The Times - UK (2020-11-26)

the times | Thursday November 26 2020 2GM 45

Business

Dividend payments will be resumed

next year, G4S has promised as it tries

to fight off a rival’s hostile £2.9 billion

takeover bid.

The British security group claimed

that it could boost revenue by up to

6 per cent every year as an independent

company, with a profit margin of 7 per

cent in the medium term.

John Connolly, 70, its chairman, told

shareholders that the company had a

“bright future” on its own. “The com-

pany’s resilient performance and posi-

tive outlook enables it to resume the

dividend for 2021 and provides clear

potential for significant further cash

returns to shareholders,” he said.

Gardaworld, of Canada, has until

next Wednesday to increase its bid.

Allied Universal, an American security

merged Random House
with Penguin Group in a
joint venture with
Pearson, which had
owned Penguin Books
since 1970.
Bertelsmann owned 53
per cent of the new
company, Penguin
Random House, and with
it titles such as George
Orwell’s 1984. Pearson

held the rest. Four

years later,

Bertelsmann

increased its stake in

Penguin Random

House to 75 per cent.

This year it took full

control of the

publishing house from

Pearson.

By the end of last

month, Penguin

Random House

accounted for 25 per cent

of print book sales in the

United States. Harper

Collins, the No 2 in the

market, had 11 per cent

and Simon & Schuster,

the No 3, had 9.1 per cent,

according to NPD

Bookscan, a publishing

market research

provider.

Investors get the

message as Slack

talks to Salesforce

James Dean US Business Editor

Slack shares jumped by as much as a

third yesterday after it was reported

that Salesforce had held talks to buy the

company.

A deal, which is not guaranteed,

would be likely to value Slack at more

than $17 billion, according to The Wall

Street Journal.

Slack, founded in 2013, develops

software that has become popular as an

alternative to email, allowing groups of

employees to chat, collaborate and

share documents. The company, based

in San Francisco, was co-founded by

Cal Henderson, from Cambridge, who

serves as its chief technology officer.

Salesforce, valued at nearly $230 bil-

lion, has a popular cloud-based

customer relationship management

platform. It was co-founded by Marc

Benioff, its chairman and chief execu-

tive, in San Francisco in 1999. The com-

pany was recently elevated to the 30-

strong Dow Jones industrial average.

If a deal is agreed, it would be Sales-

force’s largest acquisition. Its record so

far is the $15.3 billion it paid last year for

Tableau Software, a “big data” analytics

company.

Shares in Slack closed up by 37.6 per

cent, or $11.12, at $40.70 in New York last

night. Salesforce shares fell by 5.4 per

cent, or $14.02, to $246.82, suggesting

that investors were not hugely keen on

a deal.

Salesforce’s apparent interest in

acquiring Slack could be as a means to

head off a growing challenge from

Teams, the increasingly popular work-

place collaboration software developed

by Microsoft. The software giant

launched Teams in 2017 and has poured

considerable resources into growing it.

Daniel Ives, an analyst at Wedbush,

said that a deal would be “a major shot

across the bow” of Microsoft. He said

that it also could put pressure on

Google to do a deal so that its cloud

business keeps pace with those of Sales-

force, Microsoft and Amazon.

The pandemic has proved to be a

boon for workplace software develop-

ers, but Slack appears to have missed

out. The company was valued at close

to $17 billion when markets closed on

Tuesday, down from the $23 billion it

was worth at the end of trading on its

stock market debut in June last year.

Mr Henderson, 39, who went to a

state school in Bedfordshire, owns 3 per

cent of Slack, a stake worth $507 million

at Tuesday’s close. Stewart Butterfield,

47, the Canadian chief executive, owns

8 per cent of the company, a holding

worth $1.4 billion on Tuesday.

At the last count, Slack had 12 million

active daily users and 119,000 paying

customers in more than 150 countries.

