TheChek News Flow

PensionBee to offer customers access to planned IPO

Financial technology start-up plans to offer its users shares in upcoming listing

PensionBee, the financial technology start-up, will enable customers to use their pensions to become shareholders under plans to list on the London Stock Exchange.

PensionBee will this month give an “early invitation to customers to register their interest” in its IPO, which is expected later this year. This means that they can link their pension accounts to the IPO process, and buy shares when the offer launches alongside the large institutions that tend to dominate flotations.

PensionBee has brought forward plans to list on the High Growth Segment of the LSE for this year.

About 60 per cent of the company is owned by management and staff, including founder Romina Savova, with US bank State Street the biggest external shareholder. The board is chaired by Mark Wood, former chief executive of UK insurer Prudential.

None of the existing owners expect to sell shares in the IPO. KBW Stifel has been appointed to advise on the process.

PensionBee has signed up more than 119,000 people to its pension consolidation platform since its launch in 2014. The fintech has £1.4bn of assets under management.

In 2020, PensionBee reported a 77 per cent increase in revenue to £6.3m, with growth boosted as more people relied on online channels to manage their money during the pandemic. 

Savova told the Financial Times that the company had almost doubled its users and assets under management every year since launch — and was confident that it could continue to grow at a “high double-digit” given the “large” market still to be addressed in the UK.

PensionBee’s online platform allows customers to track pensions, using their employment history to create a single plan and managed by Legal & General, HSBC, BlackRock or State Street. 

The company is working with PrimaryBid, the retail investor platform backed by the LSE, to allow customers to register their interest in buying shares ahead of its prospective IPO. PensionBee will then connect interested customers’ accounts to PrimaryBid. 

PensionBee said that a “key element” of its IPO was allowing customers to become involved. The early indications would also allow them to gauge levels of investor interest, Savova added.

“Customers can too often be an afterthought during an IPO, but our customers have always been at the heart of what we do,” said Savova. “Providing our customers with an opportunity to share in our growth journey has always been a key motivation in our reasons for listing.”

She added that investors were looking to back tech-focused companies with strong growth prospects. The government is conducting a review of the listings regime that is likely to recommend changes to the rules to attract further start-ups to London. 

Anand Sambasivan, chief executive at PrimaryBid, said that “when issuers include their communities at IPO it builds trust, loyalty and engagement”.

Talks ended after disagreement over branding of iPhone maker’s secretive effort

Apple approached Japan’s Nissan in recent months about a tie-up for its secretive autonomous car project, but talks are no longer active, according to people briefed on the matter. 

The contact was brief and the discussions did not advance to senior management levels following divisions over branding for the iPhone maker’s electric vehicles, the people added.

Apple also recently halted talks with South Korea’s Hyundai Motor and its affiliate Kia, underscoring the challenges of finding an automotive partner for its car efforts, known as Project Titan.

The Silicon Valley company’s talks with Hyundai sparked an intense guessing game over which other manufacturers could partner with Apple, with the market focusing on Japan’s eight carmakers.

Shares in Nissan briefly rose 5.6 per cent on Wednesday after chief executive Makoto Uchida signalled his openness to working with technology groups when asked during an earnings presentation whether the company had been approached by Apple. 

But one person with knowledge of the discussions said talks faltered after the US company asked that Nissan make Apple-branded cars, a demand that would effectively downgrade the automaker to a hardware supplier.

Many carmakers have expressed a fear of becoming “the Foxconn of the auto industry”, a reference to the Taiwanese manufacturing group that assembles iPhones.

Apple declined to comment.

Ashwani Gupta, Nissan’s chief operating officer, said the Japanese group “is not” in talks with Apple, whose interest in entering the auto industry goes back to 2014. 

“We have our own customer satisfaction, which comes by car. No way we are going to change the way we make cars,” Gupta said in an interview with the Financial Times. “The way we design, the way we develop, and the way we manufacture is going to be as an automotive manufacturer, as Nissan.” 

