FT Wednesday 16th July 2014

  1. UK aims for top EU economy portfolio

 

Michael Gove, who has been demoted from Education Secretary to Chief Whip.

On Tuesday David Cameron performed his biggest Cabinet reshuffle since taking office in 2010. The most significant moves were: the demotion of the PM’s friend and ally Michael Gove from Education to Chief Whip; the resignation from the foreign office of party giant William Hague and his subsequent announcement that he will not stand in next year’s general election; and the promotion of a number of women to ministerial roles. The reshuffle was dubbed ladies day” by some in the press.

 

On Wednesday, Cameron turns his attention to Europe, having nominated former lobbyists and Tory member of the House of Lords Jonathan Hill as Britain’s next EU commissioner. The PM is hoping that Lord Hill will be given the role of internal market, trade or competition commissioner. Cameron’s failed public campaign against the incoming EU commissioner Jean-Claude Juncker could work against him however, as it is the former Luxembourg PM who will decided how the commissions roles are divided up between member states.  

 

  1. Yahoo agrees to fresh deal on Alibaba

Yahoo has restructured its deal with Chinese e-commerce group Alibaba ahead of its IPO that is expected to break records on the amount of money raised. The amount of Yahoo’s share that will be diluted has now decreased, and it is thought that the relationship between the two companies has improved in recent months. Yahoo’s own core business has struggled to find growth in recent years, meaning the biggest thing that the company has going for it is a 24% stake in Alibaba. Alibaba is valuing itself at £133bn. It is that stake drawing investors to Yahoo, meaning its share price has risen despite continued poor performances. Yahoo has fallen well behind fellow internet giants Google, Facebook, and Amazon, and it is arguable that only the decision of Yahoo co-founder and former CEO Jerry Yang to invest in Alibaba has kept the company operational.

 

  1. Time Warner rejects $80bn bid from Rupert Murdoch’s 21st  Century Fox

Rupert Murdoch’s 21st Century Fox has made a staggering takeover attempt of competitor Time Warner. Murdoch, who controls 39% of the voting rights of 21st Century Fox has long coveted a takeover of his major rival in US television and film. The bid is valued at around $80bn and included a combination of cash and equity. Murdoch, who is now in his 90s will not pay over the odds for Time Warner, yet his initial bid has been rejected. It remains to be seen whether Fox will attempt a hostile takeover. If the deal does go through, the emerging media behemoth would be forced to sell Time Warner’s CNN on competition grounds, as it is an important rival to Murdoch’s Fox News. 


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