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(Bloomberg) — Prosus NV is looking to sell its Russian classifieds ads business Avito, the latest international company to dispose of assets in the country following the invasion of Ukraine in February. 

The disposal plan comes after the Dutch e-commerce giant earlier moved to “decouple” itself from its biggest Russian asset two months ago. Analysts have previously valued the business at about $6 billion. 

“Following completion of the operational separation, Naspers’s Prosus has now decided to exit the Russian business,” the company said in a statement on Friday. “We have started the search for an appropriate buyer for our shares in Avito.”

Prosus, majority owned by South Africa’s Naspers Ltd., also expects to write off the value of its 27% stake in social-media group VK for $769 million.

The internet giant has about 4,000 people employed at Avito, and its OLX Europe business, which is based in Amsterdam, also has a team of around 350 employees in Ukraine.

Prosus shares traded as much as 3.8% higher on Friday in Amsterdam.

Companies exiting Russia include include Goldman Sachs, McDonald’s Corp. and Carlsberg A/S. Oil majors Exxon Mobile Corp., BP Plc and Shell Plc have cut ties with their Russian partners.

 

 

 

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(Bloomberg) — THG Plc stock soared after the embattled online shopping emporium rejected a 2.1 billion-pound ($2.6 billion) offer and drew interest from acquisitive entrepreneur Nick Candy. 

The Manchester-based business rebuffed a proposal of 170 pence a share from UK e-commerce investor Belerion and US hedge fund King Street Capital Management, saying it significantly undervalued the company. Its rejection late on Thursday came just minutes after Candy, a property developer-turned-technology investor, announced he was mulling a bid for a company that has endured a dramatic decline in its share price since floating in 2020. 

Shares in THG were up more than 26% at 8:47 a.m. in London Friday. 

It is the latest development for a company which was a stock market darling when it floated, attracting investment from SoftBank Group Corp., but has since been dogged with concerns about its governance and the growth prospects of its Ingenuity unit, a platform which helps brands sell their products online.

THG’s founder Matthew Moulding said in November that he regretted floating the company and fueled takeover speculation by hinting he may take the business private again. 

Formerly known as the Hut Group, the retailer was started by Moulding and John Gallemore, who now serves as chief financial officer, in 2004. It began selling CDs but today operates hundreds of websites selling beauty, skincare and health-food products as well as helping rivals sell online via the Ingenuity division. 

Moulding has kept a tight grip on THG as a major shareholder, landlord, chairman and chief executive officer. In March, THG appointed Charles Allen as chairman, with Moulding relinquishing the role to focus on being CEO. Moulding also pledged to give up his golden share, which allows him to veto a takeover, smoothing the way for THG to move its listing to the premium segment of London’s Stock Exchange. 

THG said last month it had received approaches from parties looking to acquire the online shopping emporium, but none were acceptable. 

Belerion is an investment advisory firm that specialises in e-commerce and technology investing. It was founded by Iain McDonald, who is currently a non-executive director on THG’s board. McDonald has previously worked at investment banks Numis and Charterhouse and worked as the chief investment officer at the William Currie Group.

King Street was founded in 1995 and has $20 billion of assets under management. 

The consortium has until June 16 to make a firm offer for the business or walk away under UK takeover rules. Candy Ventures Sarl, the holding company for Candy, also has until then to decide whether to make an offer.

Candy is best known in the UK for working alongside his brother Christian in driving the development of the One Hyde Park luxury residential development in London’s exclusive Knightsbridge district. 

Since then he has invested in a number of companies, including technology businesses. He built up a stake in podcasting platform Audioboom Plc, which has been the subject of takeover speculation, as well as scooping up augmented reality startup Blippar after it went into administration. He was part of a consortium that failed in a bid for Chelsea Football Club earlier this year. 

 

 

 

(Updates with additional information on Belerion Capital in ninth paragraph)

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(Bloomberg) — Stocks in Europe and US equity futures pushed higher Friday after China’s latest measure to bolster its economy injected a note of optimism at the end of another volatile week for global markets.

The Stoxx Europe 600 index added more than 1% at the open. Basic resources led the advance as industrial metals rallied. Consumer products were the only sector in the red as luxury-goods business Richemont slumped after an earnings miss. Shares rose in Japan, Hong Kong and China, while US futures gained about 1%, shrugging off modest losses on Wall Street on Thursday. 

Treasury yields rose along with yields on European bonds, and the dollar held its biggest one-day drop since 2020. Oil was steady near $111 a barrel. 