Gupta said the company was open to exploring partnerships with tech groups to adapt to the shift towards connected vehicles and autonomous driving, pointing to collaborations with Google and other start-ups. 

But he added: “We have to check who has got the best competency to catch what the customer is thinking. For this, we can do the partnership, but that is to adapt their services to our product, not vice versa.” 

Analysts have said Nissan, which has an alliance with France’s Renault and Mitsubishi Motors, could be a good fit for Apple. 

The Japanese company was a pioneer of electric vehicles with the launch of the Leaf in 2010. Nissan also has capacity in its US plants after the lossmaking group shifted from focusing on volume to profitability.

But Mio Kato, an analyst who writes on the Smartkarma platform, said Nissan lacked the scale of rivals such as Toyota to make the type of large investments required for autonomous driving technology.

Some analysts believed Apple could disrupt the automotive industry, although it is unclear what sort of technology it could provide beyond the power of its brand.

Apple has been testing driverless technologies in California for years. The company disclosed last week that its back-up drivers had to intervene once every 145 miles of testing. By contrast, Waymo, Alphabet’s self-driving car unit, and GM’s Cruise each managed to travel on average nearly 30,000 miles each before a single “disengagement”.

Paris wants member states to have more power to act against illegal content

France is pushing for the EU’s upcoming regulations on Big Tech to be changed so that member states could wield more power to punish bad behaviour and police more types of content.

Cedric O, the French minister for the digital economy, has met with senior EU officials and members of the European parliament in recent weeks to push France’s case. On Wednesday he met Thierry Breton, the European commissioner in charge of the upcoming legislation.

“We are getting pretty active in terms of talking to various people about the upcoming tech regulation,” he told the Financial Times. “Getting these laws passed is a major objective of ours for when France next holds the rotating presidency of the EU Council next year.” 

He added: “They touch on vitally important subjects both for our economies and democracies.”

France’s move risks increasing tension in Brussels, where EU regulators fear being upstaged by large member states, such as France and Germany, which are busy enacting their own laws to tackle Big Tech.

French officials want to see changes to the Digital Services Act, which sets out the responsibilities of Big Tech companies when it comes to policing the web.

Paris wants every member state to have the right to fine tech platforms and force them to remove illegal content. Currently, only countries where tech companies have their headquarters can enforce the EU’s laws.

As a result Ireland and Luxembourg, where Apple, Google, Facebook and Amazon are based, have disproportionate responsibilities in regulating Big Tech.

But EU officials worry that the French proposals will erode the EU’s single market. “This would remove one of the first pillars of EU law and it would mean that a company, instead of being subject to one regulator, is subject to 27 authorities,” said one person with direct knowledge of the discussions. “It risks fragmenting the single market into a nightmare.”

Separately, France is also pushing for the DSA to widen beyond illegal content to the policing of harmful content and disinformation. “We think the text needs to be broadened to include other types of problematic content,” said O. “If there is no legal framework there is nothing to stop Twitter or Facebook from censoring speech they do not like.”

The expansion of the DSA has taken on new importance after Facebook and Twitter banned President Donald Trump, prompting EU leaders to wonder if a legal framework should underpin such decisions.

O said he had also spent time meeting counterparts from the Netherlands and Portugal to discuss the issues.

Around the world, sports officials are asking their governments to help get shots for their athletes.

The International Olympic Committee has a complicated view of whether athletes should be vaccinated for this summer’s Tokyo Games.

The IOC won’t require Covid-19 vaccines for competition, and doesn’t want athletes to cut the line. But it’s also directed national Olympic committees to try to get shots for their athletes.

The conflicting signals show what a touchy topic the vaccine has become ahead of Tokyo. Even discussing shots for athletes can provoke hostility as a slow vaccine rollout proceeds around the world among countries eager to turn the tide of deaths, case numbers and economic downturn. Yet sports officials in dominant Olympic nations say they’re pursuing the IOC’s request anyway.

