government’s policy — even without Heathrow’s planned expansion. 

Even without a third runway — which is part of a £33bn plan by the airport and opposed by environmental campaigners — aviation emissions would rise from 37 megatonnes of CO₂ a year in 2025 to 39 megatonnes in 2050, it found. 

“Heathrow just makes the problem worse,” said James Richardson, CCC chief economist. 

Decarbonising aviation is significantly harder than other transport industries, with electric aircraft decades away and able to fly only short distances. There is also not enough sustainable aviation fuel to meet current targets set by the government, despite SAF already being four times more expensive than jet fuel. 

In addition, SAF is produced by oil companies rather than airlines, which have complained that they are being penalised for another industry’s failure. 

However, the committee argued that airlines should bear the cost of reducing emissions in the sector. Half of UK residents did not fly abroad, and a third of all international flights were taken by the top 5 per cent of travellers, classed as anyone who takes more than five round-trip flights a year, the CCC said. 

“The principle is that the polluter pays,” said Topping. “There are some real fairness considerations here.”

The CCC forecast that the costs borne by the industry lowering emissions, which would run into the billions in total, would add about £150 to flights to Alicante in Spain and roughly £400 to the price of a ticket to New York. 

But Tim Alderslade, head of industry body Airlines UK, warned that the suggestions would “put holidays out of reach for millions and turn the clock back to a time when flying was the preserve of the rich”. 

“You can’t solve the climate crisis by pricing Britain out of the skies,” he added.

Heathrow said the report “acknowledges” that solutions existed to reduce emissions, adding: “Heathrow expansion cannot be a choice between economic growth and net zero — it must deliver both.” 

The House of Commons transport committee is scrutinising the planned policy for Heathrow’s expansion, which the government needs to adopt before the airport can formally apply for planning permission. 

Rachel Reeves, the previous chancellor, resurrected the proposal for a new runway and expressed an ambition for Heathrow to begin construction work in 2029, with a new runway operational by 2035, a timeline viewed with scepticism in the industry. 

Green Party MP Siân Berry said the CCC’s report “could not be clearer” on the climate impacts of airport expansion and that the government now needed to “abandon its reckless plans to push through the huge mistake of allowing a third Heathrow runway”.

Silviya Barrett, from the Campaign for Better Transport, said the report demonstrated ministers should “focus on providing cleaner, more sustainable alternatives to flying”, such as long-distance trains to replace short-haul flights. 

The Department for Transport said any expansion proposal “would need to align with our net zero targets” and promised to study the CCC’s report.

US military reveals it has weapons in space

Security experts warn announcement could result in the proliferation of weapons by other governments

The US military acknowledged for the first time on Monday that it has weapons in space, as China and Russia grow their military programmes in orbit.

“The United States now has on-orbit space control weapons capable of defending the joint force against hostile adversary action,” air force secretary Troy Meink said at an Air & Space Forces Association conference in Maryland.

Meink declined to say what the weapon was or detail its capabilities but said his exact phrasing was “important from a deterrence perspective” and further elaboration on “what we’re doing would actually not benefit that deterrence”.

He added that the US needed to make sure it could “operate freely” in space and that it was an important arena for American military and economic security.

Meink’s announcement comes as the Trump administration rushes to build out space capabilities for its “Golden Dome” missile defence shield. The air force secretary said on Monday that there was now “flight-ready hardware” for space-based interceptors, a defining Golden Dome feature that would intercept attacking missiles in space.

However, space security experts warned the US’s disclosure about an orbital weapon could result in the proliferation of space weaponry by other governments.

The US Space Force defines “space control” as defensive or offensive “activities required to contest and control the space domain”, with space superiority being the goal. In its warfighting framework, the service has said that orbital strikes can include the use of both kinetic — or physically destructive — weapons and non-kinetic ones.

Space control, which can happen in space and on Earth, could include attacking a satellite ground station or jamming a satellite communication, said Clayton Swope, the deputy director of the aerospace security project at the Center for Strategic and International Studies think-tank.

