Vodafone (VOD), Scottish Mortgage (SMT), Smart Metering Systems (SMS) and Darktrace (DARK)
The Competition and Markets Authority (CMA) has warned of a more expensive North American-style mobile phone sector in its decision to further investigate Vodafone (VOD) and Three UK’s agreed tie-up. “ The CMA is concerned that combining these two businesses will reduce rivalry between mobile operators to win new customers,” the competition regulator said. “Competitive pressure can help to keep prices low, as well as provide an important incentive for network operators to improve their services, including by investing in network quality.”
Vodafone and Three can now respond to the CMA, but if no “meaningful solutions” are offered, the regulator will start a phase 2 investigation after Easter.
Sector experts point to a trade-off in Europe compared with the US and Canada, where prices are higher but the infrastructure is better. The CMA acknowledged this in its statement but said both Vodafone and Three had invested significantly in 5G infrastructure in recent years. Vodafone’s share price was flat on the news. AH
Read more: Understanding Vodafone’s tricky investment case
Activist investor builds Scottish Mortgage stake
Elliott Investment Management, a US activist known for a bruising tussle with Alliance Trust (ATST) a decade ago, has taken a 5 per cent stake in Scottish Mortgage (SMT).
Elliott, whose stake in SMT crossed the 5 per cent threshold on 19 March, is known in the UK investment trust space for a fierce activist campaign that ultimately saw Alliance Trust oust its chief executive and adopt a new investment strategy.
Analysts have speculated that Elliott may agitate for change at SMT, with Stifel's Iain Scouller saying the firm "may come up with a list of suggestions as to how the board can improve shareholder value in due course". DB
Read more: Scottish Mortgage's Tom Slater on performance woes, AI and China
Darktrace down after KKR fund exit
KKR was also busy elsewhere in the London market on Thursday. A technology growth fund it advises, Next Generation Technology I, sold its 2.4 per cent stake in Darktrace (DARK) after market close. The stake sold for £82mn, or 425p a share, a 37p-a-share discount on Darktrace’s closing price on Thursday. The cybersecurity company was down 9 per cent as a result on Friday.
KKR’s second Next Generation Technology fund still owns 7 per cent of Darktrace, and this is subject to a 60-day lockup period. AH
