- Alibaba’s Alipay is the latest tech company potentially facing the Chinese government’s wrath, while Apple also suffers a legal blow in the US
- Audioboom offer goes sour, Smurfit Kappa issues green bonds, and companies line up for marketing deals with Britain’s new tennis star
Chinese intervention ramps up
Investors in China have been increasingly wary of late, as the government seems hell bent on reasserting some control over its private markets, particularly in the technology sector. The latest concerns centre on Alipay, the payments giant owned by Alibaba's (US:BABA) Ant Financial arm, whose planned Hong Kong listing was pulled following pressure from the state last year.
Reports suggest the government is now calling on Ant to hive off the loans business of Alipay, which last year accounted for about a tenth of all consumer loans in the Chinese economy. This follows an earlier regulatory intervention into Ant’s business that prompted it to split off the back-end operations of two other lending businesses, Huabei and Jiebei.
Somewhat predictably, Alibaba shares fell sharply in overnight trading in Asia and were down 4 per cent at the time of writing.
Meanwhile, Chinese regulators are stepping into the property sector to try to prevent a disorderly failure of one of its the most venerable companies, Evergrande (HK:3333). Such is the concern around its ability to support its $300bn (£217m) debt burden that shares in the company have slipped to new lows, while trading was suspended in one of its bonds last week amid heavy selling. The government is believed to be forcing a restructure upon the business in an effort to avoid a collapse that could have systemic ramifications in China and beyond. GD
Apple not a monopolist - for now
On Friday, a judge said more evidence was needed to prove Apple (US:AAPL) is a monopolist. In a California trial, Epic Games, the creator of Fortnite, had been questioning the 30 per cent fee Apple takes from purchases in its App Store, arguing the tech giant's requirement for developers to use this service made it a monopoly.
The ruling by Judge Yvonne Gonzalez-Roger, in the end, was a loss for both companies involved. Epic didn’t get the 30 per cent fee removed, but Gonzalez-Roger also ruled that Apple could no longer stop developers from directing customers to their own sites for in-app purchases. Since Friday, Apple’s share price is down 4 per cent.
Epic Games has already filed an appeal on the ruling, calling on a higher court to re-examine the case. AS
Another tennis star, another marketing opportunity
If she was not such a promising tennis star, Emma Raducanu would probably be heading to university this month, preparing to take on thousands of pounds in debt. Instead, the 18-year-old Brit is today cashing in $2.5m in prize money, after emerging triumphant from the US Open final at the weekend.
Rising from relative obscurity to global fame in a matter of weeks, Raducanu will likely only grow her fortune in the coming months, as companies scramble for a marketing deal with Britain’s newest sports celebrity.
“All the ingredients are there” for the teenager, whose only sponsorship deals at the moment are with Nike (US:NKE) and Wilson, to become the “dominant British sportswoman of her era”, one sports marketing expert told the Financial Times.
But what are the opportunities, and potential pitfalls, for companies staking their brand on young sports people? Megan Boxall considered this question in June, after Raducanu’s fellow Nike ambassador Naomi Osaka dropped out of the French Open. OT
Boom, there goes the offer
Podcasting company Audioboom (BOOM) has seen a takeover offer from All Active Asset Capital disappear even with 51 per cent support from its shareholders, after the prospective buyer said Audioboom had declined to extend the deadline for a formal deal. Audioboom’s shares were down 3 per cent on the news.
In July, AAA had offered a 200p-per-share bid for Audioboom, plus an offer of 12.5 of its own shares for every share in the podcasting business. But the investment company needed to complete another buyout as a condition of this and could not convince Audioboom to grant it an extension, even with the strong support. AAA added it was "surprised and disappointed" with Audioboom's response.
Audioboom also announced strong August trading numbers on Monday, and said its full-year sales would be “significantly in excess of the board’s expectations”. AH
Smurfit Kappa funding is all about the green
Packaging group Smurfit Kappa (SKG) plans to raise €1 billion (£852.9m) as it becomes the latest company to sell green bonds.
The Dublin-based business said it will issue eight and 12-year notes and use the proceeds to finance or refinance green projects that meet either the International Capital Markets Association’s Green Bond Principles or the Loan Market Association’s Green Loan Principles.
Smurfit Kappa, which said it uses 75 per cent recycled fibres in its paper and card production, already replaced a €1.35bn revolving credit facility with a sustainability-linked loan last year. It joins numerous companies across the world looking to capitalise on the responsible investing boom: the amount of green, social and sustainably-linked bonds is forecast to reach $450bn this year, after hitting $227.8bn in the first half, according to the Climate Bonds Initiative. MF