Meanwhile, a longtime IOC member asserted in strong terms the importance of vaccines to the countries participating in the Tokyo Games, now just five months away.

“Unless you’re out of your f—ing mind, you should get vaccinated before you come,” said Dick Pound, in a recent interview with the Journal.

Responses from 20 Olympic countries surveyed by The Wall Street Journal indicate that many nations are willing to risk public blowback by at least seeking to advocate on behalf of athletes’ vaccination.

U.S. Olympic officials said they had raised the matter with the White House, though they also say they aren’t pushing for Team USA’s Tokyo delegation to be vaccinated ahead of more vulnerable people.

Officials in Greece, home of the ancient Olympic Games, have “asked our government to take into account that the members of our Olympic team should be vaccinated in time,” a spokesperson said.

New Zealand’s Covid-19 response minister has said the country would consider vaccinating athletes before the Tokyo Games if their turn in the nation’s vaccine rollout didn’t come up before then. The Russian Olympic Committee says it is ready, if necessary, to provide full assistance to Russian Olympic candidates in obtaining vaccines.

Olympic leaders in Australia have said they expect to have most athletes vaccinated against the virus by the summer. The Tokyo Games are scheduled to begin July 23. South Korea’s Olympic committee said it’s gathering information on who to vaccinate and when to do it. The Croatian committee says it has a plan with its government to get athletes vaccinated, though because of “the dynamics of vaccine delivery,” it doesn’t know for sure that it will happen in time for the Summer Games.

And in Hungary, government-arranged vaccination has begun for 868 coaches and athletes, including more than 150 athletes who are preparing not for the Tokyo Games, but the Beijing Winter Olympics that are set to follow in February 2022.

Across the world, one of the hottest political questions is the distribution of a vaccine for which demand is high, supply is scarce and delivery is complex. Many countries have sought to prioritize people at high risk of complications if they contract the virus, as well as healthcare providers and other essential workers. There is fierce debate about the relative merits of each of those groups.

The idea of rushing to vaccinate athletes, especially as many schools and businesses remain closed, has prompted bitter reactions even as some public health advocates say sports stars could serve as role models for vaccination.

According to UBS, at the current rate of vaccination only about 10% of the world will be inoculated by the end of this year, and 21% by the end of 2022. Infectious disease experts estimate that the percentage of the population requiring a vaccine to achieve herd immunity is 70% or higher.

Most Covid vaccines require two doses several weeks apart, and it takes a few weeks after the second dose for the full benefits to kick in, according to the Centers for Disease Control and Prevention in the United States. That means that to get maximum protection through vaccination, athletes should have had their first shot two months before they leave for Tokyo, or around the third week in May.

Recently released Olympic “playbooks” describing virus-mitigation measures for the Games said vaccination wouldn’t be a requirement of participating in the Tokyo Games, and that the IOC supports the priority vaccination of vulnerable groups and front-line medical workers.

But one playbook also called on national Olympic committees to encourage and assist their delegations to get vaccinated in their home countries. The playbook said the IOC had sent a letter to every national committee to “actively engage with their respective governments on this matter and to report back to the IOC in early February 2021.”

The IOC said in a statement to the Journal that “this is to contribute to the safe environment of the Games, but also out of respect for the Japanese people, who should be confident that everything is being done to protect not only the participants, but also the Japanese people themselves.” It also said it had learned that “a number of national governments have already taken positive decisions in this respect.”

One question is what Olympic leaders will do with delegations from countries whose governments end up unable, or unwilling, to help secure vaccines.

The IOC didn’t respond to a question about whether it would take steps to secure vaccines for such delegations.

Among dominant Olympic nations who responded to the Journal query, only Germany and the Netherlands said that they would not discuss athlete doses with their governments until priority groups had been vaccinated. Italy said the country was in the process of forming a new government.

