Category: 3. Business

I feel my travel-scrunched spine start to straighten as I stretch out on the plump mattress, a quilted blanket wrapped around me and a pillow beneath my head. As bedtime routines go, however, this one involves a novel step – placing my lower legs in a mesh bag and clipping it into seatbelt-style buckles on either side; the bed will be travelling at around 50mph for the next 12 hours and there are safety regulations to consider.

Last month Swiss startup Twiliner launched a fleet of futuristic sleeper buses, and I’ve come to Amsterdam to try them out. Running three times a week between Amsterdam and Zurich (a 12-hour journey via Rotterdam, Brussels, Luxembourg and Basel), with a Zurich to Barcelona service (via Berne and Girona) launching on 4 December, the company’s flat-bed overnight sleeper buses are the first such service in Europe.

“Flying is one of the main drivers of climate change. We wanted to design an alternative that people would actually want to use,” the company’s co-founder and CEO, Luca Bortolani, told me before Twiliner’s launch. Their solution is a seat that turns into a genuinely comfortable bed. Manufactured by Greater Manchester-based Airline Services Interiors, it’s similar to a business class plane seat.

Hoping for more shut-eye than red-eye, I lean into that luxury. While I could shorten my journey by taking a Eurostar from London to Brussels and catching the Twiliner there, I’m going London to Amsterdam, and trialling the full Zurich route. With Eurostar adding a fifth direct weekday service to Amsterdam this month, it’s a good alternative connecting hub for UK travellers venturing further into Europe.

As viewers of Race Across the World will know, flatbed buses are common in Asia and South America, but they have been less successful in Europe. Twiliner hopes to change this by offering a service that’s both comfortable and sustainable. Run mostly on hydrotreated vegetable oil fuel (HVO, also called renewable diesel), the company claims its buses produce less than 10% of the CO₂ emissions of a comparable flight. Even when running on normal diesel, which sometimes the buses have to, a Twiliner bus is as sustainable as a sleeper train per passenger kilometre, it says.

Currently operating three buses – one for each launch route plus a third for private charters – Twiliner hopes to offer 25 routes by 2028, possibly even adding a UK service. Though not exclusively targeting routes without sleeper trains, “our niche will be routes where lots of people travel and you don’t have a night train, or good connections,” said Bortolani.

A generous luggage allowance and the efficiency of being able to travel while asleep are pluses. These benefits (plus the novelty factor) aside, the biggest selling point is likely to be the comfort factor.

The blip on this journey is boarding at Amsterdam’s outdoor bus station in Sloterdijk, a five-minute train ride from Amsterdam Centraal station. Standing in the dark, a chill wind chasing through the open space, I’m not entirely sure I’m in the right place. But then I spot a flash of violet and the bus arrives, navigating its huge bulk like a cruise liner inching into a small fishing harbour. The doors open and the lights on the Twiliner’s steps glow a soft, spaceship purple as I climb aboard.

Downstairs are three seats, a spacious toilet, a changing room and self-service shelves selling eye masks, toothbrushes and snacks; ear plugs, coffee and wifi are free. I’m on the upper deck, in one of 18 seats with lofty views as well as USB ports. As we leave Amsterdam lights flicker in high-rise windows around me like colonies of square glow worms, and I click on the QR code by my seat to find instructions for my bed.

Around me there is much excitement but the chatter soon dies down. A no-children-under-five policy and strict guidelines on food, drink and noise make for calm travelling. By 10pm I’m fast asleep only waking at 5.30am in high heat (a teething issue Twiliner is ironing out) and lie back, dozing like a very overgrown baby being wheeled along in a cushioned pram, until the sun rises and the temperature drops.

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There’s a magic to falling asleep in one country and waking in another. Rolling into Zurich on a frosty weekday morning, the city is streaked with silver and gold as it begins to stir. By the bus’s Nespresso machine I chat to Adrien, a student from St Gallen university. “It’s not quicker. It’s not cheaper. But it’s another option, and it’s a good one,” he says. “I slept. I feel rested.”

Just over 25 hours after leaving my home in Somerset, a good chunk of which I’ve slept through, I arrive at Zurich’s Sihlquai bus station. Soaking up sunshine, I walk the 10 minutes to my hotel via the Christmas market on Europaallee, stopping for a hot, cinnamon-dusted Öpfuchüechli (apple doughnut) at one of its wooden booths.