Chinese lenders lowered the five-year loan prime rate by a record amount in an effort to boost mortgages and loans amid a property slump and Covid lockdowns. The move “comes as a big surprise, and is without doubt a positive in terms of raising the market’s sentiment,” said Niu Chunbao, a fund manager at Shanghai Wanji Asset Management.

Rebounds in risk sentiment have tended to fizzle this year. Investors continue to grapple with concerns about an economic downturn, in part as the Federal Reserve hikes interest rates to quell price pressures. Global shares are on course for an historic seventh week of declines. 

“Inflationary pressures look very much persistent at the moment,” Lale Akoner, senior market strategist at BNY Mellon Investment Management, said on Bloomberg Television. “The biggest risk right now is developed-market central banks might trigger a recession. We are increasingly suspecting that they made a policy mistake.”

Traders in the US will be bracing for more volatility later Friday due to the monthly expiration of options tied to equities and exchange-traded funds. The process is notorious for stirring up market swings.

UK consumer confidence fell to its lowest level in at least 48 years after surge in the cost-of-living left people more gloomy than at the depths of the 1970s energy crisis. That may give the Bank of England reason to move carefully in raising rates further. The U.K. stock benchmark climbed 1.4%, while the pound was steady and gilts yields rose.

In the latest developments over Russia’s war in Ukraine, the Senate passed a more than $40 billion Ukraine aid package, sending the bill to President Joe Biden for his signature.

What damage will be done to the US economy and global markets before the Fed changes tack and eases policy again? The “Fed Put” is the theme of this week’s MLIV Pulse survey. Click here to participate anonymously.

Some of the main moves in markets:

Stocks

• The Stoxx Europe 600 rose 1% as of 8:23 a.m. London time
• Futures on the S&P 500 rose 0.8%
• Futures on the Nasdaq 100 rose 1.2%
• Futures on the Dow Jones Industrial Average rose 0.6%
• The MSCI Asia Pacific Index rose 1.5%
• The MSCI Emerging Markets Index rose 1.9%

Currencies

• The Bloomberg Dollar Spot Index rose 0.1%
• The euro fell 0.2% to $1.0566
• The Japanese yen fell 0.1% to 127.97 per dollar
• The offshore yuan rose 0.6% to 6.6823 per dollar
• The British pound was little changed at $1.2468

Bonds

• The yield on 10-year Treasuries advanced three basis points to 2.86%
• Germany’s 10-year yield advanced three basis points to 0.98%
• Britain’s 10-year yield advanced three basis points to 1.90%

Commodities

• Brent crude fell 0.3% to $111.65 a barrel
• Spot gold rose 0.3% to $1,846.48 an ounce

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(Bloomberg) — Zilingo Pte has fired co-founder and Chief Executive Officer Ankiti Bose, deepening a dispute over accounting practices that’s plunged the once high-flying startup into crisis and sent shockwaves through Singapore’s technology industry.

Zilingo ousted Bose after an investigation led by an independent forensics firm into complaints of serious financial irregularities, it said in an emailed statement on Friday. The company “decided to terminate Ms Ankiti Bose’s employment with cause, and reserves the right to pursue appropriate legal action,” it said in the statement.

Bose said in a separate statement to Bloomberg News her employment was terminated on grounds of “insubordination.”

The development underscores deepening difficulties at Zilingo after Bose was suspended from her duties March 31. Kroll Inc. is leading a probe into its finances.

The co-founder has been locked in a feud with the board and major Zilingo investor Sequoia Capital India amid allegations of potential accounting irregularities. Bose has disputed the claims of wrongdoing, Bloomberg News has reported.

The startup Bose created with Dhruv Kapoor in 2015 is now the target of an investigation into its financial practices amid complaints of serious irregularities, Zilingo said on Friday. Creditors of Zilingo have decided to recall their loans, prompting the company’s board to appoint an independent financial adviser for options for the troubled Singapore-based fashion tech startup.

“I have been suspended for the last 51 days on the basis of an anonymous whistle-blower complaint, and today I am informed that my employment has been terminated inter alia on grounds of ‘insubordination’,” Bose said in a statement.

Read more: Zilingo Appoints Financial Adviser as Creditors Recall Loan

Some of the concerns relate to the way that Zilingo, which regulatory filings show had not filed annual financial statements since 2019, accounted for transactions and revenue across a platform spanning thousands of small merchants.

Zilingo’s directors talked regularly in mid-April to consider Bose’s future, and that of the startup itself, Bloomberg reported April 19. The co-founder, meanwhile, had pressed the board to clarify her status in part because she was concerned the company was growing rudder-less.

