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Seven Days: 18 September 2020

A round-up of the biggest business stories of the past week
September 17, 2020 and Lauren Almeida

Nvidia buys Arm 

$40bn deal

Nvidia (US:NVDA) has agreed to buy UK chipmaker Arm Holdings from Japan’s Softbank (TYO:9984) for up to $40bn (£31bn). The American company has promised to keep Arm’s headquarters in Cambridge, as concerns mount that the new ownership could further expose the UK to US-China tensions. Nvidia said that it will issue $1.5bn in equity to Arm employees, and keep Arm’s intellectual property registered in the UK. The purchase does not include Arm’s ‘Internet of Things’ services group. 

 

Vaccine trial resumed

After brief pause

The Oxford University/ AstraZeneca coronavirus vaccine trial has resumed in the UK. AstraZeneca said it would “continue to work with health authorities across the world and be guided as to when other clinical trials can resume to provide the vaccine broadly, equitably and at no profit during this pandemic”. The late-stage study had been halted after a possible severe adverse reaction in a participant. AstraZeneca said the trial had seen a voluntary pause linked to a standard review process. It restarted in the UK following a green light from the Medicines Health Regulatory Authority. 

 

Oracle gets a stake in TikTok

ByteDance retains majority

China’s ByteDance will turn its TikTok global business into a new company based in the US, with Oracle (US:ORCL) investing as a minority shareholder, according to the Financial Times. In the new deal, ByteDance would remain the majority shareholder and Oracle would have a stake in the whole of video platform TikTok rather than just its American operations. President Trump has set a deadline for September 20th for the sale of TikTok’s US business, after he threatened to ban the social media app.

 

 

Testing and TT Electronics

20 seconds

Shares in TT Electronics (TTG) soared on the news that a “ground-breaking” Covid-19 screening device, which TT helped to produce, has launched. TT said it had been working with British start-up iAbra and its partners to develop and test Virolens, and has been named exclusive manufacturing partner for the commercial launch. Virolens is said to use specialist imaging and AI technology to detect the virus from a saliva swab within 20 seconds. But it still needs to go through clinical trials before it can be certified for medical use.

 

Peloton races ahead

At-home fitness

2020 has been a “transformative year” for Peloton (US:PTON). The group, which sells indoor exercise bikes and treadmills with add-on virtual classes ,saw Q4 revenues rise by 172 per cent to $607m - buoyed by an increasing trend towards at-home exercise. Full-year revenues rose by 100 per cent to $1.8bn. The group also made its first quarterly profit - with net income coming in at $89.1m versus a net loss of $47.4m. It boasted 1.1m connected fitness subscriptions at the period-end, and expects this to rise to 2.05-2.1m in FY2021.

 

Risers and fallers (%)

TT Electronics +32.1
G4S +29.8
Superdry +21.7
DWF +19.8
Hiscox +19.1
  
Finablr -93.2
Restaurant Group -20.9
Tullow Oil -19.9
Rank Group -17.8
JD Wetherspoon -14.6

Week to 16 September 2020

 

Huawei-owned operating system

Pre-installed on smartphones

Huawei is planning to pre-install its own operating system on its smartphones from next year, as it vies for a new way into the market. HarmonyOS, which was launched last year, will also be offered to other smartphone makers who use Alphabet’s (US:GOOGL) android ecosystem. The Chinese tech company has scheduled the next generation release of HarmonyOS for smartphones in December this year. The operating system market is particularly tough to crack, as developers need to recode their apps for best performance on a new platform. 

 

New Look wins CVA approval

Requisite majority

British clothes retailer New Look said on Wednesday that it had received approval from creditors for its company voluntary arrangement (CVA) proposal launched in late August. This backing means that a “comprehensive financial recapitalisation transaction” already agreed with creditors could go ahead. The transaction involves a debt-for-equity swap on New Look’s current debt, reducing senior debt from roughly £550m to £100m and “significantly decreasing interest costs”. It also entails an extension of primary working capital facilities, and an injection of £40m of new capital to support the business plan.