Sunday, June 20, 2021

CATEGORY

Business

Morrisons rejects £5.5bn takeover offer from private equity firm

Morrisons has rejected a £5.5bn takeover bid from a private equity firm, believing it would have “significantly undervalued” the company.Private equity firm Clayton, Dubilier & Rice (CD&R) had earlier said it was considering a possible cash offer for the supermarket chain.Morrisons said it rejected a conditional cash offer from CD&R of 230p per share – which amounts to just over £5.5bn.Morrisons said: “The board of Morrisons evaluated the conditional proposal together with its financial adviser, Rothschild & Co, and unanimously concluded that the conditional proposal significantly undervalued Morrisons and its future prospects.“Accordingly, the board rejected the conditional proposal on 17 June 2021.”CD&R had earlier said in a statement that it “notes the press speculation regarding a potential transaction involving Morrisons and confirms that it is considering a possible cash offer for the issued and to be issued share capital of Morrisons”.It said there was no certainty an offer would be made.CD&R’s statement followed a Sky News report that it had made a preliminary bid approach to the supermarket group’s board that could value Morrisons at £5.5bn.Bradford-based Morrisons is Britain’s fourth-largest grocer by sales, trailing market leaders Tesco, Sainsbury’s and Asda.Shares in Morrisons, down 3% over the last year, closed on Friday at 182p, valuing the group at £4.33bn.A bid for Morrisons would have followed Walmart’s recent sale of a majority stake in Asda to the Issa brothers and private equity firm TDR Capital.That deal valued Asda at £6.8bn and followed Sainsbury’s failure to take over Asda after an agreed deal was blocked by Britain’s competition regulator in 2019.Morrisons has a partnership agreement with Amazon and there has been persistent speculation that it could emerge as a possible bidder.

US private equity firm considers bid for Morrisons

SharecloseShare pageCopy linkAbout sharingimage copyrightReutersUS private equity firm Clayton, Dubilier & Rice is considering making a cash offer to acquire Morrisons, the UK's fourth-largest supermarket group.It has 28 days to make a formal bid for the company or withdraw.The company said it "notes the press speculation regarding a potential transaction" and it confirmed it was considering a possible offer.It has previously made investments in the discount shop chain B&M, from which it made more than £1bn.BBC business correspondent Katie Prescott said the flurry of takeover activity had been fuelled by the relatively low share prices of businesses in the UK compared to abroad, and cheap money because of low interest rates. Morrisons - with its £1bn property portfolio, most of which it owns - and its 10% of the grocery market - is an attractive proposition, our correspondent added.No price tag has yet been put on the business.Morrisons hails 'renaissance of the supermarket'People return to supermarkets as online sales slowLast month, Morrisons said sales had had increased by 2.7% in the 14 weeks to 9 May, saying the pandemic had led to a "renaissance of the supermarket" as Brits enjoy cooking at home more.But it added that in the previous three months alone it had faced a £27m bill for Covid-related costs.

Hassan Rouhani: The life and legacy of Iran's 'Diplomat Sheikh'