As the clash between Bose and the board escalated, Bose hired an attorney to fight back against what they have described as a “witch hunt.” Bose has argued that she is getting blamed for decisions and practices that were well known by senior managers and directors, people familiar with the matter have said.

Zilingo had been one of the highest-profile startups to emerge from Singapore. Major investor Temasek Holdings Pte has expressed concern the meltdown is tainting its reputation and urged the company to fix the situation, people familiar with the matter have said.

The company raised $226 million at a valuation of $970 million in 2019 when Bose was 27 years old. But the Covid-19 pandemic took a toll on its business: Revenue dropped by about a third in fiscal 2021 to roughly $40 million. Bose took a pay cut of about 30% as a result, while the company laid off staff.

(Updates with Bose’s and company’s comments from the fourth paragraph)

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(Bloomberg) — Here’s the key business news from London-listed companies this morning.

M&C Saatchi Plc: The advertising house has agreed a takeover deal with London-listed Next Fifteen Communications Group Plc, valuing the company at about £310.1 million.

• The agreed deal trumps a rejected offer made by AdvancedAdvT Limited, who sought the support from the company’s shareholders after failing to win the board’s support — the rival bidder said they’re now considering their options 

Playtech Plc: Talks between the gaming software developer and TTB Partners are making progress, the company said this morning, setting June 17 as a deadline for an offer to be made.

• The deadline comes after a six month-long restricted period ended today, which prevented TTB from making an offer

Wincanton Plc: The UK-based supply chain partner appears to have managed rising prices, delivering earnings that beat the average analyst estimate.

UK Retail Sales: The latest data for April shows that retail sales including fuel have fallen 4.9% year on year, slightly better than estimated

• Data released overnight showed UK consumer confidence fell to its lowest level in at least 48 years in another sign that the worst inflation in four decades is threatening the recovery from the pandemic

Outside The City

The pressure on Labour leader Keir Starmer is likely to build after yesterday’s news that Boris Johnson won’t be fined again for breaking coronavirus regulations. 

In Case You Missed It 

British entrepreneur Nick Candy is considering an offer to buy Manchester-based THG Plc, while the online retailer announced it rejected a rival bid. That’s as Bloomberg Opinion’s Chris Hughes writes that stars could be aligning for private equity to launch a fresh shopping spree in the UK. 

And party like it’s 1952: Here’s what’s on luxury offer during the celebrations of the Queen’s Platinum Jubilee.​​​​​

Looking Ahead

Supermarket Marks & Spencer Group Plc is the highlight of next week’s earnings, along with a number of other companies. 

On Monday, we’ll find out how higher interest rates and soaring inflation have impacted the property market as Rightmove data on house prices for May is released. 

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(Bloomberg) — China’s property loan growth slowed to the lowest pace in over a decade due to the continued slump in the real-estate market brought on by developer defaults, virus lockdowns and weak consumer confidence.

Outstanding loans in the property sector grew 6% to 53.2 trillion yuan ($8 trillion) at the end of March from a year ago, the slowest pace of expansion since data began in 2009, according to a statement released Friday by the People’s Bank of China. The growth rate was down from 7.9% at the end of 2021.

Residents’ mortgages rose 8.9% to 38.8 trillion yuan from a year ago, slowing from the 11.3% increase at the end of last year, while outstanding property development loans grew after dropping for three straight quarters. 

China’s home sales slump deepened in April, with preliminary data from the China Real Estate Information Corp showing an almost 60% decline in sales by the top 100 developers. The drop came with major cities such as Shanghai and Changchun under lockdown, and consumers stayed away even as purchase restrictions were loosened in more than 60 cities.

The average interest rate on new mortgages offered in March stood at 5.42%, down 17 basis points from the start of the year, the PBOC said in the statement. That decline comes after the five-year loan prime rate, which is a reference for the interest rate for many home loans, was cut to 4.6% in January.  

The sector’s persistent downturn has prompted the central bank to step up its support for several distressed developers by loosening loan restrictions to ease a cash crunch last month, Bloomberg reported. That comes after the central bank called on banks to boost real-estate lending in the first quarter.

(Corrects scope in the first paragraph in a story first published on May 6.)

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(Bloomberg) — SpaceX paid an employee $250,000 to settle a claim she was sexually harassed by Elon Musk in 2016, according to a report from Insider. 

The closely held rocket launch company, of which Musk is founder and chief executive officer, made the payment in 2018 to an unidentified flight attendant who worked as a contract employee on a SpaceX corporate jet, the online news provider said, citing interviews and documents, including a declaration signed by a friend of the attendant and made in support of her claim.

