Plus, the Barclay family fortune comes under scrutiny and the DoJ’s pivotal case against Google
In today’s newsletter:
- BP’s CEO is out
- The Barclay’s billion-dollar debt
- The DoJ takes on Google
BP’s future-minded chief makes a premature exit
In a shock move on Tuesday, BP boss Bernard Looney resigned from the helm of the UK oil major after failing to disclose the extent of past personal relationships with colleagues.
The FT revealed Looney’s ouster in a shake-up that came as the Irishman was just getting started in his ambitious plan for the 113-year-old company to embrace a lower-carbon future.
BP said its board in May 2022 received and investigated “allegations” relating to Looney’s “conduct in respect of personal relationships with company colleagues”. During that review, the executive disclosed past relationships prior to becoming chief executive and the investigation did not find any breach of conduct.
However, “further allegations of a similar nature were received recently, and the company immediately began investigating with the support of external legal counsel”, it said, adding that the process is “ongoing”.
Looney told BP on Tuesday that “he was not fully transparent in his previous disclosures”, BP said. “He did not provide details of all relationships and accepts he was obliged to make more complete disclosure.”
His sudden departure comes at a critical time for BP. Commitments to cut the company’s emissions to net zero by 2050 have outpaced BP’s rivals under Looney, but the outgoing chief’s lofty goals — increasing investments in low-carbon projects tenfold and building or acquiring 50GW of renewable power by 2030 — are very much in progress.
Less than four years into his tenure, BP’s board has now been left scrambling to find a replacement that can execute Looney’s grand plan to turn the oil major into an integrated company of the future. Murray Auchincloss, BP’s chief financial officer, has stepped in as Looney’s replacement on an interim basis.
After delivering a record $28bn in profits last year, Looney’s pay doubled in 2022 — an increase BP said reflected his success in overhauling its strategy.
But its stock has still underperformed its peers since he took the top job, leaving his successor with the challenge of picking up where he left off, and winning over shareholders in the process.
The Barclays’ billion-dollar bank tab
When Lloyds Banking Group made its government-brokered rescue of HBOS during the 2008 financial crisis, it inherited one of the collapsed mortgage lender’s most problematic clients: the billionaire Barclay family.
Almost 15 years later, the UK bank is finally nearing the resolution of loans made to the Barclay brothers, who used the cash to build a business empire. In an effort to recoup part of its debt, Lloyds has seized control of one of their crown jewels, the Telegraph Media Group, and put it up for sale.
The sudden repossession marks the latest twist in a saga that has dredged up bitter family feuds and placed the reclusive dynasty’s fortunes under a microscope, the FT’s Daniel Thomas, Stephen Morris and Emma Dunkley report in this Big Read.
It also shows how Sir Frederick Barclay and his late brother David, two working-class brothers from west London, forged their empire using “other people’s money”, as one person familiar with their operations put it.
When the Barclay twins bought the group in 2004, the financing provided by HBOS for the deal was described by those familiar with its terms as “a classic Cummings handshake loan”. The term is a reference to the disgraced former HBOS executive Peter Cummings, who had a reputation for lending large sums with few safeguards to high-profile clients.
Cummings’ largesse helped make the Barclay family the largest single-client exposure among the roughly £200bn of problematic HBOS loans inherited by Lloyds in 2008.
But even as Lloyds managed to hack those bad borrowings down to £10bn within three years, the Barclay debt was harder to shake.
Lloyds is hoping its sale of TMG can finally change that. Potential buyers include Daily Mail owner DGMT, hedge fund tycoon Paul Marshall and Czech energy mogul Daniel Křetínský, who owns a slice of France’s Le Monde newspaper and previously looked at the Telegraph in 2020. Rupert Murdoch is also circling, according to people close to the situation.
But while some of the Barclays’ debts could soon be remedied, they’ve also raised fresh questions over the financial state of the family’s current businesses, which are held in a complex web of offshore structures.
Representatives for the family said that discussions with Lloyds remain ongoing and they hope to come to an agreement that will satisfy all parties.
