UK C-suite cyber confidence concerns

BY Richard Summerfield

Despite recent growth in the number of recorded data breaches, senior management at a number of UK companies believe that their cyber security provisions are above average – a sign that some UK firms may be overconfident in their defences, according to the ‘United Kingdom – Views from the C-Suite Survey 2018’ report released by FICO.

Executives at three out of four UK firms believe that their company is better prepared than its competitors. Among UK industries, financial services firms were the most confident of all, with 55 percent of respondents saying their organisation is a top performer, and 41 believe that their defences are above average. Forty-two percent of telecommunications providers believe that their firm is a top performer. The least confident executives were in the retail and e-commerce sectors, with 38 percent of respondents saying that their firm is a top performer, and only 19 percent rating it as above average.

This overconfidence among UK executives is particularly jarring as only 36 percent of organisations are carrying out regular cyber security risk assessments.

“These numbers suggest that many firms just don’t understand how they compare to their competitors, and that could lead to a lack of investment,” said Steve Hadaway, FICO’s general manager for Europe, the Middle East and Africa.

The UK is not alone in its overconfidence, however. Firms from all eight jurisdictions surveyed, including the US, believe they are well placed to resist a cyber attack. Canadians were more likely to rate their firm a top performer for cyber security.

Ovum conducted the survey for FICO through telephone interviews with 500 senior executives, mostly from the IT function, in businesses from the UK, the US, Canada, Brazil, Mexico, Germany, India, Finland, Norway, Sweden and South Africa. Respondents represented firms in the financial services, telecommunications, retail and e-commerce and power and utilities sectors.

“IT leaders have greater funding than ever to protect organisations from the continuously evolving threat landscape and meet complex compliance demands,” said Maxine Holt, research director at Ovum. “These same IT leaders are undoubtedly keen to believe that the money being spent provides their organisation with a better security posture than any other – but the rapid pace of investment, often in point solutions, rarely takes an organisation-wide view of security.”

Report: United Kingdom – Views from the C-Suite Survey 2018

Battle for Sky intensifies

BY Richard Summerfield

The battle for UK pay-TV broadcaster Sky has intensified as both 21st Century Fox and Comcast have increased their offers for the company to £24.5bn and £26bn respectively.

Fox’s sweetened offer, which was submitted on Wednesday, would see it pay £14 per share. Fox’s original bid of £10.75 per share for the 61 percent of Sky it does not own was lodged in December 2016.

Comcast first offered £12.50 per share, valuing the company at £22bn. Comcast's latest offer of £14.75 per share prompted Sky’s independent committee recommending shareholders to reject Fox's. Comcast also announced that its increased offer has been recommended by the Sky Independent Committee of Directors.

“We are pleased to be announcing a recommended increased offer for Sky today,” said Brian Roberts, chief executive of Comcast. “We have long admired Sky, which we believe is an outstanding company and a great fit with Comcast. We will be posting our offer document to Sky shareholders shortly.”

Comcast’s offer represents an “attractive premium to the current alternative offer", said Martin Gilbert, deputy chairman of Sky. “We have long recognised the unique position that Sky occupies, and unanimously recommend this offer by Comcast,” he added.

The UK government had been expected to approve Fox’s latest bid for Sky after the company satisfied ongoing concerns over media plurality. Britain’s former Culture Secretary Matt Hancock, who was replaced this week following a cabinet shakeup, was willing to let the takeover go ahead, provided Fox sold Sky’s 24-hour news channel to Disney.

The battle for Sky is just part of the wider ongoing fight for control in the media and telecoms sector, where consolidation has become a key consideration. Fox itself is subject to an ongoing battle between Disney and Comcast. Fox’s assets, including its existing stake in Sky, as well as its movie studios, cable channels, National Geographic and a 30 percent stake in streaming service Hulu are all subject to ongoing fight for Fox.

Disney has offered $71.3bn in cash and shares for the company, minus Fox News, Fox Sports and Fox Television Stations, which would be spun off into a new company called ‘New Fox’. Sky has 23 million customers in five European countries and also boasts a market-leading platform. The company has a slew of original content and licence agreements, notably with the English Premier League.

The media and telecoms industry is in a state of flux as traditional players attempt to keep pace with streaming giants such as Netflix and Amazon and readjust to the new media landscape.

Sky’s shares were up 3 percent on Thursday in anticipation of additional bidding for the company.

News: Sky shares rally after Comcast and Fox go head-to-head in bid battle

Seadrill emerges from depths of bankruptcy

BY Fraser Tennant

Following a year-long Chapter 11 bankruptcy process, offshore drilling rig contractor Seadrill Limited has completed its reorganisation, restructured its debt, sourced substantial liquidity and emerged from the depths in a strong position to execute its business plan.

Seadrill’s plan of reorganisation has equitised approximately $2.4bn in unsecured bond obligations, more than $1bn in contingent newbuild obligations, substantial unliquidated guaranty obligations, and $250m in unsecured interest rate and currency swap claims.

The company will also have access to over $1bn in fresh capital due to extending near-term debt maturities. In addition, a newly constituted board of directors has been appointed, consisting of John Fredriksen as chairman and Harald Thorstein, Kjell-Erik Østdahl, Scott D. Vogel, Peter J. Sharpe, Eugene I. Davis, and Birgitte Ringstad Vartdal as directors.

