Market Loop - British tech firm in £5bn takeover bid

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30th August 2022

Bite-sized business news from the UK and beyond

Good morning Yesterday marked Netflix’s 25th anniversary. The streaming giant started out by shipping DVDs to customers by mail. Now it consumes more than 15% of the world's internet bandwidth and has 222m subscribers in more than 190 countries.

Today's stories

British tech firm in £5bn takeover bid
Why NASA wants to go back to the moon

TECH
British tech firm in £5bn takeover bid

What happened?
Last week Canadian software giant OpenText announced it had offered £5bn to buy UK rival Micro Focus. News of the deal sent the British company’s shares up nearly 100% on the day.

How did we get here?
Micro Focus provides large companies with everything from cybersecurity to IT management software. It’s had a rough few years, a disastrous takeover of a division of Hewlett Packard in 2017 led to declining revenues every year since. Its stock price has also dropped over 40% in 2022 and more than 90% in the past five years.

OpenText creates software for internal company intranets and emails and believes a combination with Micro Focus would create one of the world’s largest cloud computing businesses.

Why it matters: The deal is represents two recent trends in corporate Britain:
1. Foreign takeovers of British firms has been on the rise. US investors have taken over major names like supermarket Morrisons, security company G4S and infrastructure group John Laing. The relative weakness of the pound against the dollar and other currencies since Brexit has made buying British businesses more attractive for overseas buyers.
2. There are very few publicly listed tech firms in the UK. Chip designer Arm, engineering software maker Aveva and cybersecurity firm Darktrace are just some of the UK tech businesses that are either no longer on the London stock market or could soon be removed after takeovers by foreign investors.

Other stories to keep you in the loop

Store closures at lowest level for seven years
Chancellor visits US for cost of living talks
Energy bills forecast to reach £7,700 average from next year in latest expert price cap prediction
Asda eyes up Co-op’s petrol business in £450m bid
New lottery operator says cost-of-living crisis has had ‘limited’ impact
Wave of Goldman Sachs workers quit en masse at ‘toxic’ Wall Street giant
Microsoft co-founder's $1bn art collection set to be most expensive auction in history

SPACE
Why NASA wants to go back to the moon

What happened?
Space: not just for billionaires, anymore. Or at least that’s what NASA hopes to prove with the launch of its most powerful rocket it has ever built. Lift off was planned for yesterday but had to be postponed due to an engine failure.

Why it matters: The mission, dubbed Artemis I, is the first step to returning people to the moon, a goal NASA hopes to achieve by 2025. Humans haven’t stepped foot on the lunar surface since 1972.

The stakes are high: it’s expected to cost almost $100bn in total and crewed missions always come with risk, but success could kick start a new era of space exploration for the agency.

The launch – which could be as soon as this Friday - will send an uncrewed space capsule on a 42-day journey around the moon and back to Earth, a test to make sure everything is working smoothly before putting astronauts on board.

If all goes well, NASA will launch another orbital flight in 2024, this time with four astronauts aboard. That will be followed by a mission in 2025 that will land two astronauts on the moon.

The agency plans to send people to the moon every year thereafter, and eventually build a permanent settlement.

Zoom out: While the venture is costly, NASA hopes that Artemis will have positive spin-off effects that make it worthwhile, like igniting technological innovation needed for longer flights to Mars and jump-starting businesses involved in transporting goods to and from the moon.

Stat of the day

Harvard is the richest university in the world with an endowment of $53bn

Interesting links from around the web

The best (and worst) airlines for delays at UK airports
How to save when you really like to spend
What a normal day is like for Mark Zuckerberg

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Market Loop - British tech firm in £5bn takeover bid

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