LONDON’S BUSINESS NEWSPAPER
THE WEEKEND STARTS HERE ‘BANK HOLIDAY’ MAY KICKS OFF WITH OUR GOING OUT GUIDE P18 THURSDAY 27 APRIL 2023
ISSUE 3,972
GUNNERS SHOT DOWN CITY PUT ONE HAND ON TITLE P22
CITYAM.COM
FREE BANKING CRISIS
First Republic on the ropes as shares fall CHRIS DORRELL
COMPETITION WATCHDOG BLOCKS MICROSOFT’S MEGA-BUCKS ACQUISITION OF ACTIVISION - WITH BOTH FIRMS READYING FOR BATTLE PLAYER 1: MICROSOFT
PLAYER 2: ACTIVISION
‘THIS DECISION REFLECTS A FLAWED UNDERSTANDING OF HOW THIS MARKET WORKS’
‘GLOBAL INNOVATORS LARGE AND SMALL WILL TAKE NOTE THATDESPITE ALL IT’S RHETORIC THE UK IS CLOSED FOR BUSINESS’
ABBY WALLACE THE UK’s competition regulator yesterday blocked Microsoft’s £50bn-plus bid for the video game publisher Activision Blizzard, citing concerns over competition in the fledgling cloud gaming market. The move by the Competition and Markets Authority (CMA) was criticised by both sides, with Microsoft immediately announcing plans to appeal.
“It’s daring, it’s assertive, and [the CMA] will now have to face review by the Competition Appeal Tribunal. That will be the next interesting step,” said Anne Witt, a law professor and competition expert. Activision said it would “reassess our growth plans for the UK” after the ruling, whilst Microsoft said that the decision “rejects a pragmatic path to address competition concerns and discourages technology innovation and investment in the United Kingdom”.
Activision added that the ruling was a “disservice to UK citizens, who face increasingly dire economic prospects”. The deal is also being probed by other regulators, the European Commission and the US Federal Trade Commission, but moves by the UK regulator and appeals court are now likely to weigh on their decisions, experts said. “If Microsoft succeeds, the game goes on,” added Witt. “It needs to clear the EU and US hurdle.
But if the CAT conforms to the CMA’s decision, then it’s truly game over.” Microsoft had previously pledged a string of proposals, enough to encourage the regulator to set aside its concerns that competition would be stifled in the console market last month. But the regulator still had concerns that it would be “commercially beneficial” to Microsoft to lock the games into its own cloud gaming service should the deal go ahead.
FIRST Republic’s shares fell nearly 40 per cent yesterday before recovering slightly as speculation grows that the ailing lender will have to be rescued. On Tuesday, the San Francisco-based bank’s share price closed over 30 per cent lower after it revealed on Monday evening that it had seen over $100bn (£80bn) in deposit outflows in the first quarter. Over the year to date, its share price is down over 95 per cent. Investors are concerned that the huge amounts of expensive short-term funding the bank took on to secure its survival will weigh significantly on profitability going forward. The bank is attempting to come up with a plan for its survival, including cutting 25 per cent of its staff in the next quarter. Bloomberg reports that First Republic is attempting to sell as much as $100bn in assets to pay off its debts. But the bank faces a race against time and the government may intervene well before any plans can come to fruition. According to reports, regulators and financiers are scrambling for a plan to prop up the teetering bank, while the government is currently unwilling to intervene.
OBITUARY
‘A giant of our industry’: City grandee Sir Win Bischoff passes away aged 81 JACK MENDEL HEARTFELT tributes have been paid to City grandee Sir Win Bischoff who has died at the age of 81 following a short illness. The German-born banking boss who had top roles at Schroders and served as chair of Lloyds Banking
Group and Citigroup, also held a number of rules at JP Morgan. The banking giant’s boss Jamie Dimon said yesterday that Bischoff was a “giant of our industry” and a “pivotal and calming leader through the financial crisis. His wisdom has left an indelible influence.” The current chair of Lloyds
Banking Group, Robin Budenberg, heralded Sir Win Bischoff as “an exemplary figure in financial services, and “pivotal part in the story of Lloyds Banking Group.” He had, said Budenberg, “played a uniquely influential and
thoughtful role in the governance of banking and other business sectors – a guiding hand towards a more resilient, sustainable and inclusive financial sector.” And the Corporation of the City of London’s policy chairman Chris
Hayward said: “Colleagues at the City Corporation are grateful for the opportunity to have known and worked with him over the years and will continue to honour his memory by working towards creating a more sustainable future for all.” Bischoff was knighted in 2000 for services to banking.
INSIDE CRH SNUBS LONDON P4 M&S CHIEF SLATES OXFORD STREET P5 HEATHROW RESULTS P8 LONDONERS’ VERDICT ON KHAN P11 THE SQUARE MILE AND ME P12 OPINION P14