But Swope, a former CIA technical intelligence officer, said Meink was “too vague” to properly deter China and Russia.

“They would need to know more about the destructive potential of the weapon and what general line — even a hazy understanding of the line — they would have to cross before the US would use it,” he added.

Victoria Samson, chief director of space security and stability for Secure World Foundation, suggested that the weapon was a space-based jammer, given the US’s policy to avoid actions that result in debris, which would happen in a kinetic attack.

Samson added that the air force secretary’s announcement could “backfire as a deterrent” if China or Russia were to acknowledge similar weapons.

“This becomes a self-enforcing cycle and eventually someone is going to use one of those weapons,” she said.

Sam Lair, a fellow at the Foreign Policy Research Institute, said: “This will now be something US adversaries or other countries can point towards to justify new or existing counter-space programmes”.

While he was sceptical Meink’s announcement would spark entirely new counter-space programmes from other nations, “it will provide rhetorical ammunition for boosters of existing or new programmes elsewhere”.

How Switzerland turned tax competition into a national sport

The country’s 26 cantons compete fiercely for companies, wealthy residents and the taxes they bring

As countries across Europe compete to lure the world’s wealthy and their money, Switzerland has a peculiar advantage: it has spent decades competing with itself.

European governments are wrestling with how much they can tax highly mobile companies and wealthy individuals without driving them away — or how much they should offer to persuade them to come. Greece and Italy, particularly, are stepping up the competition to draw people and business in Europe.

But Switzerland has been conducting its own version of this experiment for decades. Its 26 cantons compete fiercely for companies, wealthy residents and the taxes they bring. When there is a dispute over where someone really lives, rivals can end up in court, with judges examining everything from water bills and supermarket shopping to toilet paper purchases to decide which canton gets to collect the tax.

Politicians are happy to join in. Heinz Tännler, finance director of low-tax Zug, has suggested that left-run cities such as Zurich drive away the taxpayers his canton attracts. He has described them as some of Zug’s most useful economic promoters.

The latest prize in this cantonal contest is Vontobel. The 102-year-old private bank said last month that it would move its headquarters and more than 1,500 employees from Zurich to a new campus in Baar, in Zug, from 2030. About 300 client-facing staff will remain in central Zurich.

For Zurich, it is unquestionably a loss. A prominent headquarters, jobs and tax revenues will cross the cantonal border. The move has revived debate over whether Switzerland’s largest city is doing enough to compete with its lower-tax neighbours.

The country’s highly decentralised federal system gives cantons wide powers over taxation, while municipalities also set their own rates. The result is something akin to international tax competition compressed into a country of 9mn people.

Lucerne this year narrowly dethroned Zug as the canton with Switzerland’s lowest corporate tax burden (11.66 per cent vs 11.71 per cent), compared with about 19 per cent in Zurich and 14 per cent in Geneva. For wealthy individuals the gaps can be wider still: the top personal income tax rate is about 22 per cent in Zug, compared with more than 40 per cent in Geneva. Schwyz, next to Zurich, has meanwhile become a favourite home for wealthy residents drawn by some of the country’s lowest personal tax rates.

SGS, the testing and inspection group that had long been headquartered in Geneva, completed its move to Baar in Zug this year. The company had said the “value creation” — or financial benefits — of moving to Zug, including incentives, was twice as high as relocating to another office in Geneva.

Geneva is responding to concerns. Its voters approved a corporate tax overhaul in 2019 that sharply reduced rates for many companies and backed cuts to personal income tax in 2024. And now the canton is pursuing another prize. Millennium Management, one of the world’s biggest hedge funds, is in discussions with the canton over a tax deal as it considers expanding its presence there.

Vontobel says tax was not behind its move. The bank needed space to bring together staff spread across seven Zurich buildings. Baar offered a modern campus, good transport links and room to expand. Daniel Leupi, Zurich’s finance chief, has also pushed back against suggestions of an exodus from his canton. Only one other company among the city’s 50 biggest corporate taxpayers has moved to a lower-tax canton over the past decade, he wrote in the Neue Zürcher Zeitung.

