The week in investor relations: The end of the pandemic, Vanguard’s new sustainability funds and the big BuzzFeed Spac withdrawal
– America’s biggest bank is predicting an end to the pandemic and a return to global growth in the year ahead, according to CNN. ‘Our view is that 2022 will be the year of a full global recovery, an end of the global pandemic and a return to the normal conditions we had prior to the Covid-19 outbreak,’ Marko Kolanovic, JPMorgan’s chief global markets strategist, reportedly wrote in a note to clients on Wednesday. ‘This is warranted by achieving broad population immunity and with the help of human ingenuity, such as new therapeutics expected to be broadly available in 2022.’
– Vanguard launched a new range of actively managed funds focused on sustainability, reported CityWire. It said the latest launch takes the number of sustainability-focused funds offered by Vanguard to 10. The new funds have four ‘sustainability principles’ in mind, including a commitment to underlying companies having a net-zero carbon footprint by 2050, the exclusion of companies that may harm society and the environment, a commitment to engage with portfolio companies on ESG issues and the requirement that companies follow good governance practices.
– CNBC revealed that digital media firm BuzzFeed expects to raise just $16 mn from its listing through a special purpose acquisition company (Spac), after it emerged that 94 percent of the $287.5 mn raised by the Spac was pulled by investors. The news outlet described BuzzFeed as the first significant modern digital media company to enter the public markets, adding that it will be closely watched not only by investors but also by other industry peers. Vice, Vox, Bustle, Group Nine and others have considered going public via a Spac and are also candidates to combine with BuzzFeed.
– The Financial Times (paywall) reported that the US will put SenseTime, the Chinese artificial intelligence company that specializes in facial recognition software, on an investment blacklist today (Friday), the same day SenseTime prices its Hong Kong IPO. Citing people familiar with the matter, the paper said the action against SenseTime, which Washington says enables human rights abuses against Muslim Uyghurs in Xinjiang, will be part of a package of sanctions against a number of countries to mark Human Rights Day.
– The Guardian reported that Volkswagen is apparently considering a Porsche IPO to help fund its shift toward electric vehicles. Estimates for what Porsche might be worth as a stand-alone company range between €45 bn and €90 bn ($51 bn and $102 bn), said the paper. Speculation about what could be a record-breaking Porsche listing surfaced over the year, it added, citing Reuters sources – but no decision has been made ‘due to a complex stakeholder set-up’, and it is unclear whether a listing would happen.
– In other potential IPO news, Walgreens Boots Alliance, the owner of the UK’s largest high street chemist, is apparently ‘lining up Goldman Sachs to work on a potential disposal’ of Boots. Sky News reported that any deal could see the ‘172-year-old health and beauty retailer’ valued at £5 bn ($6.6 bn). Spinning the chain off into a separately listed company could also be a possibility, it added.
– According to Reuters, hedge fund firm Engine Capital pushed Kohl’s Corp to consider a sale of the company or separate its e-commerce division to improve its stock price. Engine Capital said the department store has underperformed both the S&P 500 and other retailers in recent years, despite its large retail footprint and real estate holdings. The New York-based hedge fund added that Kohl’s should consider a strategic review of the whole company, including a sale. In response, Kohl’s said the company continues to examine all opportunities for maximizing shareholder value.
– Norwegian conglomerate Aker hired Yngve Slyngstad, the former head of Norway’s sovereign wealth fund (SFW), to lead its asset management unit, with a focus on renewable energy projects, reported Reuters. Slyngstad will have a 5 percent stake in Aker Asset Management when he takes up the position on March 1. He leaves the world’s largest SFW, which has assets of around $1.4 tn, after more than 20 years, and was its CEO from 2008 to 2020.
– The UK transport group Go-Ahead postponed its financial results and is preparing to suspend trading in its shares as negotiations continue over a £25 mn ($33 mn) breach of Southeastern’s railway franchise agreement, reported the Guardian. Shares plunged by 25 percent on Thursday after the news. The bus and rail operator was stripped of the contract to operate the commuter network in September after the government uncovered discrepancies running over several years since 2014.
– New York Mayor Bill de Blasio said the city is imposing a vaccine mandate for all private sector employers as a pre-emptive measure to fight a surge of Covid-19 cases this winter, CNBC reported. The mandate covers 184,000 businesses and will go into effect on December 27, de Blasio said. Everyone aged 12 and older, workers and customers, will be required to show proof of two vaccine doses by that date, unless they received Johnson & Johnson’s single-dose vaccine.
‘We’ve got Omicron as a new factor, we’ve got the colder weather, which is really going to create additional challenges with the Delta variant, we’ve got holiday gatherings,’ de Blasio said. He said the purpose of the vaccination requirements is to avoid the shutdowns imposed in March 2020 when Covid-19 devastated New York and its economy.
– According to the Guardian, US activist investor Elliott Management launched an attack on UK company SSE’s energy transition strategy and called for two new independent directors. The company has rejected the idea from the hedge fund firm that it should spin off its renewables arm and on Tuesday issued a further rebuff of Elliott’s demands. In a letter addressed to SSE chair Sir John Manzoni, Elliott said the company’s investment strategy lacked ambition and called on the firm to provide a detailed and credible plan ‘to address investor concerns around SSE’s corporate governance, its ability to fund its growth in the long term and its persistent undervaluation.’
SSE chief executive Alistair Phillips-Davies defended the company’s investment plan and rejected Elliott’s criticism. He said SSE had conducted a ‘rigorous’ review including input from shareholders, and said the plan was ‘the optimal pathway to accelerate clean growth, lead the energy transition and create value for all stakeholders.’