Salesforce already owns two rela-

tively little-known workplace collabo-

ration tools: Chatter, its in-house social

tool; and Quip, which it bought for

$750 million in 2016. Both can be used

in conjunction with its customer

management software. It also has a

partnership with Slack to integrate the

Slack software into its customer man-

agement system.

Britain becomes jewel in

crown for Netflix filming

Tom Ball

Netflix is to boost its production

spending in the UK by 50 per cent after

the success of British-made shows in-

cluding The Crown and Sex Education.

The streaming video group said

yesterday that it would increase its Brit-

ish annual budget to £750 million this

year, up from £500 million last year.

The increased investment follows

plans announced last month to create a

new London headquarters for the

California-based company. Netflix will

treble its office space in the capital to

100,000 sq ft when it moves into the

Copyright Building in the West End.

Netflix has 269 employees in the UK.

Britain is among the most important

international production hubs for

Netflix, with the budget for the country

second only to that in the United States.

Despite the effect that lockdown

measures have had on slowing down

production schedules, 50 television

shows and films have been

made by the company in the

UK this year. About a third

of all the productions that

Netflix films in Europe are

made in Britain.

Last year, the group

struck a ten-year deal to

take over Shepperton

Studios in Surrey, allowing

it to push through productions without

delay.

“The UK is an incredibly important

market to Netflix and we are proud to

be increasing our investment in the

UK’s creative industries,” a spokesman

told The Guardian. “The Crown, Sex

Education and The Witcher are among

the shows that have been made in the

UK this year and will be watched by the

world. These shows are a testament to

the depth of talent that exists here.

“We will continue to invest in the best

content in every genre and are fully

committed to supporting British pro-

duction and creative talent for many

years to come.”

The company is estimated to be

spending $17 billion on making and li-

censing content in 2020. By compari-

son, the BBC’s total annual content

budget for TV, radio and online was

£2.3 billion in the year to the end of

March. However, Netflix is facing in-

creasing competition from established

media and technology companies, such

as Apple and Disney, the latter of

which recently struck a long-term

deal to take over Pinewood Studios in

Buckinghamshire.

Despite strong growth in the first

half of 2020, largely thanks to

coronavirus lockdowns, de-

mand slowed in the third

quarter, with 2.2 million

paying subscribers sign-

ing up, below the

2.5 million that was

predicted.

G4S steps up takeover defence

with dividend payout promise

Callum Jones group, has until December 9 to formal-

ise its own £3.3 billion bid.

G4S, the world’s largest security

company, has annual revenues of £7 bil-

lion and employs 530,000 people.

Ashley Almanza, 57, its chief executive,

said that the company was “well posi-

tioned to accelerate sustainable profita-

ble growth and we are confident that we

will deliver our financial targets”.

However, Gardaworld said that these

promises amounted to “jam the day

after tomorrow”.

A Garda spokesman said: “G4S has

no future under a senior management

team that routinely misses targets,

paying unsustainable dividends fuelled

by debt and disposals.”

Shares in G4S were little-changed

last night, up 0.1 per cent, or ¼p, at 228p,

valuing the businesses at almost

£3.6 billion.

survival against a 95 per cent drop in
demand, while aviation has received
over £1.8 billion in support through
loans, tax deferrals and financing.
“We would ask this scheme to be
extended to include international rail
services and more generally for the
government to incorporate high-speed
rail in its support for the travel sector.”
Eurostar, once part-owned by the
British taxpayer but now controlled by
SNCF, the French state railway, is due
to be merged next year with Thalys, an
SNCF business that runs high-speed
trains between France and Belgium.
Eurostar is running only one train in
each direction between London and
Paris and between London and Am-
sterdam via Brussels, compared with
more than fifty daily services before the
pandemic struck.
Mick Cash, general secretary of the
RMT union, said: “It is wholly wrong
that Eurostar, an eco-friendly service
that is a beacon for the future of our
railways, is being denied the kind of
financial support being offered to the
airports.”

Filming on the second

season of The Witcher

began this year

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