There are limits to playing Zug at its own game. Leupi estimates that cutting Zurich’s cantonal profit tax rate from 7 to 6 per cent would cost the city SFr150mn ($183mn). Replacing that revenue would require companies employing about 75,000 people. Zurich, he argues, simply does not have room for them.

That gets to the clever part. A company moving from Zurich to Zug is a defeat for Zurich, but not necessarily for Switzerland. Baar is little more than 20 minutes by train from Zurich. Companies and taxpayers can cross tax borders without leaving the same economic region, let alone the country.

Other governments are trying to decide how much sovereignty they can monetise to attract the global rich. Switzerland has made its cantons compete to do much the same thing.

“It’s good to try to be better than your neighbours,” said a Swiss executive at a business industry association. “That’s the way our federalist system works.”

A top London lawyer wants to create ‘the California of Europe’ in the Algarve

Neel Sachdev helped take a wrecking ball to London’s legal market, to then rebuild it. Now his side hustle as a property developer is turning his attention to Portugal

“Welcome to Portugal!” says Neel Sachdev, stepping out of his red open-top 1977 Mercedes 450 SL in a matching red outfit, sunglasses and trademark beaded bracelets on both wrists. 

The car is on brand for the British-Indian lawyer, who had already texted five photos of the vehicle to me that morning, including one with his Gucci tennis racket holder in the back. Sachdev tells me he bought the car, which arrived from the Netherlands that week, as a throwback to his childhood watching high-glamour American TV series such as Hart to Hart and Dallas. 

As we edge towards Sachdev’s holiday house in the hills of Santa Bárbara de Nexe, amid Europe’s fourth heatwave of the summer, I feel like I am entering another orbit. Sachdev’s orbit.

Sachdev has become a well-known figure in London’s Big Law scene. In 2023, he staged a coup, defecting from Kirkland & Ellis, the world’s largest law firm, to join arch-rival Paul Weiss, where he is now global vice-chair and head of the London office.

Since then, he has grown the UK arm of the elite Wall Street firm from a satellite office of about 15 lawyers to 275, and taken a wrecking ball to the capital’s legal market. Sachdev’s build-out acted as a catalyst for a new wave of investment by US law firms, as American lawyers sought to service their lucrative private equity clients in Europe. The influx of firms has led to lawyers switching employers at an unprecedented rate in London, and top partners now earning upwards of $20mn a year.

“There’s definitely more of a star culture,” Sachdev, a private equity specialist, says. “I’ve helped clients with finding divorce lawyers; drafting wills. The model is the consigliere model. You’re the go-to lawyer, point person . . . I play tennis regularly with probably 10,” says Sachdev, whose resident doubles tennis partner in London is the perennially cheery TV chef Ainsley Harriott (not a client).

We are in Portugal to visit Sachdev’s side hustle. In 2022, a real estate investor neighbour and now business partner went to the Algarve and found a plot of land, a former orange grove, ripe for development. 

After checking with his astrologer in India — also used by Indian Prime Minister Narendra Modi, Sachdev says — Sachdev co-invested in the plot and built a house. (He also called on his astrologer before leaving Kirkland, and says he sometimes takes the same astrological approach to prospective Paul Weiss hires.)

Today, 10 more houses are under various stages of construction to rent or sell on the land, named Laranjeiras — “orange trees”. The total plot cost €1.5mn and the houses, which all range in size between 5,000 and 6,000 square feet and have pools, were valued at more than €3mn apiece this year, Sachdev says. They are expected to be finished by 2028.

While many high-earning lawyers own multiple holiday homes and some passively invest in real estate, few have rolled up their sleeves for something as ambitious.

As I step inside the completed four-storey property, I catch a glimpse of the 25-metre pool in the garden, a non-negotiable for Sachdev, a keen swimmer. A bowl of goggles sits in the middle of the outside table. The kitchen side is filled with electric appliances designed by Dolce & Gabbana. Classical music hums through the network of slick speakers. 