Iranian President Hassan Rouhani will leave office in August after nearly eight years in power - a period of diplomatic turmoil and financial hardship for many Iranians. Following the presidential election on Friday, cleric Ebrahim Raisi is set to succeed Rouhani, in a result that will delight the country’s conservatives, who staunchly oppose social reform and reviving ties with the West, and dismay reformers, the camp who helped Rouhani to power. Raisi was elected president with 61.95 percent of the vote, according to figures released by Interior Minister Aboldreza Rahmani Fazli. The three other candidates had conceded defeat earlier on Saturday. "I congratulate the people on their choice," said Rouhani. Governing amid a constant battle with the conservative establishment, the president leaves behind a legacy of negotiating with the West through his nuclear policy and opening up the internet and social media to ordinary Iranians. Rouhani attending a press conference in Paris in September 1985 while serving as President of the Defence Committee in the Iranian Parliament (AFP) Rouhani, originally named Fereidoun after a king in Persian mythology, was born in 1948 in Sorkheh, a county in Iran’s north-central Semnan province, his family home for generations.  His father owned a grocery store, but Rouhani followed the path of his grandfather and great grandfather, who were Shia clerics.  Rouhani left his county, and school, aged just 12 to study at the Semnan seminary. One year later, in 1961, he transferred to another training school in the holy city of Qom, south of Tehran. Clerics and seminary staff frowned on non-religious education, but Rouhani was undeterred and secretly studied for a diploma. He once said that if the seminary found out anyone was studying, they would be expelled. But he got away with it: Rouhani took the national exam and was admitted to the University of Tehran’s law school in 1969. For a year, the young Rouhani commuted between Qom and Tehran. But after marrying, he decided to leave the seminary for the capital.   It was around that time that Rouhani began in earnest his revolutionary fight against the US-backed Shah, although he was first apprehended for speaking out against the autocratic leader aged just 16. Courting Khomeini Gradually, he turned into a popular religious speaker, giving talks in cities like Tehran and Isfahan.  In 1977, when he was chosen to speak at the mourning ceremony for the eldest son of Rohollah Khomeini, the leader of the 1979 Islamic Revolution, he surprisingly called him “Imam”, a term used for the 12 figures seen by Shia Muslims as the divine and political successors to the Prophet Muhammad.  This, Rouhani later wrote in his memoirs, was a nod to Khomeini’s revolutionary status and a comparison to the Prophet Abraham, who is told by God: “I am making you the Imam of mankind” during his own revolution. At the seminary, Rouhani often faced jibes about his last name, Fereidoun, as it was not deemed befitting of a future ayatollah, which is the term for a senior religious leader in Shia Islam. He gradually began using the family name Rouhani but did not change it legally.  Rouhani, second right, seen among companions of opposition leader in exile, Ayatollah Ruhollah Khomeini, centre, walking out of his villa in Neauphle-Le-Château near Paris, France, on 31 January 1979, days before his return to Iran (AFP) This turned out to be a stroke of luck in 1979 when he fled Iran for the UK. He was only able to escape because the Shah’s secret police were searching for a Rouhani. In Britain, he studied law at Lancaster University, going on to teach Islamic law and the philosophy of evil. He was then admitted to Harvard University, Cambridge, Massachusetts, USA. But the triumph of the Islamic Revolution put an end to his academic ambitions, prompting a swift return home. Rouhani's rise Ali Khamenei, who was then Supreme Leader and deputy head of the defence ministry, tasked Rouhani with forming the army’s religious wing. Then, one year later, aged 31, Rouhani ran in parliamentary elections and was elected. He was later chosen as the chairman of the parliamentary defence commission. Together with then-parliament speaker Ayatollah Akbar Hashemi Rafsanjani, who later also became president, Rouhani formed a secret group composed of MPs from the left and right, under the name The Council of Wise Men, to find a way to end the ongoing, eight-year-long Iran-Iraq war quickly. Iranian president Mohammad Khatami, right, laughs with former deputy parliament speaker and new member of Iran's Council of Experts, Rouhani, in 2000 (AFP) Their recommendations came to nothing, but Rouhani was showing the hallmarks of a shrewd political operator. In the mid-1980s, with the war still raging, he was again involved in backdoor meetings. He was chosen to represent Iran as a negotiator with the US, which was scheming to sell Iran weapons - despite an arms embargo - in return for the release of American hostages and to help fund a right-wing rebel group in Nicaragua. Some arms were delivered to Tehran, and some US