the times | Saturday December 4 2021 2GM 57Business
BuzzFeed is set to raise markedly less
than expected from its stock market
listing after investors withdrew funds
from the shell company with which it is
preparing to merge.
The digital media group said that
$16.2 million was now held in trust with
890 5th Avenue Partners, the blank-
cheque vehicle it is combining with —
down from $288 million when their tie-
up was announced in June.
Such special purpose acquisition
companies — or Spacs — raise cash
from investors via initial public offer-
ings. Then they search for an acquisi-
tion, typically a private company, and
take it public through a merger. If early
investors do not like the deal, however,
they can redeem the shares they
bought before it was struck and with-
draw their money. While 890 5th Ave-
nue Partners shareholders approved its
combination with BuzzFeed this week,
a regulatory filing revealed the sharp$100 billion despite being years away
from volume production and profit-
ability.
Boris Johnson, ministers and officials
are said to have held talks with repre-
sentatives of Rivian offering to help
with the construction of a £1 billion car
plant and possible battery gigafactory
not far from the new nuclear power
station being built at Hinkley Point.
They are offering to build a new
motorway junction to serve the factory
off the nearby M5 and to reopen an
adjacent disused railway line, according
to the Financial Times.
Britain is in competition with lower-
cost European economies. Serbia has
been named as one potential home for
Rivian on the Continent. If Rivian were
to choose Britain, it would be a huge
boost for ministers who have yet to
attract new foreign investors into the
UK automotive market during the
zero-carbon revolution.The European telecoms market is set to
deliver record levels of mergers and
acquisitions next year, according to
analysts at JP Morgan, BT’s joint house
broker.
They said that with valuations at
record lows, “we are seeing a scaling
wave of private equity buyouts and
infrastructure deals”.
Stock market investors struggled
with a “buy case” based on the belief
that fibre capital expenditure would
“roll-off” in the medium term, support-
ing an “explosion in industry cash-
flows”, they said, but private equity
buyers and infrastructure funds “seem
to be closing the duration gap”. They
said that “key plays” included BT, Voda-
fone and Vantage Towers, its infra-
structure company.
However, in another note JP Morgan
doubted “whether the UK government
would be comfortable with a non-Euro-
pean [telecoms company], or private
equity, owning the country’s most
critical digital infrastructure”.
In recent years 14 telecoms compa-
nies have been taken private, including
TalkTalk. Last month KKR, the Amer-
ican buyout group, made a €33 billion
offer for Telecom Italia. This week
Reliance Industries, the Indian con-
glomerate, denied reports that it was
considering a takeover bid for BT.
JP Morgan upgraded the sector at the
start of the year after seven years of
being “under weight” and said this
week that many telecoms companies
were now providing mid-term gui-
dance targets for the first time in a
decade, with most forecasting a return
to revenue growth.
Credit Suisse said that the “greatest
areas for transformation” at BT includ-
ed “scope for Openreach monetisa-
tion”. Private equity firms and invest-
ment funds are said to be running the
rule over Openreach with a valuation
of as much as £40 billion, more than
double the BT group’s value.that gaining political and societal
support for a deal was not insur-
mountable, but that there would have
to be undertakings covering pensions,
employees and investment.
BT, alongside its advisers at Robey
Warshaw, the boutique investment
bank whose partners include George
Osborne, the former chancellor, and
Goldman Sachs, has been preparing its
defences. It has included adding pro-
tection for holders of its $500 millionhybrid bond by including a change-of-
control clause and it brought forward a
£2 billion cost savings target last month
and cut its spending forecast.
Drahi, a Franco-Israeli, disclosed his
12.1 per cent stake in BT in June via
Altice UK, a financial holdings com-
pany incorporated in December 2019 in
Luxembourg.
The Swiss-based businessman was
able to quickly amass the large holding
in BT through derivatives, according toCallum Jones
US Business Correspondentreduction in its cash trust since the
summer. BuzzFeed is expected to land
on the Nasdaq stock exchange on
Monday. Established in 2006 by Jonah
Peretti, a former HuffPost executive, its
website became known for viral con-
tent before finding acclaim for its inves-
tigative reporting. It bought HuffPost
last year. It is also acquiring Complex
Networks, a collection of lifestyle and
culture-focused outlets.