Along the river, the art-lined Helvetia hotel extols the virtues of its hand-stitched Hästens mattresses, designed to ensure its guests a restful night’s sleep. There’s one thing their beds can’t promise, though: to transport me, magic carpet-style, to a new destination the following morning.

The trip was provided by Twiliner and Eurostar. Twiliner tickets between Amsterdam and Zurich cost from 150 Swiss francs (£141). Eurostar tickets from London to Amsterdam from £229 each way in Premier – which includes fast-track check-in and lounge at St Pancras, with breakfast and wifi – or from £39 in standard class. Hotel Helvetia in Zurich has double rooms from 169 Swiss francs (£160) B&B

Plans to expand contactless payments to 20 stations have been delayed by six months, a train operator has said.

Greater Anglia announced last month it would introduce a tap-in tap-out ticketing system at barriers across several stations in Essex and Hertfordshire, including Stansted Airport.

The system was due to be in place from 14 December, but Greater Anglia said on Wednesday it would now not happen until summer 2026, after issues were found and more work was needed.

Martin Beable, Greater Anglia’s managing director, apologised, but said it was “essential” the service was reliable from day one.

“We understand how frustrating it is when improvements like this are delayed, and I am very sorry for the disappointment this will cause some of our customer,” he said.

“It is essential, however, that contactless ticketing works reliably from day one.

“Our teams are working closely with our partners to complete this work as quickly as possible, and we remain committed to introducing contactless ticketing across these additional stations by summer 2026.”

Greater Anglia said for the system to operate correctly, its fares must be fully integrated into Transport for London’s fare system, and additional work was required to ensure this was seamless.

Stations affected by the delay include Billericay, Bishop’s Stortford, Chelmsford, Rayleigh, Sawbridgeworth.

The expansion of the contactless system is part of an £18.7m investment from the Department for Transport to “make rail fares and tickets more convenient, accessible and flexible”.

Rent rises for tenants in public sector housing will be directly linked to inflation in a bid to make the annual hikes more transparent, the Manx government has said.

The Department of Infrastructure (DoI) said the new method of calculation would see rents for more than 6,200 public sector properties rise in line with the September Consumer Price Index (CPI) figure from April next year.

The change would also see housing authorities given the discretion to add another 1% on top if felt necessary.

It marks a move away from the current system, which saw rent rises decided by the DoI after taking representations from the island’s 15 local authority housing boards.

The DoI said the changes would apply to tenants of its housing agencies and those in local authority homes after the previous rent calculator was deemed “not transparent enough”.

A scenario where all landlords chose to impose the extra 1% rate every year is considered unlikely, a department spokesman said.

The change, which has been mooted since 2022, aims to modernise the rent-setting process by aligning annual increases with the island’s economic conditions while improving financial predictability for landlords and tenants “on minimum or living wages”, he continued.

A new safeguard clause has been added to the calculation, allowing the DoI to set a lower rent rate if inflation spikes and rent increases were deemed “untenable”.

Housing Authorities would be required to notify both the DoI and tenants of their decision to impose any discretionary increases.

Tenants would receive formal notice of their new rent levels ahead of the 2026 financial year, the department spokesman added.

A good 20 months have passed since the shareholders of Thames Water declared they wouldn’t be putting another penny into the “uninvestable” company and would rather take a thumping write-off of their investment.

So surely, you’d think, we must be nearing the endgame in the attempt by the creditors – the people who lent money to Thames – to rescue the company via a debt write-down and a recapitalisation with new equity. After all, the 100-odd class A bondholders have been negotiating with Ofwat, the regulator, since June. Indeed, they started work on their proposal six months before that, in case the original preferred bidder, the US private equity group KKR, took fright at the political heat on Thames, which is what happened.

But no, the water torture goes on. “Discussions are taking longer than expected but this is a complex situation and the current phase of the restructuring plan will likely take a number of months to conclude,” Thames said within its half-year numbers on Wednesday. In theory some version of an outline agreement or update is still possible before Christmas, but don’t hold your breath.

What to read into the delay? One hopes it means Ofwat, even as it awaits execution or reinvention under the government’s “reset” of water regulation, is playing hard and tearing chunks out of the creditors’ proposal.

