Revving up for IPO
Aston Martin announced plans to list on the premium segment of the London Stock Exchange, as the luxury car maker – which has been bankrupt seven times – outlined plans to almost double annual production to 14,000 units in the medium term. The offer will be open to qualifying institutional investors following a secondary share sale by existing shareholders, although Germany’s Daimler AG will retain its 4.9 per cent non-voting stake. Management is also aiming to increase the adjusted cash profit margin to upwards of 30 per cent, from the 24 per cent reported for the first half of the year. The offer prospectus is due for publication on 20 September.
Wheels in motion
Self-driving potential
Uber’s plans to roll out a fleet of self-driving cars received a boost after Toyota invested $500m (£388m) into the ride-hailing app. A fatal collision in March halted the fleet’s operation for several months while an investigation into the incident was undertaken. Alongside its investment, the Japanese automotive manufacturer will integrate its technology alongside Uber's into purpose-built Toyota vehicles, which will be deployed on the ride-hailing network from 2021. Toyota has already been working on two types of self-driving systems via its artificial intelligence technology operation, the Toyota Research Institute.
Trade deal sealed
Nafta overhauled
After months of uncertainty over the future of trade relations between the US and Mexico, the two countries agreed a fresh deal during a televised phone call between Donald Trump and outgoing Mexican president Enrique Peña Nieto. The bilateral agreement included stricter rules on Mexican car exports to the US – such as requirements for three-quarters of the content be made in North America – but retained tariff-free trade for agricultural products but with new rules on labelling and health standards. However, Canada – the third partner of the North America Free Trade Agreement – has yet to sign up to a deal.
Musk's about-turn
Privatisation abandoned
As some investors suspected, Tesla (US:TSLA) chief executive Elon Musk dropped plans to take the electric car manufacturer private. The plans were cancelled after a board meeting on 23 August, Mr Musk announced via a blog post the following day. The decision followed feedback from institutional shareholders that had internal compliance issues that limited how much they could invest in private companies, while Mr Musk also admitted that there was “also no proven path for most retail investors to own shares if we were private”. Shares in the group have fallen almost a fifth since the plans were first mooted on 7 August.
Wonga-less
Regulatory squeeze
Given the sky-high interest rates once charged by payday lender Wonga – of more than 4,000 per cent in some instances – it’s unlikely that many will view reports that it is teetering on the brink of administration with much sympathy. Payday lenders would argue they provide a valuable service to those excluded from gaining credit from mainstream lenders, but the Financial Conduct Authority’s 2014 cap on costs and rollover charges put paid to their expansion. In 2016, Wonga reported a £64.9m pre-tax loss, compared with a £39.7m profit in 2013.
US surge
Trade fears calmed
US stock indices climbed to record highs this week, surpassing peaks reached during the ‘dot-com bubble’ of the late 1990s. The Nasdaq Composite and the S&P 500 had hit 8,030 and 2,897 points at the time of writing, up 16 per cent and 8 per cent, respectively, since the start of the year, after Mexico and the US agreed to overhaul Nafta, allaying fears of an all-out trade war. The Dow Jones Industrial Average also closed 1 per cent higher the day the deal was agreed.
DNO back down
Takeover confusion
All of a sudden, DNO wants to raise “concerns and dismay about the wider governance culture and shareholder value strategies” of Faroe Petroleum (FPM), the company it acquired a 28.2 per cent stake in earlier this year. DNO has abandoned a push for an extraordinary general meeting while it considers its options, but has now accused Faroe of a “disdainful attitude”, casting further confusion over the possibility of a takeover, once a no-bid period expires at the start of October. Separately, Faroe has also confirmed that the Agar Plantain well, in which the North Sea independent has a 25 per cent stake, was spud on Friday, and will take up to six weeks to complete.
Chart of the week
UK shop prices rose 0.1 per cent in August on the same time the prior year, ending more than five years of deflation.
Food inflation rose to a seven-month high of 1.9 per cent, according to data from the British Retail Consortium (BRC) and Nielsen, while non-food deflation slowed to 1 per cent.
Neilsen attributed the boost to stronger demand for summer food and drinks earlier in the season, although promotional offers helped “limit the impact of some cost increases coming through the supply chain”.