US enforcers face a make-or-break moment in court
A quarter century after US regulators won a seminal antitrust case against Microsoft for abusing its dominant position in the PC market, antitrust enforcers are hoping to redefine the law further as it challenges Google in a similarly epic case.
On Tuesday, the Department of Justice faced off against Google in an attempt to prove that its contracts with companies, such as smartphone makers, that feature itself as the default search engine are illegally shutting out competitors.
The outcome, according to many legal observers, will be an important test of US antitrust officials’ ambitious goal to rein in Big Tech.
It also marks a pivotal moment for the DoJ’s antitrust boss Jonathan Kanter, who has been enlisted by the White House alongside Federal Trade Commission chair Lina Khan to crack down on anti-competitive behaviour.
A series of regulatory setbacks, including a federal judge’s rejection of the FTC’s efforts to block Microsoft’s $75bn acquisition of Activision Blizzard, has made the Google case all the more critical.
The situation draws parallels to the antitrust challenge against Microsoft in the late 1990s, when US lawyers argued that the tech giant thwarted competition via contracts with PC makers to promote its Internet Explorer browser and crush rival Netscape.
The landmark case resulted in a judge ordering a break-up of the company, though the ruling was overturned on appeal. The DoJ has framed the Google case as an attempt to extend rules established in that case to the current tech landscape.
Google has argued that, unlike the contracts Microsoft forced on PC makers, its own agreements were mainly determined by companies such as Apple.
As an election year quickly approaches, the clock is ticking on President Biden’s trustbusters to chalk up wins.
Job moves
- Luigi Pigorini, Citigroup’s head of private banking for Europe, the Middle East and Africa, is leaving early next year after 40 years at the US lender, according to a memo seen by DD.
- Campari chief executive Bob Kunze-Concewitz will retire next year after 16 years at the helm of the drinks and spirits group.
- Credit Suisse’s head of leveraged finance Julia Perroni has joined Houlihan Lokey as a managing director in its capital markets group, based in Paris.
- Infrastructure investor John Laing has named Luke Gorton, previously Credit Suisse’s head of infrastructure for Emea, as head of Europe.
- Richard Haass, the former head of the Council on Foreign Relations who last month resigned from Lazard’s board, has joined Centerview Partners as a senior counsellor in New York.
- Moelis & Company has appointed Citigroup’s Jugjeev Duggal, an M&A adviser focused on clean technology and related sectors, as a managing director in New York.
- Linklaters has named Paris-based energy and infrastructure partner Justin Faye as head of its Africa Group, succeeding Andrew Jones, who will retire after 31 years at the firm.
- Citigroup’s co-head of industrials Niraj Shah is leaving to join PJT Partners, Bloomberg reports.
- Public relations firm ICR has acquired London-based healthcare advisory Consilium Strategic Communications in a deal that will see Consilium founders Mary-Jane Elliott and Amber Fennell lead ICR’s European operations.
Smart reads
‘Dumb money’ Hedge fund billionaire Ken Griffin isn’t happy about how he was depicted in the new GameStop film. Puck digs into his behind-the scenes legal fight with Sony Pictures.
The new lottery tickets The retail investors who once embraced meme-stock mania are moving on to an even riskier financial instrument — options that expire in less than 24 hours, The Wall Street Journal reports.
Silicon Valley schadenfreude FT columnist Jemima Kelly ponders why it’s so tempting to mock the Burning Man attendees trapped in the Nevada desert last week.
News round-up
- Smurfit chief defends switching main listing to New York after WestRock deal (FT)
- Ari Emanuel’s martial arts group TKO eyes $1bn earnings as it lists in New York (FT)
- Ex-Credit Suisse banker’s wealth firm shuts down after bad bets (Bloomberg)
- UBS kick-starts Credit Suisse exit from Canary Wharf (FT)
- Big Law follows private sector into space race (FT)
- Norway’s $1.4tn oil fund becomes top UBS shareholder (FT)
Source: Financial Times