hostages freed, but the conspiracy - later known as the Iran-Contra scandal - fell apart in 1986 when it was revealed by a Lebanese magazine. In 1989, the Supreme National Security Council, tasked with making final decisions on crucial foreign policy matters, domestic security, and war, was formed, with Rouhani named as its secretary and Khamenei’s representative. Nuclear era The will of Rouhani, who was known by this point as the 'Diplomatic Sheikh', was frustrated several times during Rafsanjani’s presidency, which lasted from 1989-97. According to a former member of Rafsanjani's cabinet, the president disagreed with Rouhani’s belief that it was worth resolving disputes with the US and refused to name him as foreign minister. Rouhani faced hardship at home, too, in this period. In 1996, his 18-year old son was found dead at home. There were, at the time, three hypotheses about the cause of death: suicide, an accidental shot with a gun, and murder by an unknown assailant. The next year, Rouhani pulled out of his campaign for the 1997 presidential elections, seeing that Rafsanjani, his conservative rival, was attracting more support.  In 2003, Rouhani played a pivotal role in orchestrating the release of Grand Ayatollah Hussein-Ali Montazeri from house arrest. Montazeri was once the chosen successor of Ayatollah Khomeini, but disputes between them led to his dismissal. In the same year, the People's Mujahedin Organization of Iran (MEK), a group labelled as terrorists by Iran and Iraq, made claims about Iran’s nuclear programme, leading the International Atomic Energy Agency (IAEA) to launch an investigation. Tehran was accused of building a nuclear bomb, beginning two decades of tensions between Iran and the West.  Rouhani led the talks with three European countries (UK, Germany, and France) to solve the disputes. Still, the few deals they struck did not last long, as hardliner Mahmoud Ahmadinejad won the 2005 presidential elections, putting Tehran on the offensive, which resulted in seven UN Security Council resolutions against Iran.  When Ahmadinejad took office, Rouhani resigned from his post on the Supreme National Security Council. Rafsanjani support In 2009, Rouhani sought to run for office again. According to a source talking to Middle East Eye (MEE) on the condition of anonymity, he launched a political campaign. He even started negotiating with a moderate conservative to be his running mate. Still, when he saw popular reformist Mir-Hossein Mousavi was planning to run, he decided not to continue.  In the 2013 presidential elections, Rafsanjani, who was considered the leader of the opposition to the Islamic Republic’s favoured candidates, was surprisingly barred from running by the hardline-dominated Guardian Council, which was tasked with vetting the candidates.  Rouhani, centre, while serving as the Vice-President of the Iranian Parliament, walks with the Iranian ambassador in Rabat, Soubhani Nia, left, and Colonel Major Hassan Skali (AFP) Before the disqualification, Rouhani wanted to drop out of the race, fearful of Rafsanjani’s candidacy. Still, the ayatollah and former president told him to keep campaigning, fearing - correctly - that he would be declared ineligible.  Banned from candidacy, Rafsanjani threw his weight behind Rouhani. Reformists did the same, seeing Rouhani’s approval rating increase past those of their own candidate. Rouhani also built a reputation for eloquence in televised debates, destroying his hardline rivals by revealing new facts about them live on air.  His big promise was to put an end to the international dispute over Iran's nuclear development, which had led to heavy sanctions, torpedoing the economy and quality of life for Iranians.   Rouhani meeting with Russian President Vladimir Putin while attending a meeting of the Supreme Eurasian Economic Council in Yerevan on 1 October 2019 (AFP) When he was elected, he chose career diplomat and academic Mohammad Javad Zarif, a familiar figure with his collarless shirt, to be his foreign minister and lead nuclear negotiations. “Zarif at first didn’t accept Rouhani’s offer," a source close to Rouhani’s government told MEE, "but Rouhani insisted." "At last, Zarif was convinced by his family to lead Iran’s diplomatic apparatus," the source continued.  “There was another contender for Zarif’s post: veteran diplomat Mahmoud Vaezi, who was active during Rouhani’s campaign. Vaezi lobbied to a large extent, but he could not take Zarif’s place in Rouhani’s mind.” Obama conversation Rouhani and Zarif, who knew each other well, having cooperated extensively between 2003 and 2005 over nuclear negotiations, soon triggered separate talks with the so-called "5+1", the UN Security Council’s five permanent members (China, France, Russia, the United Kingdom, and the United States) and Germany.  In September 2013, as Rouhani was leaving New York for Tehran, he and US President Barack Obama talked on the phone for the first time, after three decades of hostility between Iran and the US. A diplomatic source close to Rouhani’s government told MEE that the “Rouhani-Obama phone conversation occurred unbeknownst to [Supreme Leader] Khamenei, who later criticised the president".  "However, the conversation paved the way for the nuclear talks as it built trust and promised a better future for the diplomatic ties between Tehran and Washington.”  Rouhani meetS with UK Prime Minister Boris Johnson on the sidelines of the 74th United Nations General Assembly in February 2019 (AFP) “At first, they wanted to meet each other," he continued, "but they didn’t reach an agreement on the joint statement they wanted to publish.” The negotiations successfully yielded a deal in 2015, which put some limitations on Iran’s nuclear programme in return for sanctions relief. Tired of destructive sanctions, jubilant Iranians took to the streets to celebrate the deal. The country’s economy also started to rejuvenate.  But the Joint Comprehensive Plan of Action faced serious opposition from hardliners, who did not want reformists and Rouhani to be credited with the dubious honour of giving in to the US. ‘Maximum Pressure’ campaign In November 2017, Republican presidential candidate Donald Trump defeated his rival Hillary Clinton, unexpectedly taking over the White House. A few months later in June, Iran’s elections took place as a heated contest between the Reformist-backed Rouhani and hardline cleric Raisi, who had the whole establishment behind himself. Rouhani’s strong presence in the debates and fierce and appealing speeches prompted the reformist base to cast their votes favouring the president. While the economy was improving, Trump fulfilled his promise to his voters by exiting from the 2015 nuclear deal, spawning a freefall of Iran’s rial value. At the same time, Iran’s economy began shrinking with the US putting sanctions on Tehran’s oil sales. For nearly four years, Rouhani fought Trump’s “Maximum Pressure” campaign. Still, it was very costly for him as his political and economic resistance in the face of the US was accompanied by increasing pressure on people’s livelihoods.  This turned the once highly popular Diplomatic Sheikh into the least popular politician among Iranians while at the same time delivering a huge blow to the Reformists who supported the president.  With the JCPOA on the verge of destruction, hardliners and the establishment - the Islamic Revolutionary Guards Corps (IRGC) and the leadership - were determined to end another legacy of Rouhanis by blocking Instagram popular messaging application Telegram.  The hardline judiciary subsequently banned Telegram, but Rouhani’s administration successfully resisted the blocking of Instagram while simultaneously bringing most of the country's rural areas under the umbrella of 4G internet.   Protests nadir What discredited Rouhani to a large extent was the 2019–2020 Iranian protests over increases in gasoline prices.  In response to nationwide demonstrations, the security forces opened fire on people across the country, reportedly killing as many as 1,500 people.  In a televised address, Rouhani warned the protestors their faces had been recorded on camera and that they would be punished. Such remarks diminished Rouhani’s popularity.  Amnesty International reported that Iranian security forces shot protestors at close range during demonstrations in 2019 (Reuters) However, a source told MEE that: “Rouhani was warning the IRGC and security apparatus, not the people.  “Because Rouhani believed his opponents inside the establishment had triggered the protests by provoking people to come to the streets.  “Rouhani’s administration believed they wanted to overthrow the government.” The shooting down of a Ukrainian passenger plane on 8 January 2020, and the consequent death of 176 people, further exacerbated frustrations when Rouhani’s government initially denied any role in the incident.  However, it was later disclosed that the IRGC had mistakenly targeted the plane. In reaction, Rouhani’s government officials declared that they had been unaware of the facts, but this was too late as they had been portrayed as dishonest. Rouhani also faced further criticism for his handling of the Covid-19 outbreak. The pandemic proved more deadly in Iran than anywhere else in the region, killing more than 80,000 people by the official count. Fighting for legacy As Rouhani prepares to leave office in August officially, he is striving to leave at least one lasting legacy: the revival of the 2015 nuclear deal.  In this vein, Iran and the US have been in indirect talks over the past two months and appear to be close to reaching an agreement.  The establishment had apparently put pressure on Rouhani not to announce the revival of the deal before Friday's elections as it would boost the chance of the Reformist candidate Abdolansser Hammadi. Although the Diplomatic Sheikh’s era is coming to an end, he has successfully turned the issue of negotiating with the West and providing access to the internet and social networks into critical issues in the eyes of people, ultimately forcing even hardline candidates to support the same positions in public debates in order not to lose votes.