In a series of late night tweets responding to followers, Musk hit back at the article, saying the accusations are “utterly untrue.” He then called the source of the story a “liar” and said the article was a “hit piece” designed to interfere with his acquisition of Twitter Inc.  

In an earlier tweet that didn’t directly refer to the Insider report, Musk said “the attacks against me should be viewed through a political lens” but that nothing will deter him from fighting for “your right to free speech.” 

The billionaire, who since announcing his $44 billion bid for Twitter has promised to make it more of a free-speech platform, on Thursday said he’s given up on Democrats and will now vote Republican.  

The attendant alleged that Musk exposed himself and propositioned her in a private room on the plane during a flight, according to the friend, the report said. Musk offered to buy the attendant a horse in exchange for an erotic massage, it said. 

Representatives for Hawthorne, California-based Space Exploration Technologies Corp. didn’t immediately reply to a request for comment. 

(Adds more Musk tweets in third paragraph.)

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(Bloomberg) — SpaceX paid an employee $250,000 to settle a claim she was sexually harassed by Elon Musk in 2016, according to a report from Insider. 

The closely held rocket launch company, of which Musk is founder and chief executive officer, made the payment in 2018 to an unidentified flight attendant who worked as a contract employee on a SpaceX corporate jet, the online news provider said, citing interviews and documents, including a declaration signed by a friend of the attendant and made in support of her claim.

In a series of late night tweets responding to followers, Musk hit back at the article, saying the accusations are “utterly untrue.” He then called the source of the story a “liar” and said the article was a “hit piece” designed to interfere with his acquisition of Twitter Inc.  

In an earlier tweet that didn’t directly refer to the Insider report, Musk said “the attacks against me should be viewed through a political lens” but that nothing will deter him from fighting for “your right to free speech.” 

The billionaire, who since announcing his $44 billion bid for Twitter has promised to make it more of a free-speech platform, on Thursday said he’s given up on Democrats and will now vote Republican.  

The attendant alleged that Musk exposed himself and propositioned her in a private room on the plane during a flight, according to the friend, the report said. Musk offered to buy the attendant a horse in exchange for an erotic massage, it said. 

Representatives for Hawthorne, California-based Space Exploration Technologies Corp. didn’t immediately reply to a request for comment. 

(Adds more Musk tweets in third paragraph.)

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(Bloomberg) —

The UK’s market regulator is paying close attention to the chaos in crypto markets after the implosion of Terra, one of the biggest experiments in decentralized finance.

The recent market instability in stablecoins “will absolutely need to be taken into account” when the watchdog starts working with the Treasury to develop and implement new rules for cryptoassets later this year, said Sarah Pritchard, executive director for markets at the Financial Conduct Authority.

“Innovation lasts if it works well, and clearly, we’ve seen the consequences and some of the issues that can arise,” Pritchard, who oversees the FCA’s work on crypto, said in an interview on Wednesday. Nearly 70% of adults that are 40 or younger who bought crypto had incorrectly assumed that digital assets were regulated, she said, citing an Opinium survey published by the FCA in October. 

Pritchard’s comments come in the wake of the collapse of TerraUSD, a stablecoin which used algorithms and swaps with its sister token Luna to maintain its peg to the US dollar, rather than a reserve of dollar-equivalent assets. The two tokens had a combined market value of more than $40 billion before the wipeout, which also knocked around $380 billion off the wider crypto sector. 

Stablecoins are an essential part of the crypto ecosystem, used by traders as a means of retaining a flat value without needing to convert tokens back into fiat currency. Investors can turn to them as a safe haven for their portfolio during periods of volatility, or simply as a means of digital payment.

“It really shows at front of mind the really significant issues that exist here, both in terms of a well-functioning market and obviously consumer protection,” Pritchard said. “In the last week where we saw significant price movements, it brings that into the fore and it shows the importance of making sure that people understand that that is a risk of where they put their money.”

The Treasury said in April that it intends to amend existing legislation for electronic money and payments firms to include stablecoin issuance and the provision of wallets as well as custody services. Firms that dabble in stablecoin activities might require supervision by the Bank of England as well as authorization by the FCA if their services are used by a large number of consumers, due to the systemic risks they might pose.

Brexit Becomes Key Part of UK’s Pitch to Win Back Crypto Firms

So far, the FCA has largely been limited to ensuring that crypto companies meet its standards on anti-money laundering rules. An effort to bring the industry up to scratch saw only 34 of more than 100 applicants meet the bar. The UK watchdog is set to gain new powers from the Treasury to handle cryptoasset regulation later this year, with further details to be announced in the upcoming Financial Services and Markets Bill. 

