The assertion by former CBI president Sir Mike Rake that Brexit ‘killed’ Worldpay’s hopes of being a global leader in financial technology would be risible if it were not so serious.
Not only is Rake ready to sell Worldpay on the cheap to American rival Vantiv and load the combined enterprise up with debt, he is also betraying the UK’s post-Brexit future.
In dollars terms Worldpay is cheaper to buy now than before the fall in the pound which followed the referendum.
Not only is Sir Mike Rake ready to sell Worldpay on the cheap to American rival Vantiv and load the combined enterprise up with debt, he is also betraying the UK’s post-Brexit future
Rake failed to mention that for American and other overseas users of Worldpay’s systems and software, its services have become that much more price competitive.
Moreover, if Rake and the board of Worldpay had any real vision, they would have been the acquirers, not the acquired.
The truth is that at the first whiff of cordite, Worldpay chief executive Philip Jansen and the board have decided to take the money and run.
We know from the history of American takeovers of British tech firms that promises to keep both the executive team and their headquarters in the UK are no more than Brit-wash designed to keep the politicians and other stakeholders quiet.
Jansen and company have done a great job in taking an under-invested Royal Bank of Scotland asset, improving it and turning it into a global payments champion.
It may be underweight in the US, but the best way of dealing with that was to take advantage of the pound’s depreciation to increase market share. It is not in the national interest to hand the whole caboodle to a competitor and undermine fintech in the UK.
Financial processing is one of Britain’s leading edge industries. Mobile payments pioneer Bango has just revealed a 50 per cent rise in growth from app stores and new clients such as Google Pay and Amazon Japan.
The Bank of England has been working with Ripple to see how its Real Time Gross Settlement System, which connects it to other central banks, could benefit from distributed ledger technology.
If we had a government worth its salt, it would intervene to scrutinise the proposed Worldpay deal which threatens all that the Bank and others are doing to ensure Britain is a world leader in fintech.
Back at BT, where Rake is lingering on as chairman, the going is far from smooth after the Italian debacle.
Trust in BT/EE and the other mobile elephant Vodafone is at a low ebb as a result of poor customer service, rotten billing standards and intermittent signals.
So it is just as well that the telecoms regulator Ofcom is seeking to curb their dominance when 5G, the next big thing in mobile telephony, comes along.
Clearly, existing EE and Vodafone customers would not want a cliff-edge where they fall behind because the regulator has imposed draconian restrictions on their participation in the 5G auctions.
But rivals such as Hutchison-owned Three don’t think Ofcom has gone far enough saying the auction is a ‘kick in the teeth’.
It thinks the 37 per cent cap the regulator is imposing on BT/EE is too generous and does not give the smaller players in the market a chance to breathe.
It makes a good point. BT, as the dominant landline and broadband supplier to UK businesses and consumers, should not have been allowed to take control of EE in the first place.
What is undoubtedly the case is that Britain, as a pioneer in mobile, needs to maintain its technological edge by bringing 5G to users as soon as practicable.
If we are going to compete in the ‘internet of things’, such as autonomous vehicles, we will need extra spectrum.
Ofcom must make sure that if the dominant players abuse their position, the challengers Three, O2 and the like are given a larger share of the action.
Pearson’s disposal of fine British media and creative brands continues.
Latest to be jettisoned is a 22 per cent stake in Penguin Random House, which means that one of the proudest and innovative brands in British publishing has fallen under the control of Germany’s Bertelsmann.
The FT is now run by Japan’s Nikkei and the Economist dominated by the Italian Agnelli car dynasty.
In spite of a Pearson promise of £300million to keep investors cheery, the shares fell 5 per cent. Selling the family silver is always bad form.