How the Middle East can benefit from Biden's Build Back Better agenda

US President Joe Biden’s first official foreign trip has provided clear rules of the road for countries looking for how American foreign policy will operate over the next three years. A number of countries in the Middle East, in particular, are wary of how Washington is going to play its role under Mr Biden. Those countries that did not welcome the reversion to the status quo ante policies of former president Barack Obama are hoping they can still transact with the US. The countries that did welcome the change Mr Biden brought about remain unsure about the future. Is this a four-year interregnum before policies pursued by the previous Trump administration return? Or will the Biden administration’s tilt to the Indo-Pacific mean that the US becomes a de facto marginal player in the region? Read More from Damien McElroy If the G7 meeting is anything to go by, the Biden team is laying down frameworks that will strongly influence the Middle East. Its reliance on global mechanisms, however, means that there is not much talk about the region in the policy rollout. It was telling about America that Russian President Vladimir Putin did not even mention Syria, Iran or Libya at the news conference that followed his summit with Mr Biden in Geneva last week. Mr Biden did discuss Iran but not in any great specifics. It is not from Geneva but from the G7 summit in the UK that we get a better sense of where the Middle East is headed with Team Biden. The administration has brought forward many personnel from the Obama White House, but the US is likely to struggle to take up the reins where the old team left off. The Middle East Peace Process, or the two-state solution between Palestine and Israel, stands formally as a priority. The events on the ground last month were a first test for the Biden administration. But many people in the region now do not see America's role as that of a mediator pushing and supporting the differing actors to come to the negotiating table. This matters most whenever tensions erupt and open conflict breaks out, as happened in Gaza last month. As such, there is already a pattern of the US managing the situation but not transforming it. The Belt and Road Initiative has been criticised as a plan to extend China’s influence. EPA What have been called the region’s forever wars – in Iraq, Syria and Yemen, to name but three – are likely to feel the brunt of some of the global policy approaches the Biden team has set out. So, too, is the constant and growing challenge from Iran. The restoration of the JCPOA nuclear deal only sets a new baseline for the relationship. Once that rollout has been complete, much of the agenda between Washington and Tehran will be opened up. The G7 backed Mr Biden’s Build Back Better World (B3W) agenda. The architects of this policy framed it as a rival to China's Belt and Road Initiative. But the narrative put in that way misses the importance of B3W for the Middle East. The vulnerability of the region to climate change is well known. Efforts to address and reverse these threats are frankly non-starters in all but a handful of countries such as the UAE. For instance, the drought ravaging Syria, Iraq, Jordan and other countries is crying out for green development policies. The Biden administration has great potential to engage with policymakers in these countries on that basis. If a country such as Jordan has real help with resource efficiency and the development of a circular economy, led by the US and its partners, the incentives around Washington’s foreign policy will only grow. This is also true in the case of Iraq, where aid can help fight problems such as biodiversity loss and increase constructing capacity to develop in areas such as green energy. If that country's economic system is made fairer, greener and more resilient in partnership with the US, another step away from integration with the failing Iranian model can be achieved. Iraqi environmentalist Omar Al Sheikhly leads a team into the marshes in search of endangered animals, in Chibayish. Without quick action, Mr Al Sheikhly fears the delicate underwater ecology of the Unesco-protected site will be disrupted. AP Photo A water buffalo walks on the remnants of an old military road built in the marshes by Saddam Hussein during the Iran-Iraq war, in Chibayish, Iraq. AP Photo Water buffalos wade in the waters of the marshes after feeding on grass in Chibayish, Iraq. Conservationists issued a stark warning that without quick remedial action, the Unesco-protected site could wither away. AP Photo A member of Iraq's marsh communities collects reeds, which are typically sold or used locally in Chibayish, Iraq. Conservationists fear the Unesco-protected site could wither away without timely action. AP Photo Pied Kingfisher birds take flight from a marshland where the number of many bird species are on the decline, in Chibayish, Iraq. AP Photo Pied Kingfisher birds rest on trees extending from the marshes in Chibayish, Iraq. AP Photo A man collects reeds from the wetlands that will later be sold or used for domestic use, in Chibayish, Iraq. AP Photo Fishermen unload the day's catch from the marshes on to vehicles in Chibayish, Iraq. AP Photo The architects of B3W have framed it as a rival to BRI. But that narrative misses its importance for the Middle East After all, Iran itself has few coherent policies in place to protect its land and rivers from natural ravages. Tehran, therefore, has nothing to offer Washington as a partner. Its vulnerabilities from climate change will only grow. At a time when the EU is in tandem pushing a €1.8 trillion ($2.1tn) green growth plan, the region is looking at how it can be a supplier to this development. A pipeline for hydrogen going across from Saudi Arabia through Jordan, for example, will boost all sides. One of the most significant Biden appointments is that of Samantha Power as the head of USAID, a development agency with a seat in the White House National Security Council. This is a strong signal for a push to use extra aid as part of the American strategy in Syria, and perhaps Yemen. Establishing the alleviation of human suffering where possible and de-escalation of the conflict should allow for basic stabilisation efforts to follow on. The stalled UN-led diplomatic process in Syria desperately needs Russian support to move forward. US commitment of resources to Syria, including the freedom of humanitarian shipments, is likely to provide a strong signal to Moscow. Russia wants to position itself as a leader of reconstruction in Syria, as well as preserve the gains from its intervention in the conflict. The provision of American resources will only have a mobilising effect on Russian readiness to engage. There is little or no room for Iran in this dynamic. As Mr Biden remarked recently, countries invest in diplomacy in their own self-interest. Global policies can drive a real engagement with the Middle East. Damien McElroy is the London bureau chief at The National