The interior is minimalist, all wooden furniture and white walls. In the basement there is a gym. Sachdev’s Portuguese personal trainer also works with English football players Jadon Sancho and Rio Ferdinand, he says. 

On a tour, he tells me to touch the trunk of one of his garden statues of the elephant-headed Hindu god Ganesh, a nod to his heritage, for luck. “I have a great antiquities dealer,” says Sachdev, as if I might have doubted it.

Within 30 minutes of the photographer arriving, Sachdev, 51, has invited him to snap his birthday party the following week. Champagne from the year of his birth will be served. “Everything is an opportunity, it’s never a burden,” says Sachdev. “My kids say I’m toxically positive.”

Sachdev is channelling that positivity into a bet that the opportunity in Santa Bárbara de Nexe will pay off. He believes the region has the potential to become the “California of Europe”. United Airlines started a seasonal direct flight from New York to Faro airport, 15 minutes from the plot, last spring in response to an influx of Americans to the region. Indeed, it has the same sunny climate as the Golden State. 

Sachdev’s venture here is an extension of what he has quietly been doing in London for 20 years. He lived in Hackney before it was cool, where he met his neighbour and business partner, and the pair co-invested in real estate in the burgeoning area. “I found it fascinating from an entrepreneurial perspective,” says Sachdev. “The whole thesis of my career is no different to property investing . . . you have to be entrepreneurial, you have to be thoughtful about risk, and you have to hustle.”

His business partner, who has also built his own house on the plot and lives there, manages the development day-to-day. The pair have hired local builders, architects and interior designers. Portugal is “very open to external investment. There’s a lot of local talent here,” says Sachdev.

While real estate is always a bet, the country has gained a reputation for its friendly attitude towards wealthy individuals over the past 14 years. More than 12,700 golden visas — residency in exchange for investment — have been granted, not including family members, since the Portuguese programme started in 2012, according to government statistics.

Covid-19 spurred Portugal’s popularity further as people rethought their lifestyle set-ups. The most sought-after schools in Lisbon, two and a half hours north of Santa Bárbara, have waiting lists as demand outpaces supply, the International School Advisor, a schools search engine, said in April.

Houses in the Algarve have increased from an average asking price of €2,367 per square metre in December 2020 to more than €4,000 this year, according to online real estate platform Idealista.

Sachdev says that he saw the main risk as being whether the bottom dropped out of the Algarve market while they were building. However, the project was partly personal — driven by the advice of a client to create a place that appealed to his kids to spend time with him as they got older. Sachdev says, “We will be very, very exclusive about who we sell to.”

Jack Harris, a partner at Knight Frank, said that supply still hasn’t caught up with demand for real estate in Portugal post-financial crisis. He also notes a lot of national interest in the Algarve; Santa Bárbara is a more peripheral neighbourhood that is expected to appreciate. “The standalone detached villas . . . are the most attractive product.”

Unlike some of the neighbouring towns that are populated with celebrities, business people and athletes — retired footballer Luís Figo’s house is visible on a far hilltop from Sachdev’s house — Santa Bárbara feels less polished and has more local life.

“I don’t want to sit in Nobu here. I want to sit in the local beach shack and eat the best octopus in the world,” says Sachdev. “Also, it doesn’t shut down. A lot of the islands in Europe, they sort of shut down for winter. We like coming here for Christmas and going for walks on the beach.”

The town, a five-minute walk away, has a clutch of restaurants, cafés, a mechanic and even a vet, with an old church in the centre. There is little glamour but lots of old-style charm. A plaque on the wall of one restaurant dates it to 1895. Sachdev has been trying to purchase the entire row. The local owners aren’t willing to sell.

We bypass the town and drive in Sachdev’s Range Rover to lunch at a popular place, 2 Passos, near the beach. It’s fully booked this time of year, but a quick call to local fixer — Simon, the “sheriff of Santa Bárbara” — and we’re eating octopus salad and king prawns.

