Governance in Brief – April 08, 2021

Posted on April 8, 2021

April, 08, 2021 | Editor: Martin Wennerström

 

Deliveroo stock plunges in London market debut

The shares of UK-based food delivery firm Deliveroo Holdings Plc dropped around 30% in their trading debut on the London Stock Exchange (“LSE”), on the back of investor concerns over the company’s business model and ownership structure. The fall wiped away more than GBP 2 billion of the company’s GBP 7.6 billion initial valuation. Deliveroo has opted for a dual-class share structure that allows founder and CEO Will Shu to maintain control of the company. Although limited to three years, the current structure bars Deliveroo’s stock from admission to the LSE’s premium segment and the main FTSE indices. Deliveroo’s class B shares, entirely held by Shu, are entitled to 20 votes per share. Class A shares, meanwhile, are entitled to one vote per share and were the only share class offered in the IPO. As such, Shu controls 57.5% of the voting power despite owning only 6.3% of the capital. In addition, several institutional investors have raised concerns over the company’s “unstable” business model, particularly with regard to potential regulatory crackdowns on the self-employed status of Deliveroo drivers, which typically excludes them from standard worker rights such as minimum wage, vacation days, and sick pay.

BBC | LSE | CNN | Reuters (1) | Reuters (2) | CNBC

Tencent Music announces share repurchase program

Tencent Music Entertainment Group, the online music arm of Chinese technology firm Tencent Holdings, has announced plans to repurchase up to USD 1 billion worth of shares. The company, which is listed on the NYSE, made the announcement after its market value decreased by more than a third, as the U.S. SEC adopted measures that could lead to the delisting of foreign companies from the U.S. exchanges if they fail to comply with U.S. auditing standards. Tencent Music started the repurchase of Class A ordinary shares in the form of American Depositary Shares on March 29. The buyback program should be completed within one year.

Reuters | SEC | PR Newswire | CNBC

AMP appoints Alexis George as new CEO

Australian wealth manager AMP Ltd. has announced the appointment of Alexis George as its new CEO effective Q3 2021. George will replace current CEO, Francesco De Ferrari. AMP confirmed the leadership change after previously rejecting media speculation on De Ferrari’s planned resignation, which had led to a share price decline and a temporary trading halt. De Ferrari’s resignation comes on the back of rising concerns about AMP’s negotiations with Ares. Earlier this year, the U.S. investment firm withdrew its AUD 6.36 billion takeover offer for AMP and offered to buy only 60% of AMP’s private markets business. De Ferrari had allegedly opposed the sale of the company, resulting in tensions among top management.

AMP | SMH | Investor Daily

Endeavor files for IPO, nominates Musk as director

U.S.-based entertainment company Endeavor Group Holdings Inc has filed for an IPO, after having abandoned plans to go public in 2019 amid weak investor demand. Tesla CEO, Elon Musk, is expected to join Endeavor’s board of directors. The company plans to list its class A common stock on the NYSE. However, it has not disclosed the expected proceeds of the IPO. In an SEC filing, Endeavor reports that it has signed agreements with several investors for a private placement that could raise up to USD 1.76 billion, with shares being offered at USD 24 each. Endeavor had planned to raise more than USD 600 million in its planned 2019 IPO.

SEC | CNBC | Bloomberg | Business Wire