Announcing the Spac deal this year,
Peretti, 47, hailed the “next step in Buzz-
Feed’s evolution, bringing capital and
additional experience to our business”.
The company is also raising $150 mil-
lion by selling a debt security.
Rival digital media platforms, also
considering the stock market as a route
by which they could raise funds, will be
watching its debut closely. BuzzFeed
faced protests on the day investors ap-
proved its planned merger. “BuzzFeed
won’t budge on critical issues like wages
— all while preparing to go public and
make executives even richer,” Buzz-
Feed News Union wrote.Ministers roll out the red
carpet for Rivian factory
Robert Lea Industrial EditorA business park in the heart of the
Somerset Levels is pitching to be the
European home of Rivian, the western
world’s second most valuable electric
carmaker.
The government is said to be offering
a package of incentives to encourage
Rivian to choose the Gravity “smart
campus” under construction on the site
of the long-closed Royal Ordnance
factory near Bridgwater.
Rivian is an American start-up that
has begun assembling all-electric pick-
up trucks for the US market. With an
eye on global expansion, it is also to
begin building electric sports utility
vehicles.
Its recent flotation on Nasdaq, the
technology dominated index in New
York, was followed by a surge of inves-
tor interest and for a short time the
business was valued at more thana City source, who
said that Drahi
could swiftly in-
crease his voting
rights through a
similarly struc-
tured trans-
action.
Expectations
that the businessman
could raise his stake
were heightened afterALAMYDrahi dials up line of attack
‘Get set for
more M&A
in telecoms’
Alex Ralphthird-quarter financial results in the
middle of last month for Altice Inter-
national, the entity covering Drahi’s
telecoms business in Portugal, Israel
and the Dominican Republic, disclosed
that a €250 million loan had been
granted to Altice UK in early October.
After emerging with his stake in June,
Drahi quickly sought to strike a friendly
and “on the face of it” supportive tone.
The tycoon — who has engaged Flint
Global, the advisor consultancy co-
founded by Ed Richards, the former
boss of Ofcom, and Sir Simon Fraser, a
former permanent secretary at the
department for business, — publicly
stated his “full support” for BT’s
strategy and has met Kwarteng. He said
that he understood the expansion of
the broadband network was “one of the
UK government’s most important
policy objectives”.
Adam Crozier, 57, the former chief
executive of Royal Mail and ITV whose
first formal day as BT’s new chairman
coincided with Wednesday’s manifesto
event, listened to the presentations
from BT’s senior executives, including
Clive Selley, chief executive of Open-
reach, but did not attend a drinks and
canapés reception afterwards.
Jansen and BT’s investor relations
team are understood to have presented
their strategy to Drahi and his team in
a meeting at the London office of one of
its advisory banks in the autumn.
Drahi, who has a reputation for
aggressive cost-cutting in acquired
businesses, is thought to believe that
Britain is now one of Europe’s most
pro-investment network environ-
ments, after securing a pivotal agree-
ment in March with Ofcom, and that
BT is undervalued. He is said to view
BT as a long-term investment.
Although BT has bolstered its
defences, it is not said to be in a
heightened state. There is,
according to a source, a
view that having picked
BT up off its knees:
“Why would you give
it away now?”
On the wall of
staircases heading
out of BT’s new office
reads the message: “Good
things are coming.” After dif-
ficult years and with uncer-
tainty still ahead, BT’s man-
agement will be hoping
that at last is the case.as it focuses on broadband and builds its defences against any takeover bid from Patrick Drahi, right6 The revolving door at Daily Mail
and General Trust continued to spin
yesterday as Martin Clarke, one of
the publishing group’s most senior
figures, announced his departure.
Clarke, who built MailOnline into
one of the world’s most-visited
media websites, said that he wanted
to pursue other opportunities and
would be stepping down at the end
of February. Last month Geordie
Greig was replaced as editor of the
Daily Mail and Paul Dacre, his
predecessor, returned to the
company as editor-in-chief.
Lord Rothermere, 54, the DMGT
chairman, is trying to take the
business private in the face of
opposition from some outside
shareholders.
Clarke, 57, said that he would “do
everything I can to assist in finding a
new editor for MailOnline, which
must count as one of the most
exciting and rewarding news jobs in
the business”.BuzzFeed stung by investor withdrawals