Life was not always this way. Sachdev’s Indian parents emigrated from Kenya to the UK in the 1970s when Idi Amin, the “butcher of Uganda”, was expelling South Asians from his country. His father had worked in an oil refinery and his mother was a teacher, but without equivalent UK qualifications they started a corner shop in London’s Clerkenwell, an inner-city suburb on the cusp of regeneration.

Every day at 5am, the shop would deliver newspapers to Alexander McQueen and other local fashion houses. Sachdev would help out in school holidays. “What I learnt from my parents, including working in the shop . . . was just service . . . just be responsive, be helpful,” he says.

Sachdev’s parents prioritised education, spending most of their income on their children’s private school fees. His background was never highlighted at the prestigious City of London School, he says, but became more of a differentiator when he started at UK “magic circle” law firm Freshfields. “Nobody looked like me,” says Sachdev. “All the partners were: white man, grey suit. So I felt more left out there.”

I ask Sachdev between sips of Aperol Spritz what he’s going to do when he retires from the law. UK lawyers tend to leave the profession by 60. “I’ve always wanted to run for London mayor”.

Sachdev thinks he could make the city more attractive to the ultra-wealthy again, while also ensuring money is fed back into the state.

I’m tempted to view the conversation as a flight of fancy, but the morning after I arrive back in London I see he’s sent me a text: “Epic day with the FT!! Thinking about London mayor too . . . ”

Ørsted boss says Europe must act on ‘unfair’ Chinese wind turbine makers

Danish wind farm developer backs efforts by the EU to clamp down on China manufacturers with access to state support

Europe must act against Chinese wind turbine makers that benefit from “unfair” state support, but cannot afford to close itself off from global supply chains, the boss of Danish wind farm developer Ørsted said.

Rasmus Errboe hailed the wind power sector as a “European industrial success story” as he backed efforts by the EU to clamp down on Chinese manufacturers with access to large government subsidies.

“Competition needs to happen on fair and equal terms,” he told the FT. “We’ve in recent years seen the European Commission being much more active in addressing unfair trading practices. I see this as a necessary and also natural development.”

EU officials are keen to protect the European wind industry and prevent it from replicating the fate of the continent’s solar industry, which has been decimated by competition from cheaper rivals from China. The OECD found Chinese solar companies received the most subsidies of any manufacturers in the sector by a “significant margin”.

The Commission is currently investigating Goldwind, the world’s largest turbine manufacturer, over whether it benefited from unfair subsidies to outcompete European rivals. The chief executive of German turbine maker Nordex, José Luis Blanco, has called for “non-western” companies to be banned from selling turbines to the EU under cyber security rules.

The EU is concerned about developing an over-reliance on high-value Chinese technology that would leave it dependent on the trade partner. In the wind sector, this includes key components such as gearboxes and blades, but there are fewer worries about lower-value parts used in these components.

Saying his priority was a “thriving” European wind sector, Errboe said: “If you look at the entire value chain for wind, this obviously does not mean closing ourselves off to the outside world. Developers and equipment manufacturers benefit from access to a global supply chain.”

China’s presence in Europe’s wind turbine industry is small, accounting for less than 3 per cent of new turbine capacity last year, according to the Global Wind Energy Council. Chinese turbine manufacturers’ attempts to break into the sector have been restricted, with leading company Ming Yang shut out from the UK’s offshore market on national security grounds.

European wind is on track for a record year, with 24GW of capacity set to be installed in 2026. Wind provides about a fifth of Europe’s electricity. Wind Europe, the trade body, says total offshore and onshore wind installations will grow to 436GW by 2030

The record installation marks a turnaround for a sector that was heavily disrupted by Russia’s full-scale invasion of Ukraine, which drove up borrowing costs.

But it is still short of the EU aim to install 500GW of wind production as part of an aim for 42.5 per cent of Europe’s energy needs to come from renewables by 2030.

The Commission is under pressure from member states including France to replace a later 2040 renewables target with a “clean energy” version that would include nuclear deployment.

Errboe, who on Wednesday takes over the rotating chair of Wind Europe, said he was not against a target that included nuclear but called on Europe to set specific goals for wind deployment at an EU and member-state level.