The State of Paytech in the Middle East: Digital and Disruptive

When focusing on the Fintech scene in the Middle East, the clear leader in the region comes from paytech. Whether that’s payment solutions for businesses, e-wallets or digital/electronic payments, paytech is a sector that is particularly thriving, with around 85% of MENA fintech firms operating in the payments transfer and remittance sectors. We spoke to several leaders in the industry to understand some of the key trends currently in the paytech space, as well as some of the challenges and what the future holds for the sector.Rise and XarePadnimi Gupta, CEO and Co-Founder, Rise and XareRise and Xare’s CEO and co-founder – Padmini Gupta, believes that digitisation is one of the key trends in the space.  “The digitisation of money will lead to a big win for tech-savvy business and paytechs in general. We see this digitisation as a huge opportunity for rise because of our focus on migrants who have largely used cash as a means of payment. Our entire product range allows for migrants to save, protect, and share their money without the use of cash.” “My home country is the US, and I see it’s been a hotbed of big tech getting in on finance. With the launch of apple family pay, a proposition that actually validates Xare’s proposition of sharing money, we feel that there is an opportunity for growth even in the most developed of markets.”MamoMohammed El Saadi, CEO and Co Founder, MamoMohammad El Saadi is the co-founder and CEO of Mamo, a Fintech start-up based in the UAE. He agrees with Padmini, and said that though digital payments have been around for a while, the focus in MENA has been on digitising e-commerce payments and online card acceptance.  “Digital wallets are actually a relatively new space for the region. There is a very real gap in the market when it comes to easy movement of money for and by individuals. We still see a huge reliance on cash and bank transfers which can be quite cumbersome. “When it comes to small businesses, getting access to a payment gateway is a long and painful process, sometimes taking over two months to set up. While the demand exists, the lack of immediate and responsive services and the presence of high fees make the adoption of digital payments slow. “Despite the challenges, there is a growing demand for customer-centric payment solutions. We are witnessing some major trends in paytech in the MENA region. According to Juniper Research, digital wallet users are expected to exceed 4.4 billion globally by 2025, up from 2.6 billion in 2020. The UAE is currently spearheading in this space through increased collaboration between fintechs, banks and the government.“The pandemic has shifted the landscape for SMEs with more home-businesses popping up than ever before. 82% of UAE businesses said their investments in digital payments will play a major role in their business recovery, and when asked about payment habits during the pandemic, 60% of them mentioned that contactless payments were the preferred payment option among their customers.“Increasing demand along with government initiatives has propelled the development of a robust PayTech ecosystem of local and international investors, technology companies along with accelerators and incubators that will further promote innovation and development of excellent products and services that could compete with their Western counterparts.”The BENEFIT CompanyYousif AlNefaiei, Deputy Chief Executive – Business Development & Services at The BENEFIT Company,Yousif AlNefaiei, Deputy Chief Executive – Business Development & Services at The BENEFIT Company, joined BENEFIT in March 2006, bringing over 25 years of industry experience.  He agrees that digitisation is a key trend currently, but also believes e-commerce is gaining more and more traction in the region. “The Middle East & Africa is a promising region when it comes to e-commerce,” he said. “It has a much bigger role to play now in the region as the majority of businesses and SMEs have to transition and create an online presence. According to a whitepaper by DHL, the global B2B e-commerce market size will grow by 70% and will reach $20.9 trillion by 2027, and 80% of all B2B sales interactions between suppliers and business buyers will take place online. Payments are a crucial part of that shift of moving operations online. “There will be more online payment solutions and services designed specifically for SMEs in the region. Adoption of paytech to digitise payments and attract rewards is helping SMEs extract value for their business.”Though digitisation is seen as a huge opportunity in the fintech space, Yousif also warns that we will likely see more criminal activity because of it. He said: “There are a few challenges I’d like to definitely highlight. One, there are long-standing cultural factors driving the preference for cash payment in this region. Two, are the rising rates of cybercrime and fraudulent activities in MENA. Usually, our region hasn’t been a target for these attacks but due to the rapid digitalisation happening, this has led to an opening of new gateways for cyberattacks.   if we want to witness rapid growth in online and digital payments, we need to bridge the gap between preventing fraud and cyber risks and ensure a seamless and quick user experience. MagnatiRamana Kumar is the Chief Executive Officer of MagnatiRamana Kumar is the Chief Executive Officer of Magnati, which is the payments subsidiary of First Abu Dhabi Bank (FAB). “Paytech in MENA is going through massive disruption driven by technology changes and behavioural changes of consumers,” he said.  “The challenges around core payments services revolve around providing invisible and seamless payments experiences and ensuring no fraud or compromise in parallel. In addition, the challenge of differentiating and moving beyond the base of core payments services creates the opportunity for value-added services such as platform services and next-generation technologies that reduce IT investments for merchants and corporates. Magnati offers innovative solutions that help businesses unlock payments growth opportunities.In terms of the future for payments, Ramana believes that seamless, frictionless and invisible payments will be the way forward. “Payments will no longer be transactional but instead, will act as a base for new revenue opportunities for all merchants and corporates. Magnati is using technologies like AI and machine learning to help transform payments data into new ways of attracting customers, introducing products and increasing sales. The future is all about a single platform that can provide many options through custom API integration. Polly Jean HarrisonPolly is a journalist, content creator and general opinion holder from North Wales. She has written for a number of publications, usually hovering around the topics of fintech, tech, lifestyle and body positivity.

Private equity group CD&R makes bid for UK’s Morrisons

US private equity group Clayton, Dubilier & Rice has bid to acquire supermarket chain Wm Morrison in a deal that would take Britain’s fourth-largest grocer private, according to two people with direct knowledge of the matter. One of these people said that the board of Morrisons, which has a market value of £4.3bn and £3.2bn in net debt, was meeting on Saturday to discuss the merits of the approach. The company declined to comment.CD&R is working with Goldman Sachs on its bid, another person added. A statement clarifying its intentions could be released later on Saturday. The exact value of an offer could not be immediately learnt but Sky News reported that CD&R was weighing a bid for Morrisons that would value the company at around £5.5bn. CD&R and Morrisons declined to comment.The approach highlights private equity’s growing appetite for UK assets and in particular, supermarket chains. Buyout groups have announced bids for at least 12 UK-listed companies since the start of this year, as Brexit and the pandemic weigh on share prices. It is the fastest pace of take-private attempts for more than two decades, figures from Refinitiv show. The CD&R approach comes as competition regulators this week cleared a £6.8bn deal by the owners of petrol station retailer EG Group, billionaire brothers Mohsin and Zuber Issa and private equity firm TDR Capital, to buy the UK’s third-largest supermarket chain Asda. CD&R counts Sir Terry Leahy, the former chief executive of Tesco, among its advisers. Andrew Higginson, the current Morrisons chair, worked alongside Leahy at Tesco for many years. It is also an investor in EG Group’s petrol station rival, Motor Fuel Group. The management team at Morrisons led by chief executive Dave Potts, has attempted to turn around the performance of the business since 2015, including by striking partnerships with Amazon and Deliveroo.However, the market has not rewarded them. Shares are lower now than they were when Potts took over and have fallen 6.3 per cent over the past year, compared with a rise of 11.5 per cent in the FTSE 100 index of top UK companies in which it was a constituent until earlier this year when it was relegated.Earlier this month, 70 per cent of shareholders rejected its pay arrangements. In the year to the end of January, the company reported an 8 per cent increase in same-store sales although total revenue grew only 0.4 per cent to £17.5bn because of sharply lower fuel sales.Covid-related costs affected profits, with net income rising 0.5 per cent to £96m. It employs 118,000 staff, according to Capital IQ. Analysts have long speculated that the group might fall to a bidder attracted to its cash generation and, like third-placed Asda, a high proportion of freehold stores.CD&R has been among the more active private equity firms in the UK market this year, agreeing a £2.8bn deal to buy the UK-listed healthcare services group UDG and a £308m deal for Wolseley, the plumbing business. 