The regulator held its CryptoSprint event earlier this month to act as a listening exercise in advance of those changes. The two-day event was attended by around 100 participants including the regulator’s CEO Nikhil Rathi and senior staff, FCA-registered crypto firms, industry bodies, investment banks and firms from across professional services. The session was “significantly oversubscribed,” Pritchard said, with more than 640 applicants.

Topics that were discussed during the event included whether the FCA should create a bespoke regulatory regime for crypto and its ability to enforce rules across geographical borders, according to two attendees who were not authorized to speak publicly about the event. Participants were particularly concerned about the pace of releasing new regulation and the custody of cryptoassets, they said. They were also worried about the current environment of crypto exchanges acting as the de facto guardian for riskier areas such as decentralized finance when determining which tokens are suitable for listings.

A spokesperson with the FCA declined to comment on the discussions but said the event was “hugely positive,” with two virtual sprints to follow in early June. 

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(Bloomberg) — Joe Biden embarked on his first presidential trip to South Korea and Japan, where he’s set Friday to visit a Samsung Electronics Co.’s semiconductor complex as he seeks to bolster supply chains that reduce reliance on China.

In a visit that runs through Tuesday, Biden will meet with regional leaders in a bid to firm up support for his plans to help Ukraine fend off Russia’s invasion and counter security threats posed by China and North Korea, which may conduct its first nuclear test since 2017 with Biden nearby. 

Biden’s trip to the Samsung facility underscores the emphasis he’s placed on strengthening semiconductor alliances among the world’s largest chip making countries to try to ease shortages that have dragged on the global economy. The complex in Pyeongtaek, south of Seoul, houses the some of biggest chip production lines in the world and makes a wide range of products from memory chips to logic chips for Qualcomm Inc. and other companies.

Samsung is responsible for a third of global memory chip production and controls just less than 20% of outsourced chips for tech clients. South Korea’s largest company has been expanding its facilities at home and in the US to keep up with soaring demand.

The Biden administration has been pushing Congress to approve a broad China competition bill that includes $52 billion in funding for domestic semiconductor research and manufacturing. The president has recently gotten personally engaged in urging Congress to act. 

“Pass the damn bill and send it to me,” Biden said earlier this month. “If we do, it’s going to help bring down prices, bring home jobs, and power America’s manufacturing comeback.”

Read more: Biden Demands Passage of China Bill as Democrat Skips Ohio Event

Lawmakers, meanwhile, still have to work out differences between the Senate- and House-passed versions of the legislation, a process that could take until the end of the summer.

The White House has often used the continuing global semiconductor shortage and its impact on inflation as arguments for approval of the massive subsidies program. But analysts say the shortage will last through 2023, and the domestic supply of chips coming online will not meaningfully alleviate the crunch.

Samsung announced new investment plans in the US late last year. The company chose Texas in a $17 billion plan as the site of an advanced chip plant set to break ground this year, with a target to kick off operations in the second half of 2024.

Face-to-Face meetings

Biden is set meet new South Korean President Yoon Suk Yeol soon after arrival. The conservative Yoon, who took office on May 10, has backed support for Biden’s supply chain initiatives and intends to join a new regional economic grouping the US president is expected to unveil in Japan.

The US and its partners also will kick off the Indo-Pacific Economic Framework, part of the Biden administration’s efforts to counter China’s clout in Asia, following the US’s withdrawal from talks on the Trans-Pacific Partnership regional trade agreement under former President Donald Trump

Read more: South Korea President to Support Biden’s New Economy Grouping

Some details framework’s details remain hazy, and the Biden administration has stressed it won’t include lower tariffs or better access to US markets. 

Nuclear threat?

North Korea, which has a habit of timing its provocations to political events, may be preparing to launch an intercontinental ballistic missile or conduct a nuclear test to coincide with Biden’s trip to the region, security officials in the US and South Korea said this week. 

Read more: Biden Has Little to Entice Kim Jong Un to Stop Weapons Tests 

The U.S. push to isolate Russia over Vladimir Putin’s war in Ukraine, coupled with increasing animosity toward China, has allowed North Korean Leader Kim Jong Un to strengthen his nuclear deterrent without fear of facing more sanctions at the United Nations Security Council. 

There’s little chance Russia or China would support any measures against North Korea, as they did in 2017 following a series of weapons tests that prompted Trump to warn of “fire and fury” from Pyongyang. 

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