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COMMΞЯCIΛL ΛWΛЯΞNΞSS | 27.05.24

COMMΞЯCIΛL ΛWΛЯΞNΞSS | 27.05.24

A rundown of things that you should know about from last week 27.05.24

 

  • DONALD TRUMP FOUND GUILTY

In a high-profile trial, a jury has found 77-year-old Donald Trump guilty, just six months before he faces Joe Biden in a bid to return to the White House. Trump has become the first former US president to be criminally convicted.

In a historic decision, a New York jury found Trump guilty of falsifying business records to commit election fraud, convicting him on all 34 counts.

Unanimous agreement was required for any verdict.

The charges stem from Trump falsifying records and concealing payments made by his lawyer to former adult actress Stormy Daniels, who was reportedly paid “hush money” to remain silent about her alleged relations with Trump.

The former president is set to be sentenced on 11th July 2024, just days before the Republican National Convention on July 15, where Trump is expected to be formally nominated for president.

He faces a maximum sentence of four years in prison, though others convicted of similar crimes often receive shorter sentences, fines, or probation.

 

  • UK GOVERNMENT STAKE IN NATWEST FALLS TO 22.5% AFTER BUYBACK

Natwest has bought back another chunk of shares from its largest shareholder, HM Treasury.

 On Friday morning, both the Treasury and the bank announced that the UK government sold GBP 1.24 billion worth of NatWest shares back to the company. The Treasury sold 392.4 million shares, representing a 4.5% stake, at 316.2p per share. This transaction reduces the government’s stake from 25.98% to 22.50%.

Edinburgh-based NatWest was nationalised during the 2008 and 2009 financial crisis, with several multibillion-pound bailouts resulting in an 84% stake for the UK taxpayer in what was then known as the RBS Group. Since then, the government has been gradually decreasing its stake through market sales and buybacks by NatWest.

UK Chancellor Jeremy Hunt recently announced plans to begin selling the government’s remaining stake to retail investors as early as this summer. However, this plan was cast into doubt by the announcement of a general election scheduled for July 4.

 

  • UK RETAIL SALES SURGE IN MAY – CBI

UK retail sales surged in May, as reported by a closely-watched survey on Tuesday, while selling price inflation continued to decline.

According to the latest Distributive Trades Survey from the Confederation of British Industry (CBI), retail sales volumes increased at their fastest rate since December, achieving a weighted balance of 8%. This marks a significant improvement from April’s balance of -44. Sales were considered average for the time of year, with a balance of 2, the strongest outcome in eight months.

The CBI also noted that selling price inflation eased “considerably,” with the balance dropping to 20 from February’s high of 54. This puts selling price inflation at its lowest level since August 2020.

However, retailers anticipate a decline in sales volumes next month, with a balance of -4, although this is still broadly in line with seasonal expectations.

 

  • ROYAL MAIL OWNERS AGREE TO £5BN TAKEOVER OFFER

The board of the company that owns Royal Mail has agreed to a formal takeover offer for the 500-year-old organisation.

Czech billionaire Daniel Kretinsky has firmed up an offer of £5bn, including assumed debts, for the company which employs more than 150,000 people.

The entrepreneur said he had the “utmost respect” for its history and tradition.

The offer includes commitments to retain the name, brand, UK headquarters and UK tax residency, as well as protections for employee benefits and pensions.

 

  • GSK , PFIZER AND OTHERS MUST FACE 75,000 ZANTAC LAWSUITS 

GSK Plc, Pfizer Inc, Sanofi and Boehringer Ingelheim must face trials in state court in Delaware after a judge found the evidence backing up claims the companies’ former Zantac heartburn treatment causes cancer is legitimate and can be heard by juries.

Superior Court Judge Vivian Medinilla concluded late Friday that consumers aren’t relying on flawed science to support allegations Zantac — owned by different companies at different times – caused a variety of cancers. She also found disputes over experts’ analyses of those health risks can be properly debated at trial. About 75,000 consumers have filed suit in Delaware targeting former makers of

In 2019, some manufacturers and pharmacies halted Zantac sales after a chemical called NDMA, which is known to cause cancer, was detected in some pills. Some tests showed that Zantac’s active ingredient, ranitidine, could degrade into NDMA over time or when exposed to heat.

Lawsuits began piling up from people who said they developed cancer after taking Zantac. Plaintiffs said the companies knew, or should have known, that ranitidine posed a cancer risk and that they failed to warn consumers.

The U.S. Food and Drug Administration asked manufacturers to pull the drug off the market in 2020. The drugmakers have maintained that there is no evidence Zantac exposed users to harmful levels of NDMA.

