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A transformative energy sector deal will shake-up the UK market and propel Ovo Energy into the power supply big leagues.

Founded by former City trader Stephen Fitzpatrick, Ovo agreed to buy the UK household business of its bigger rival SSE for £500m deal, including £400m in cash, in a move that will transform the decade-old start-up into the country’s second biggest supplier of electricity and gas behind British Gas.

As part of the agreement, Ovo will issue a loan note to SSE upon completion of the deal that will be due for repayment in 2029 and will carry an annual interest rate of 13.29 per cent, giving an overall enterprise value of £500m. Completion is expected later this year or early next, subject to regulatory approvals.

The deal comes as a relief for SSE, which wants to concentrate on power generation and regulated energy networks. It tried and failed last year to spin off and combine its retail business with German-owned Npower’s equivalent unit.

For Bristol-based Ovo, the deal will be transformative, and comes just months after it sold a 20 per cent stake to Mitsubishi Corporation of Japan in a deal that valued the company at about £1bn. Now, Ovo’s market share will leap from 5 per cent to 18 per cent, a testament to the challenger brand’s success in attracting customers with the promise of cheap deals and good service.

The UK’s biggest energy suppliers have suffered a torrid few years watching as their market share has been eroded by a phalanx of smaller start-ups. But Ovo certainly has something to feel electric about.

Briefly

JD Wetherspoons profits are down more than 4 per cent owing to higher higher costs — but the pub chain’s founder and Brexit backer Tim Martin has another culprit in mind: “elite Remainers”. Wetherspoons said like-for-like sales increased almost 7 per cent, with revenues rising 7.4 per cent to £1.8bn in the year to July 28, although pre-tax profits fell to £102.5m. The group is also facing a higher wage bill and has increased expenditures on opening and refurbishing pubs during the year. Mr Martin may be reconsidering that 20p he slashed last week from the price of a pint.

Cargill is bidding farewell to the fund management business, selling its CarVal Investors unit three years after spinning off its hedge fund group. CarVal was always something of an anomaly for the world’s largest agricultural commodities group, which has been sharpening its attention on markets it can dominate. The company will sell the unit with $10bn in assets under management, including loan portfolios, aircraft and solar power agreements, to a partnership comprised of 17 senior managers at the firm.

Topshop, once considered the jewel in the crown of Philip Green’s Arcadia group, is looking more at home on the discount rack. Losses at the clothing retailer widened to £498m for the year to September 2018 from £15.6m the previous year, while revenues fell 9 per cent to £847m. Topshop accounts for about half of Arcadia’s overall sales, and along with six other entities has used a complex restructuring deal to secure lower rents at its UK stores.

British Airways, grounded: the UK’s flagship carrier confirmed it will cancel the vast majority of flights on September 27 because of a planned strike by pilots, after failing to restart negotiations with the pilots’ union. Plan your travel accordingly.

And the HKEX isn’t giving up: Hong Kong’s bourse is prepared to sweeten its audacious £32bn bid for the London Stock Exchange Group with a cash boost after meeting a cool reception from LSE shareholders. Read more about Charles Li, an ex-oil rigger and journalist who has brought an outward-looking perspective to his leadership of the HKEX.

Job moves

Goldman Sachs has hiredMarco Argenti, former vice-president of technology at Amazon Web Services, as co-chief information officer, replacing Elisha Wiesel in a move that could signal an acceleration of the bank’s move to cloud services. The appointment comes as chief executive David Solomon has been putting his own stamp on senior management and easing out some long-standing partners to free up bigger jobs and rewards for the next generation.

We're looking to feature more job moves. If you're in senior management and moving jobs or you know someone who is, let us know about it at quote@ft.com

Markets speed-read

Asia-Pacific stocks edged slightly up on Friday, with Japan’s Topix up 0.8 per cent and Hong Kong’s Hang Seng rising 0.4 per cent at the lunch break amid renewed optimism over US-China trade negotiations and the European Central Bank’s rate cuts and stimulus pledges. The euro was little changed in Asian trading hours. S&P 500 futures pointed to gains of 0.2 per cent on Wall Street on Friday. 

Markets in China, South Korea and Taiwan were closed for the Mid-Autumn Festival holiday.

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Beyond the Square Mile

WeWork executives, investors and advisers are considering curbing the voting power of co-founder Adam Neumann, and removing his wife Rebekah from a role in succession, in an attempt to save the company’s IPO plans.

Cloudflare priced shares in its initial public offering at $15 apiece on Thursday, higher than its already boosted target range, to raise $525m. Trading in the lossmaking cyber security group opens on the NYSE on Friday.

Deutsche Bank, one of 16 financial institutions sued for breaking antitrust laws by rigging the US mortgage bond market, has become the first to settle civil allegations. Deutsche’s bill: $15m.

Former HSBC chief currency dealer Mark Johnson lost his appeal against a US conviction for wire fraud over a foreign-exchange deal involving Scotland’s Cairn energy. Mr Johnson was fined $300,000 and sentenced to two years in prison.

Closing quote — essential comment before you go

City insider Ana Botín: Instagram influencer. The Santander boss, inspired by her niece, has joined the photo-sharing app in an effort to #engage with younger people. Perhaps they’ll ask her about PPI reimbursements.

Lombard John Lewis’s Brexit warning will resonate more strongly in middle England’s marginal constituencies than the government’s own “Operation Yellowhammer”.

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