GSK faces struggle to convince investors as activist Elliott lurks

Emma Walmsley, GlaxoSmithKline chief executive, faces a struggle to win over key shareholders after Elliott Management attracted converts for radical change at the pharma group, according to leading investors.Ahead of GSK’s investor day next week, activist investor Elliott has sown doubt about whether Walmsley should stay to push through the transformation planned for the group after it spun off its consumer health division last year. One top-20 shareholder said some investors were attracted by a change of management after discussions with Elliott, which took a multibillion pound stake in GSK earlier this year. “Her background is in consumer rather than healthcare, which may be why,” he said. Another large shareholder said it appeared that Elliott did not want Walmsley to lead the pharma business and may also be pushing for a separate initial public offering of GSK’s vaccine unit, breaking the company up even further than planned. Elliott declined to comment.At the event on Wednesday, shareholders are likely to ask whether GSK should be spending so much playing catch-up in cancer drugs, and if it should be trying instead to bolster its near-term pipeline to compensate for the loss of exclusivity on some HIV drugs later in the decade, or focus on next generation therapies five to 10 years out. Even shareholders that have yet to decide whether to back Elliott’s efforts are closely watching the investor day. One large asset manager said they were “very much looking forward to the capital markets day” and hearing what Walmsley has to say.The GSK chief executive will focus her presentation — which kicks off a days-long investor roadshow — on the promise of “new GSK”, trying to prove she has the clear vision to refresh the drug pipeline, if given the time to do so. Luke Miels, president of GSK, who runs the commercial business, compared the company to AstraZeneca, where he used to work, which was also behind in oncology but has now rocketed ahead. “I think these things take time and then I can remember meeting investors with Astra and being challenged about progress in oncology,” he said. “I think it’s about picking the right assets and moving forward. And we’ve got a number of opportunities coming through.” Walmsley will offer the first long-term financial forecasts for the company, detail the future of its dividend policy, and present her decision on whether to demerge and do an initial public offering of the consumer healthcare unit, or simply spin it off. It will be tough to please all shareholders, who range from investors eager to see an IPO of the consumer business to fund investment in innovative medicines, to those concerned that a listing would simply mean they had to buy the shares again. “I want to know what is emerging with the promise from the pipeline and [have] confirmation the consumer business will be demerged, not IPO’d, as I own it already and don’t want to have to buy it to shore up their balance sheet,” said the second shareholder. The GSK board and executive team have been meeting with the top-40 shareholders in the run-up to the event.  “Shareholders are telling us that they are very supportive of the strategy we have set out, and they want us to get on with delivering it and not get distracted,” the company said.Additional reporting by Arash Massoudi