 

  • CMA TO INVESTIGATE £2.9BN TAKEOVER OF VIRGIN MONEY BY NATIONWIDE

The UK competition regulator has launched an inquiry into the £2.9bn takeover of Virgin Money by the rival lender Nationwide Building Society.

The Competition and Markets Authority (CMA) said it had opened the first stage of its merger process to look at whether the deal – one of the largest transactions in the banking sector since the 2008 financial crisis – would lead to substantial lessening of competition.

The CMA is seeking comments on the tie-up before 14 June and has set a deadline of 26 July for its phase 1 decision on whether to move to a more formal investigation.

The deal has already been approved by shareholders at Virgin Money this month. Almost 90% of those who voted backed the deal, including Virgin Money’s largest investor, Sir Richard Branson. He is poised to receive £724m from the deal in return for use of the Virgin brand as well as his 14.5 % stake in the bank he founded in 1995.

The takeover would result in a combined group with 700 branches, second only to Lloyds Banking Group.

The combined assets of the groups would total roughly £366.3bn.

Virgin Money is now the UK’s sixth largest retail bank with around 6.6 million customers, while Nationwide has nearly 18 million customers.

When the deal was struck, Nationwide said it would not make any material changes to Virgin Money’s 7,300 employees “in the near term”.

It said that it would keep using the Virgin Money brand initially but it would be phased out over six years once the proposed takeover is completed.

 

  • MIKE ASHLEY’S FRASERS GROUP LIFTS STAKE IN HUGO BOSS TO £305M

Mike Ashley’s retail conglomerate Frasers Group has raised its stake in Hugo Boss after a sharp drop in the German fashion group’s share price since the start of the year.

Frasers said a recent “strategic investment” has lifted its shareholding to 1.74m shares of common stock, representing 2.47% of Hugo Boss’s total share capital, or 9.80m shares via the sale of derivatives known as put options, representing a 13.92% stake.

“Frasers Group is pleased to announce that it has recently increased its investment in Hugo Boss,” the company said in a statement.

“After taking into account the net premium it will receive, Frasers Group’s maximum aggregate exposure in connection with its net acquired interests in Hugo Boss, with the common stock holding valued at the closing share price on 29 May 2024, is approximately €360m (c. £305m).”

Frasers, which owns Sports Direct, House of Fraser and Flannels, and holds investments in a number of retail names across Europe, has slowly sold stock in Hugo Boss in recent years since taking a 10% stake in 2020.

However, shares in the Frankfurt-listed brand have fallen by 27% since the start of 2024 and now sit at €48 a pop.

 

  • NIKE SCORES PARTIAL VICTORY IN THREE-STRIPE TRADEMARK BATTLE AGAINST ADIDAS

Nike has been permitted to include three stripes on some of its trouser designs in Germany, a court ruled during a second appeal hearing between the retailer and Adidas.

The Duesseldorf regional court had previously banned Nike from using two or three stripes across five of its trouser designs, after its rival filed a trademark violation lawsuit back in 2022.

However, the footwear company has now been given the green light to use the stripes on four of its disputed designs, although a ban for one remaining model remains, partially overturning the previous ruling.

Since 2008, Adidas has filed more than 90 lawsuits and signed more than 200 settlement agreements related to its three-stripe trademark, according to court documents from the sportswear retailer’s battle against designer Thom Browne.

Last year, Adidas withdrew its request to the US authorities to reject a Black Lives Matter application for a trademark featuring three parallel stripes.

The sportswear retailer had argued the political group’s yellow-stripe design would create confusion with its own three-stripe mark.

 

  • WEWORK SET TO EMERGE FROM BANKRUPTCY

WeWork is set to emerge from bankruptcy, aiming for a fresh start with reduced debt and fewer office locations.

Founded in 2010, the company, which rents out shared office spaces and was once touted as the future of the office, incurred significant losses during its rapid global expansion. The demand for office space plummeted due to the pandemic, leading WeWork to file for bankruptcy last year.

Under court protection, WeWork has renegotiated its rental leases and worked with its lenders. The company plans to operate 337 shared office spaces worldwide post-bankruptcy, roughly half the number it had in June 2023. The US and Canada will remain its largest markets, with more than 170 locations.

A New Jersey bankruptcy court approved the plan on Thursday, which includes eliminating $4 billion (£3.1 billion) of the company’s debt and reducing its future rent obligations by $12 billion (£9.4 billion), or more than half. The restructuring introduces a new owner, Yardi Systems, a software provider for office and residential landlords. Yardi Systems will take a majority stake in WeWork, contributing $450 million (£353 million) in financing alongside other investors. Japan’s SoftBank Group also remains a supporter.

Judge John Sherwood, in approving the plan, stated that the restructuring would position WeWork to be “a viable, successful company.” WeWork expects the restructuring to be completed by mid-June.

 

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