For some others where the conversation has begun, it remains a delicate matter. The U.S. Olympic & Paralympic Committee said that its chief executive, Sarah Hirshland, met with the White House Office of Public Engagement earlier in February and discussed “the need for Covid-19 vaccines for Team USA athletes at the appropriate time, and following distribution to priority populations, with the best case being prior to domestic trials and the Tokyo Games this summer.”

Buyout groups make flurry of approaches to London-listed companies in bet on recovery from pandemic

Private equity groups are stepping up their pursuit of British companies, capitalising on a UK stock market that has fallen even though resurgent US equities have set record highs.

Pub chain Marston’s, private jet services group Signature Aviation and power supplier Aggreko are among the London-listed companies targeted by buyout firms this year. 

The rate of approaches has picked up, with six being announced in 2021 compared to 14 in the whole of last year, according to data provider Dealogic.

The FTSE 100, London’s index of blue-chip companies, and the FTSE 250, home to companies that are smaller and typically more exposed to the UK economy, have both fallen over the past 12 months. By contrast, the S&P 500 index has recovered from a slump when the pandemic first struck and is up 16 per cent over the same period.

As well as the economic damage inflicted by the UK’s repeated lockdowns, investors say the Brexit uncertainty that hung over the market for much of last year hurt sentiment.

“This is the moment for private equity to play the role they should play, which is, inject capital at attractive returns when the time is right,” said Lionel Assant, European head of private equity at Blackstone. “I think it’s a fantastic moment to do that.” 

Although the Europe-wide Stoxx 600, a benchmark for European companies, is also down over the same period, the allure of the UK goes beyond potentially cheaper valuations. It is seen as an easier place to take listed companies private than many European countries because its thresholds for shareholder approval are lower.

The UK stock market “has undoubtedly underperformed”, and Britain’s economy “has been disproportionately affected during Covid times” compared to its peers in Europe, Assant said.

That leaves investors well placed to benefit from a recovery, he said, adding that “there is an expectation that, like in most past crises, the UK underperforms in bad times and overperforms in good times”. 

Two London-listed household names, the AA car breakdown service and the security group G4S, are already at the centre of take-private bids. Rival private equity-backed groups have been vying for G4S for months, and the AA agreed a sale to Warburg Pincus and TowerBrook last year. 

If a lacklustre UK stock market makes for an attractive hunting ground, buyout groups are also under pressure to deploy record-sized funds, especially after some slowed pace of acquisitions early in the Covid-19 crisis. The industry has about $2.5tn in so-called dry powder waiting to be spent. 

As money has flowed into private equity funds, the valuations that companies command has jumped, with the average purchase price for US leveraged buyouts hitting a record high of 13 times earnings in the first nine months of 2020, according to figures from Refinitiv LPC. 

“US markets are inflated from a valuation point of view, so investors are looking for opportunities that offer value,” said Saba Nazar, global co-head of financial sponsors at Bank of America. “I think a lot of these UK companies will be attractive targets, be it for private equity, Spacs [special purpose acquisition companies] or US and other international buyers.” 

Some UK companies hit hard by the pandemic are now receptive to private equity approaches, she said. “Finding your competitive edge after the turmoil and upheaval we’ve all seen in the past 12 months takes time, and it’s better done in a private environment as opposed to being subject to public market scrutiny.” 

Marston’s this month rejected a £693m offer from the Beverly Hills-based private equity group Platinum Equity, saying it “significantly undervalues” the business. Blackstone and Global Infrastructure Partners have made a £3.5bn bid for Signature, alongside Bill Gates’s wealth manager Cascade Investment. 

Aggreko said this month that it was in talks with TDR Capital and Miami-based I Squared Capital over a potential £2bn takeover. Other London-listed groups that have either been approached by, or agreed to be sold to, private equity firms this year include the investment platform Nucleus, the debt collector Arrow Global and the financial planner AFH. 

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