Saudi Arabia to tap into the debt capital market to finance Vision 2030

Saudi Arabia’s debt capital market is expected to grow as the Kingdom implements its Vision 2030 goals, even though banks will continue to play an important role in financing the reform plan. We also understand that an increased amount of the funding for Vision 2030 will be moved from the central government to government-related entities and the broader private sector.Driving growth of the Kingdom’s capital markets will be an increase in bond issuance to help fund the SAR12 trillion ($3.2 trillion) reform plan. We project a gradual rise in the use of Saudi Arabian riyal-denominated bond issuance as the local capital markets develop. The US dollar is currently the currency of choice for such bonds.A gradual deepening of the local capital markets would likely increase their transparency and could reinforce corporate governance practices in Saudi Arabia in coming years. Over the past decade, the Capital Markets Authority (CMA), the Kingdom’s capital markets regulator, has undertaken several measures to develop its equity and debt capital markets and attract foreign investors. For example, there were several initiatives to improve the infrastructure and trading rules of Tadawul, the Kingdom’s stock exchange, to increase market access for investors. This paved the way for Saudi Arabian stocks to be included in the MSCI Emerging Markets Index in 2019 and FTSE Russell and S&P Dow Jones indices subsequently, further increasing the visibility of Saudi equities to global investors. Similarly, in 2020, the CMA started allowing nonresident foreigners to invest directly in listed and non-listed debt instruments. We have also seen an increase in listed debt issuances by Saudi corporates, particularly government-related entities (GREs), which represented about 90 percent of the about $26 billion listed corporate bond and sukuk issuance in 2019 and 2020.Implementation of the Kingdom’s monetary policy, however, is limited by the relative underdevelopment of Saudi capital markets. To address this, the government started issuing local currency debt and sukuk in 2015, and we expect this to continue over the next few years. We believe government debt issuance can be instrumental in addressing the absence of a benchmark yield curve and contribute to the development of the Kingdom’s debt capital markets.Private-sector issuance could follow suit in a move away from purely benchmark transactions to more strategic use of debt issuance. We have previously written that more frequent use of the capital markets will allow Saudi corporates to further diversify their funding sources, gain access to a greater variety of local and international investors and extend their funding maturity profiles. S&P Global Ratings’ analysts have observed that they would view these developments as supportive for the credit profiles of Saudi corporates.Historically, credit ratings have been used to establish issuer credit profiles and contribute to a better understanding of credit quality, inform investors and diversify funding sources. S&P Global Ratings, for instance, provides GCC scale regional credit ratings for issuers in the Kingdom, offering Saudi and GCC market participants a greater differentiation among local credits within the Kingdom than is available on S&P’s global scale.The GCC scale is designed to help market participants compare the relative credit risk of issuers and issuances across the region, and is expected to contribute to better informed, more liquid and more efficient capital markets across the GCC.Given the focus on credit quality within the GCC, these regional scale ratings are not directly comparable to the global scale, or other regional or national scales.For example: We raised the long-term issuer credit rating of National Commercial Bank, which now is Saudi National Bank (SNB) following its merger with Samba Financial Group. SNB’s “A-” global scale rating and stable outlook reflects the strength of the merged entity, which also received a GCC regional scale rating of “gcAAA.” The combination of two balance sheets has created a “more balanced” credit risk profile and S&P Global Ratings expects SNB’s asset quality metrics to remain well-placed compared with its peers in Saudi Arabia and the broader GCC region. We view development of Saudi debt markets as broadly supportive of the credit profiles of the Kingdom’s banks and corporates over the long term.We believe that continued issuance by the Saudi sovereign could attract more attention from investors given their search for higher-yielding investments in an era of low interest rates. On the corporate debt market, we expect large GREs to be the main issuers at first, gradually followed by a few top corporates, rather than a general movement to the capital markets.The availability of a well-functioning domestic debt capital market can also help expand the Saudi banking system’s funding sources. Most funding now comes from core customer deposits, a large portion being short-term or on demand. As credit continues to grow, the banking system could benefit from longer-term funding from the local capital markets, which we view as more stable than cross-border funding. We note that the Kingdom’s banking sector displays an overall net surplus external asset position despite a rapid build-up of external debt on the back of softer monetary policy globally. Deeper and broader local capital markets could be positive for our view of the funding profile of Saudi banking system as a whole.• Khalid Albihlal is head of S&P Global Ratings KSA.Disclaimer: Views expressed by writers in this section are their own and do not necessarily reflect Arab News' point-of-viewCopyright: Arab News © 2021 All rights reserved. Provided by SyndiGate Media Inc. (Syndigate.info).

Private equity company closes GBP4.3m fundraise for premium bar group

Private equity investment firm Growthdeck has closed a GBP4.3 million fundraise for the new bar group Maven Leisure, completing the investment firm’s largest single raise. Maven Leisure is looking to open at least seven premium bars in central London supported by this funding. The fundraise has been structured as GBP2.3 million in EIS-qualifying equity and GBP2 million in mezzanine debt. It will be used to take advantage of very favourable conditions for acquiring prime landmark London sites. Maven’s group of bars will be anchored by a landmark new rooftop site on King William Street in the City of London, featuring an all-day, premium, indoor bar and restaurant space, with terraces heated and lit for year-round use and 360-degree views of the London skyline. Additional sites will be added in the next 12-24 months. Maven has been established by the current owners and senior management of ETM Group, an operator of 13 premium bars, pubs and restaurants in central London. These include the roof top bar Aviary, The Botanist Sloane Square and premium sports bars Greenwood and Redwood. The team has grown ETM Group from a single site to a business turning over c.GBP35m with no external equity funding and looks to use this expertise to grow Maven Leisure in a similar way. Gary Robins, Head of Business Development at Growthdeck, says: “We are thrilled to be supporting Maven Leisure at it looks to grow and take advantage of the business landscape in the London bar and hospitality sector.” “Backing the Maven management team presents a brilliant opportunity in London’s premium bar market – they have already built ETM Group to 13 high profile central London venues. This raise allows them to take advantage of highly attractive rents on prime London leisure space and build another successful business on a proven model.” Ed Martin, Chief Executive of Maven Leisure, says: “Hats off to the Growthdeck team in helping Maven raise GBP4.3 million in seven days. It demonstrates the resilience of the wet led central London market in the eyes of our new investors and is testament to the offer and the strength of the team at Maven.” The equity element of Growthdeck’s investment in Maven qualifies for tax reliefs under the Enterprise Investment Scheme (EIS). EIS is an investment scheme which allows private investors to make tax savings by investing in growth businesses. 

Private equity people moves week ending 18 June

Invest Europe appoints EBRD’s Anne Fossemalle as chairThe association representing Europe’s private equity, venture capital and infrastructure sectors, Invest Europe, has appointed Anne...

Latest news