“You’re going to need many different technologies,” he said.

The European Court of Auditors has recently criticised Europe for failing to invest sufficiently in renewables deployment. Fossil fuel imports are costing about €500mn extra per day compared with before the outbreak of the war in Iran in February, according to Commission president Ursula von der Leyen.

Patrick Drahi’s sale of 50% stake in OXG will deprive joint venture partner Vodafone of potentially substantial future earnings

Vodafone will miss out on over €1bn of potential earnings after Patrick Drahi struck a deal to sell his stake in their German broadband joint venture OXG, in a move which saw the billionaire escape liability for previously agreed payments.

The UK telecoms group was in line to receive deferred payments of €487mn and a potential €595mn earnout from Drahi’s Geodesia Holding, provided OXG achieved certain milestones and business performance objectives. 

However, Société Générale, which agreed to acquire Drahi’s 50 per cent in OXG this month, will not be subject to the same commitments, according to people familiar with the deal terms. Vodafone has not informed investors of the change.

The FTSE 100 group said its decision to partner with Drahi had provided “the best option between rollout funding certainty and strategic flexibility, and that was reflected in the terms that were agreed”. 

“We’re supportive of their exit and replacing them with SG as a committed investor,” Vodafone added. 

At the time that Vodafone partnered with Drahi’s telecoms business Altice to launch OXG in 2023, the French-Israeli billionaire was already grappling with the impact of higher interest rates on his telecoms empire, which had been financed with billions of dollars of junk debt.

New Street Research analyst James Ratzer said that Vodafone’s choice of Drahi, who in June agreed a deal to sell his French telecoms business SFR for €20.35bn to alleviate debt problems, as its partner had proven “to be the wrong one”.

“Given Drahi’s guarantees [on OXG] were renewed last year and he is due to receive cash from the SFR deal, we are surprised Vodafone has walked away from its expected proceeds,” he added. 

Xavier Niel acquired a 16 per cent stake in Vodafone in July, becoming the FTSE 100 company’s largest shareholder. The French telecoms billionaire has since increased his stake to 19 per cent.

OXG committed to spend €7bn to roll out fibre broadband to more than 7mn homes in Germany over a six-year period following its launch. However, higher-than-expected build costs have slowed progress, with the network reaching just 1mn homes as of September 2026.

The first of Drahi’s deferred payments was not due until OXG passed 1.5mn homes and Vodafone had not been expecting to receive any payment until at least its 2028 financial year, according to a person familiar with the matter.  

Drahi’s stake in OXG has been heavily scrutinised by creditors to his telecoms group Altice International after he controversially shifted his holding in the broadband venture — along with several other assets — out of the reach of lenders owed €8bn.

For Vodafone, the lost earnings come as it is being forced to repay the additional income it received from a €5-a-month price increase that it imposed on broadband customers in Germany in 2023.

The European Court of Justice last week ruled that EU telecommunications law does not give providers an automatic statutory right to unilaterally amend their general terms and conditions.

New Street Research estimates that the ruling could cost Vodafone between €100mn and €200mn in repayments.

Altice declined to comment.

The discussions follows a decision by OpenAI CEO Sam Altman not to pursue a public offering this year.

OpenAI has held early conversations with investors about a new funding round that could lift its valuation to $1.2 trillion or higher, according to people familiar with the conversations. The conversations come as OpenAI has pushed off a planned initial public offering to next year or later.

The potential funding follows interest by some investors in a new round, said one of the people. The company last announced a $122 billion funding round at a valuation of $852 billion, including the new investment, in March. Since then, its estimated value on the secondary market, as tracked by Caplight, has risen past $1 trillion as its Codex coding product gained in popularity and its recently released GPT-6 Astra model outperforms competitors in some areas. The Financial Times first reported on the funding talks.

OpenAI had previously planned an IPO as soon as late this year. But CEO Sam Altman said recently that an offering this year didn’t make sense amid rising concerns about AI safety. Rival Anthropic has been working on a planned IPO expected to be $1.5 trillion or higher.