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Breakfast Briefing: Tiger’s Bet, UK Privatisation & Dreyfus

Tiger Global Backs Barclays

The $24bn hedge fund has taken a $1bn position in Barclays.

Editor’s Remarks: Although the fund has not yet disclosed the purchase publicly, Tiger Global is now understood to be a top 10 investor in the UK bank. The fund’s stake in Barclays is roughly 2.5%, most of which was bought when the bank’s shares sank to a 52-week low of £1.80 in November. So far the shares are up more than 10% at £2.00. Tiger believes in Barclays CEO Jes Staley’s turnaround strategy, which aims to strip the company down to its core US-focused investment bank and UK retail banking activities. Staley was previously CEO of JPMorgan and managing director of BlueMountain Capital.

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Dreyfus Adopts Blockchain

The foods trader used a blockchain platform to sell US soybeans to a Chinese company.

Editor’s Remarks: Louis Dreyfus, founded by Seinfeld and Veep actor Julia Louis-Dreyfus’ great-great-grandfather 166 years ago, is now the first food trader to execute a deal using blockchain technology. The company revealed that back in December it collaborated with ING, ABN Amro and Societe General to use digitised documents secured on a blockchain ledger for the transaction with China’s Bohi Indsutry. Dreyfus said that the digital process meant that data was electronically checked in real-time, which reduced the total document processing time to just a fifth of the normal period. The total transaction time was also reduced hugely, from two weeks down to just one.

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Sanofi to Buy Biogen Spinoff

Sanofi has agreed to buy Bioverativ, which tackles blood disorders, in an $11.6bn deal.

Editor’s Remarks: Bioverativ’s acquisition price values its shares at a 64% premium over their closing price last Friday, which underlines Sanofi’s confidence in the target’s haemophilia treatments. The move is Sanofi’s biggest acquisition in seven years, particularly after the company’s efforts to purchase Medivation and Actelion fell through in 2016. Sanofi is currently looking to purchase new drugs to compensate the declining popularity of its flagship Lantus insulin, which is under pressure from a host of cheaper competitors. Furthermore, the blood disorders sector is one that has not yet faced intense price pressure in recent years, making it an attractive option for Sanofi.

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Amazon Releases Shortlisted Cities

The e-commerce giant has listed 20 possible cities for its new headquarters.

Editor’s Remarks: Contrary to initial rumours that Jeff Bezos was seeking to snub President Trump by building his second headquarters overseas, all of the shortlisted cities, except Toronto, are based in the US. Overall, 238 cities pitched to Amazon in a bid to secure the 50,000 high-paying jobs that the new headquarters is expected to create over the next 10 to 15 years. Countless city councils, mayors and governors have placed their egos to one side to win over Bezos, including Birmingham, Alabama, which built a giant Amazon shipping box to announce their intention to house the new headquarters. Amazon confirmed it will make a final decision later this year.

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UK Privatisation Debate Heats Up

The UK’s Labour Party is intensifying calls to renationalise key utilities. 

Editor’s Remarks: Under Margaret Thatcher, the UK led the way in selling off publicly-owned assets to boost efficiency and reduce the burden on taxpayers. In 2018, however, the Labour Party is once again calling for the renationalisation of water, rail, postal and energy services. The proposals have gained support following a summer of appalling rail delays, leading to opinion polls showing that 83% and 77% of the public respectively want nationalised water and energy services. This sentiment is largely derived from the feeling that private institutions have essentially purchased monopolies at the public’s expense. So far, the Tories have failed to robustly defend privatisation.

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