Good morning, and welcome to our rolling coverage of the world economy, the financial markets, the eurozone and business.
Vectura, one of Britain’s biggest biotech firms, has been taken over by the American private equity group The Carlyle Group in a £958m deal. Wiltshire-based Vectura specialises in inhaled treatments and is working with Inspira Pharmaceuticals on developing an inhaled version of Inspira’s experimental lead drug for the treatment of Covid-19 – a plant-based drug.
The deal comes as it emerged that 123 UK companies worth £36bn have been sold off to private equity since the pandemic started, with 19 more deals worth £16.6bn in the pipeline, the Daily Mail reported, citing data from Dealogic. It is the highest number of firms swallowed up by private equity since the financial crisis. They include household names from Asda to the AA.
Private equity firms have in the past been accused of buying up struggling firms on the cheap and “asset stripping” them before selling them on. The Mail quoted Baroness Altmann, a Tory peer and former pensions minister, as saying:
It’s really important that government and businesses are on the lookout for pandemic plunderers.
In other corporate news, Marks & Spencer has fallen deep into the red over the past year as clothes sales collapsed during the pandemic. It recorded a pre-tax loss of £201m in the year to 27 March against a £67m profit the previous year. Store sales fell 56% due to closures during Covid lockdowns, while food like-for-like sales were up 1.3%. Chief executive Steve Rowe insisted that that company had “moved beyond fixing the basics to forge a reshaped M&S”.
With the right team in place to accelerate change in the trading businesses and build a trajectory for future growth, we now have a clear line of sight on the path to make M&S special again. The transformation has moved to the next phase.
On the markets, gold has risen above the $1,900 per ounce level, helped by a weaker dollar and growing inflation concerns after Federal Reserve officials stuck to a dovish stance on interest rates.
Spot gold is trading up 0.2% at $1,903 an ounce after hitting $1,905 earlier, its highest level since early January.
Richard Clarida, the Fed’s vice chair, said on Tuesday that the Fed could tame inflation if necessary without throwing the economic recovery off track by engineering a “soft landing”.
Asian markets rose, and European and US stock futures are pointing to a higher open. In Asia, Japan’s Nikkei gained 0.45%, Hong Hong’s Hang Seng climbed 0.7% while the Australian stock market dipped slightly.
- 7.45am BST: France business and consumer confidence for May
- 12pm BST: US MBA Mortgage applications for week of 21 May
- 2.30pm BST: UK Treasury Committee hearing on future of financial services