Once recognised as the world’s largest offshore driller, the company was forced to seek protection from creditors when it was unable to repay the massive debts it amassed during the boom years of buying new rigs.

“I would like to thank our customers, vendors and financial stakeholders for their continued loyalty and support throughout the restructuring process,” said Anton Dibowitz, chief executive of Seadrill Management. “I would also like to thank all our employees for their continued hard work and dedication during this period and whose efforts were a key part of concluding this restructuring process."

Furthermore, in accordance with its new reporting obligations, Seadrill has stated that it will issue its next earnings report in November 2018, which will include half year and third quarter 2018 results and reflect fresh start reporting.

During the course of the restructuring process, Seadrill was principally advised by Kirkland & Ellis LLP, Slaughter and May, Advokatfirmaet Thommessen AS, Jackson Walker LLP, Houlihan Lokey Capital, Inc, Morgan Stanley and Alvarez & Marsal North America, LLP.

Mr Fredriksen concluded: "We are pleased to be emerging from Chapter 11 and moving forward with a solid financial foundation on which we will continue to grow and strengthen our business." 

News:  Seadrill Reorganises, Emerges From Bankruptcy

SYNNEX and Convergys combine in $2.8bn deal

BY Fraser Tennant

In a deal which combines two industry leaders to create a “premier global customer engagement services company”, SYNNEX Corporation is to acquire Convergys Corporation in a transaction valued at approximately $2.8bn.

Under the terms of the agreement, business process services company SYNNEX will acquire call centre operator Convergys in a cash and stock transaction, including approximately $170m of Convergys outstanding net debt. Convergys shareholders will receive $26.50 per share, which includes $13.25 per share in cash and 0.1193 SYNNEX common shares for each share of Convergys common stock.

Following the close of the transaction, it is expected that Convergys will be combined with SYNNEX’s industry-leading customer relationship management business process outsourcing (CRM BPO) subsidiary, Concentrix – enhancing the capabilities of both organisations and creating a premier global customer engagement services company.

Synnex acquired Concentrix in 2006.

"We continue to be focused on driving superior returns to our shareholders through our investments," stated Dennis Polk, president and chief executive of SYNNEX Corporation. "This transaction is expected to enhance our earning potential while continuing our strategy of investing in high value services. Following this acquisition, we expect to have a solid leadership position in technology solutions and Concentrix businesses, with more balanced adjusted earnings before interest, taxes, depreciation and amortisation (EBITDA) contribution."

The SYNNEX/Convergys transaction has been approved by both companies’ boards of directors and is expected to close by the end of 2018, subject to the approval of shareholders of both companies, the receipt of regulatory approvals and other customary closing conditions.

“We are pleased to have reached this agreement, which provides important benefits for all of our stakeholders, including our shareholders, who will receive an immediate premium in addition to value from their equity participation in the growth and synergies resulting from the combination of Convergys and SYNNEX,” said Andrea Ayers, president and chief executive officer of Convergys. “Our clients will be even better served by the combined organisation’s increased scale, strong talent, best-in-class analytics, technology and digital offerings, and a shared commitment to helping them successfully navigate the increasingly complex CX ecosystem.”

News: Synnex Reaches Deal to Acquire Convergys

EQT gets SUSE

BY Richard Summerfield

Private equity firm EQT Partners is to acquire British software company Micro Focus International’s Linux operating system SUSE enterprise software business for around $2.5bn, subject to shareholder approval and customary closing conditions.

The acquisition will be financed by the EQT VIII fund. Micro Focus will reportedly use some of the proceeds of the sale to reduce debt and may return some money to shareholders.

SUSE has been part of Micro Focus since 2014 when the company acquired The Attachmate Group for $2.35bn. At that time, SUSE represented just over a fifth of The Attachmate Group’s revenue. In the year to end April 2017, SUSE generated revenue of $303m and adjusted operating profit of $98.7m, according to Micro Focus  The EQT fund is paying a multiple of 26.7 times adjusted operating profit of the unit for the 12 months to end October 2017.

“Today is an exciting day in SUSE’s history,” said Nils Brauckmann, chief executive of SUSE. “By partnering with EQT, we will become a fully independent business. The next chapter in SUSE’s development will continue, and even accelerate, the momentum generated over the last years. Together with EQT, we will benefit both from further investment opportunities and having the continuity of a leadership team focused on securing long-term profitable growth combined with a sharp focus on customer and partner success. The current leadership team has managed SUSE through a period of significant growth and now, with continued investment in technology innovation and go to market capability, will further develop SUSE’s momentum going forward.”

“We are excited to partner with SUSE’s management in this attractive growth investment opportunity,” said Johannes Reichel, partner at EQT Partners and investment advisor to EQT VIII. “We were impressed by the business’ strong performance over the last years as well as by its strong culture and heritage as a pioneer in the open source space. These characteristics correspond well to EQT’s DNA of supporting and building strong and resilient companies, and driving growth. We look forward to entering the next period of growth and innovation together with SUSE.”

“It was clear from the outset that the SUSE Business was an outstanding business with great people, great customers and fantastic products in a vibrant and dynamic market,” said Kevin Loosemore, executive chairman of Micro Focus.

SUSE believes that the sale to Swedish-based EQT will help finance the next stage in its expansion, allowing the company to hire additional software engineers.

News: UK's Micro Focus sells SUSE software business to EQT for $2.5 billion