Week in Review

April 11, 2014 6:31 pm

Week in Review, April 12

Week in Review

A round up of some of the week’s most significant corporate events and news stories.

Former Barclays chief Diamond sets his sights on African conquest

Bob Diamond, ex-CEO of Barclays, leaving Portcullis House this afternoon after giving evidence at the treasury select committee©Charlie Bibby

Africa, are you ready? Bob Diamond is coming to a bank near you. The former Barclays chief executive has signalled plans to snap up more African banks after unveiling a string of acquisitions in the past two weeks, writes Martin Arnold in London.

The 62-year-old has wasted no time investing some of the $325m he raised in December by floating his cash shell Atlas Mara on the London Stock Exchange to target Africa’s booming financial sector.

He has agreed to buy BancABC, a medium-sized lender with operations in Botswana, Mozambique, Tanzania, Zambia and Zimbabwe; acquired a 3.9 per cent indirect stake in Union Bank of Nigeria; and signed a preliminary deal to buy 77 per cent of the Development Bank of Rwanda through its forthcoming privatisation. “This is the beginning,” he told the Financial Times this week. “Watch this space.”

He stepped up his charge this week by raiding the ranks of his former employer to poach John Vitalo, who is head of Barclays’ operations in the Middle East and north Africa, to be chief executive of Atlas Mara.

Observers say Africa offers a “chance of redemption” for Mr Diamond , who has invested $20m of his own money in Atlas Mara. It is a continent where his ability to bring investment far outstrips his controversial past.

His reign as Barclays CEO ended in an abrupt exit in 2012 after the UK lender was fined for manipulating the Libor interbank lending rate.

‘Heartbleed’ bug strikes fear among security wonks

One of the most significant security flaws in recent years sent technology companies scrambling this week after it was revealed that cyber criminals could access almost anything on a computer’s short-term memory, writes Hannah Kuchler in San Francisco.

Corporate Person in the news: AG Lafley

Alan G. Lafley, special partner with the private equity firm Clayton, Dubilier & Rice Inc., speaks at the World Business Forum in New York, U.S., on Wednesday, Oct. 6, 2010. Lafley was formerly chairman and chief executive officer of Procter & Gamble Co. Photographer: Craig Ruttle/Bloomberg *** Local Caption *** Alan G. Lafley

This week, Procter & Gamble chief AG Lafley showed his own distaste for cat and dog comestibles by agreeing to sell the group’s pet food brands. It represents his most significant step yet to restore P&G’s place, for a second time, as a global leader in consumer goods

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The “Heartbleed” bug was a huge hole in the security software used to protect web traffic on two-thirds of the world’s websites – a hole that had been open for two years before researchers discovered it.

Google, Facebook, Yahoo, Amazon and Dropbox were among the companies that had used the OpenSSL software and had to patch the hole. US regulators warned banks to act quickly or risk criminals impersonating their sites or stealing confidential user information and the Canadian tax authority shut down its online services for fear hackers could steal taxpayer data.

But even after updating the software, no one knows whether hackers did exploit the vulnerability and exactly what they could have had access to, from usernames and passwords to corporate intellectual property and even the private keys that are used to protect huge areas of company networks.

Cyber security experts recommended internet users change their passwords only after they were sure the service had repaired the flaw or risk hackers getting access to their new passwords.

The potential breach underlined how difficult the internet has become to secure from cyber criminals, as more and more of people’s lives are spent online. Cyber attacks rose 14 per cent last year according to Cisco, partly fuelled by underground markets that make it easier for criminals with little technological expertise to hack and partly by targeted attacks from state actors, called advanced persistent threats.

Related content: in-depth page on cyber warfare

Toyota joins GM on recall line

Toyota announced the second-largest car recall in its history this week, when it admitted that it needed to fix 6.4m vehicles for various faults, writes Henry Foy in London.

The announcement from the world’s biggest-selling carmaker was the latest in a spate of global multimillion car recalls, and came as rival General Motors drew further criticism for its failure to recall cars that it knew were faulty and were involved in accidents in which at least 12 people died.

The furore has focused attention on the speed with which global car manufacturers investigate possible faults in their vehicles, and how quickly recalls are made.

Expensive mistakes

MONROVIA, CA - MARCH 2: Chevrolet Cobalt is displayed at the Sierra Chevrolet auto dealership on March 2, 2010 in Monrovia, California. A power steering problem that has been linked to 14 crashes and one injury has prompted General Motors Company to announce that it is recalling 1.3 million compact cars throughout North America. An investigation of approximately 905,000 Cobalt models in the United States by US safety regulators reveals more than 1,100 complaints of power steering failures. Models being recalled includes the 2005-2010 model year Chevrolet Cobalt and 2007-2010 Pontiac G5 in the United States as well as the 2005-2006 Pontiac Pursuit sold in Canada, and 2005-2006 Pontiac G4 sold in Mexico. (Photo by David McNew/Getty Images)

For a look back at some of the most notorious recalls in carmaking history, from the Ford Pinto of the 1970s to this year’s GM Cobalt, pictured

Data and visual slideshow

Toyota said its recall was to repair faults in steering columns, wiring harnesses, seat rails, windshield wiper motors and engine starters. No injuries or fatalities have resulted from the faults, it added.

