The City is having a busier year than pessimistic observers – including me – might have expected. The biggest deal on the block, the £39 billion bid by Australian giant BHP Billiton for its London-listed South African mining rival Anglo American, has fallen away. But plenty of bankers’ and advisers’ fees have already been clocked up on both sides and BHP may now pursue global domination of the copper market by stalking other London-listed miners such as Antofagasta of Chile.
Meanwhile, the £3.5 billion takeover of International Distribution Services, the parent of Royal Mail, by Czech billionaire Daniel Kretinsky’s private EP Group, is cruising ahead with scant opposition – but with two-thirds of the purchase money coming as debt (rather than equity) provided by banks such as BNP Paribas, Citibank and Société Générale. Again, the City’s in the thick of it, as it also has been in selling blocks of shares for companies and institutions to raise some£9 billion in more than 100 significant transactions this year so far, according to London Stock Exchange (LSE) data.
All to the good, after so much talk of dismal times for new LSE share listings – little more than £100 million raised in the year to date. And if activity stays lively, despite the expected Labour victory, we’ll find out whether Rachel Reeves really meant it when she said she has no intention of bringing back the Brussels-designed cap on bankers’ bonuses that was scrapped by Kwasi Kwarteng. Reeves’s announcement in February provoked left-wing fury, the Momentum group calling it ‘a terrible decision, totally out of touch with Labour’s values’. The richer the City, the sooner we’ll discover the depth of the fissures in Labour’s façade.
Name game
On a similar theme, the most interesting thing about last week’s damp-squib Labour-supporting letter to the Times from 120 ‘business leaders’, almost none of whom turned out to be recognised corporate chiefs, was the prominence the newspaper’s editors were willing to give it as a story while surely realising it had so little substance.
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