However, the Japanese company’s announcement spooked investors, as it echoed the carmaker’s infamous recall saga of 2009. Back then, the discovery of a sudden acceleration fault in 9m Toyota cars badly damaged the group’s reputation for quality. Toyota’s shares fell 7.4 per cent this week.

Across the globe in Detroit, GM said that it was recalling an additional 2.2m cars to fix faulty ignition switches, as its recall costs in 2014 spiralled to $1.3bn.

The US carmaker also put two engineers on paid leave as it investigates how it took more than 12 years to recall millions of cars that it knew could cause fatal accidents.

Car recalls are increasing in size and frequency as companies use more common parts across their vehicle ranges – multiplying the impact if one is found to be faulty.

Retailer Ashley looks to break up a done deal

Mike Ashley (pictured ) had a busy week. The billionaire founder of Sports Direct kicked off the week with a last-ditch attempt to gatecrash the sale of House of Fraser to Chinese conglomerate Sanpower last weekend, writes Duncan Robinson in London.

Sports Direct bought an 11 per cent stake in the department store from fellow retailer Sir Tom Hunter. The move was so last minute that it came after House of Fraser chairman Don McCarthy was pictured cracking open the champagne to celebrate a done deal.

Mr Ashley, who has earned a reputation for idiomatic business decisions, followed up this move with the sale of £200m worth of shares in Sports Direct. This move knocked nearly 10 per cent off his group’s share price.

The sale – which reduced his stake in the retailer to 58 per cent from 62 per cent – caused some analysts to question whether it was a dig at independent shareholders who last week kiboshed Sports Direct’s plans to pay Mr Ashley a bonus worth £70m.

Mr Ashley – whose influence on Sports Direct belies his title of “deputy chairman” – has a penchant for buying stakes in rivals, to the chagrin of shareholders. He oversaw the acquisition of a stake in Debenhams earlier this year and has in the past bought stakes in direct rivals, including JD Sports, outdoor leisure group Blacks and the defunct JJB Sports.

French telecoms war comes to end with €17bn deal

A bruising public battle over who would buy France’s second-biggest telecom operator SFR came to an end this week, with a €17bn victory for European cable group Altice over rival Bouygues, writes Michael Stothard in Paris.

The six-week saga ended with Altice, which intends to merge SFR with its French subsidiary Numericable, paying the seller, Vivendi, €13.5bn and giving it a 20 per cent stake in the resulting company.

Vivendi turned down a competing offer from Bouygues, the construction and telecoms conglomerate, which had comprised more upfront cash but offered a lower stake in the overall company – even though the French government had supported the Bouygues offer.

The win gives Altice, which is backed by billionaire Patrick Drahi, the chance to offer Numericable’s cable and broadband services to SFR’s roughly 22m mobile subscribers, but leaves Bouygues in difficulties.

Bouygues, which is the country’s third-largest mobile provider, has been hit hard by the a price war that erupted in France two years ago, when interloper Free came to the market with ultra-low cost offers.

A Bouygues victory would have created France’s largest telecom carrier with an estimated 42 per cent of the market – and possibly spelt the end the pricing battle that has forced operators into making deep cost cuts.

Speculation is now rife that Bouygues, backed by its own billionaire Martin Bouygues, might turn from a buyer to a seller, and begin negotiating a deal with Iliad, the low-cost Free operator controlled by entrepreneur Xavier Niel.

Following the sale of SFR, Arnaud Montebourg, the French industry minister, said the government would remain “extremely vigilant” over Altice’s commitments to employees, and called on the enlarged group to favour French suppliers.

Related Lex note: French telecoms, after the battle

And finally ... the lighter side of the news

Madre Mia! Passions were aroused in the Mediterranean this week when the battle for control of Spanish olive oil maker Deoleo turned political. Italian PM Matteo Renzi accused the Spaniards of having an “ideological aversion” to his country’s bidders, after London buyout group CVC won the bid. Make olive oil, not war!

It’s the north London liberal’s worst nightmare: the doorbell rings, and a charity volunteer rattles the tin for a good cause, but a rummage in the pockets brings forth only coppers. This week, mining giant Rio Tinto showed how to avoid such embarrassment. It donated its C$19m stake in a copper deposit to charitable foundations in Alaska.

As graphene maker Haydale announces plans to list, it seems there is no end to the uses of the miracle material. A team from Manchester University is employing it in a stronger, thinner “more pleasurable” condom. Apparently, it has the added advantage of being a good conductor of heat. Let’s hope they keep up their efforts.

Online readers of The Mirror encountered the future of ecommerce this week, when the newspaper used new technology to turn photos into web adverts. Software from Finnish group Kiosked let fans reading about the Man United-Bayern match click a pic to buy replica kit. Will Wayne Rooney’s hair restorers now seek a tie-up?

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