Three areas are critical. First, the terms of the refinancing. Back in October, the creditors tried to present their updated proposed terms as a model of generosity – the write-down on the class A debt would be £4bn, or 25%, rather than the 20% previously suggested. And there would be an injection of £3.15bn in equity. On both scores, you’ll find unattached financiers who think the would-be rescuers aren’t offering nearly enough to ensure a bulletproof balance sheet to attempt a 10-year turnaround of Thames. The debt write-off may need to be bigger (at least 30%) and the creditors may have to dig deeper on equity.

Second, the creditors need to be clearer about how, precisely, they will “reprioritise” the £20bn of spending allowed over the next five years. A perennial problem with the water industry is that the line is blurry between spending on day-to-day operations and capital spending. It all needs to be spelled out in crystal-clear terms. The poor old customers must not be forced by stealth to finance project improvements they have already paid for.

Third, the performance conditions – the even blurrier element in the package. The creditors argue that Thames needs leniency on fines to avoid a doom loop and requires targets on spillages and leaks that it has a chance of achieving. Maybe, but Ofwat – or its successor body – will still need stiff powers to fine Thames for underperformance: the company cannot be granted a free pass on fines. And it would be an outrage if Thames’s customers could be charged more via “outcome delivery incentives”, in regulatory-speak, if their supplier outperforms lowered standards it should have met years ago.

Ofwat’s negotiating hand is not strong because the government clearly prefers a “market-led” solution. Ministers, or some of them, are terrified of Thames ending up in special administration, AKA temporary nationalisation (even if they shouldn’t be, in this column’s view).

But ministers and regulators alike will know there is a likelihood that US hedge funds, led by Elliott Management, would emerge as the biggest shareholders in Thames if the restructuring goes through. They are the opportunistic crew who bought into the debt at distressed prices. It won’t be cuddly UK pension funds, investing via bond-only funds, who emerge at the top of the pile in the internal shuffle between creditors.

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The terms of any deal blessed by the regulator and government must be seen to be severe. The creditors’ October proposal, like June’s, looked too greedy. If the latest delay means Ofwat is insisting on tougher terms, so it should. Even at this late stage, do not go soft. And remember, you are free to recommend special administration.

One scoop to start: One of the world’s largest sovereign wealth funds is suing a US private equity firm, accusing it of attempting to short-change investors on the sale of a portfolio company to another one of its funds.

And another: Bond investors have told the US Treasury they are concerned about Kevin Hassett’s potential appointment as Federal Reserve chair, worrying he will cut interest rates aggressively to please President Donald Trump.

And another thing: One of the largest middle men in First Brands’ financings has said that “a lot of people made a lot of money” lending to the bankrupt car parts maker, as they chased the high yields that it paid on its debt.

In today’s newsletter:

HSBC board completes chair search but continues soul search

After hearing pitches from high-profile names such as Goldman Sachs executive Kevin Sneader and ex-UK chancellor George Osborne, the HSBC board ended its chaotic search for a new chair right back where it had started.

On Wednesday the board announced it had unanimously decided to hand the job to Brendan Nelson, a former KPMG partner who has been in the role as interim chair since October.

The way the process unfolded is likely to raise questions about the effectiveness of the board at one of London’s largest listed companies.

For those who haven’t been following, HSBC just conducted one of the messiest chair searches in recent memory. In fact, the last time a bank fumbled a succession process this badly may have been HSBC itself 15 years ago.

A confluence of factors made the process particularly difficult for the board.

Former chair Sir Mark Tucker’s surprise announcement earlier this year that he would leave at the end of September — about a year earlier than initially planned — left the board rushing to fill one of the highest-profile and most demanding roles in banking.

Despite wading through about 100 names, HSBC’s leadership was pressed to find executives who had: (1) financial services experience (2) intimate knowledge of China (3) diplomat-like skills to navigate a fraught relationship between the US and China (4) the time and energy to do a job with a gruelling travel schedule that pays far below what most of them are taking in.

In fairness, the board did try to loosen up a bit on the required skills. But then they couldn’t agree on whether a candidate actually had them or not. 

Was living in Hong Kong “Asia experience” as it pertains to HSBC or did living somewhere else in Asia also count? Did living in Asia necessarily mean that the person could wield power in Beijing? 

They got around those questions by landing on Nelson, who has essentially no Asia experience to disagree on.

But we may all be back here very soon. Nelson, who is 76-years-old, is unlikely to see the job through a six or nine year term and this could be a way for the board to conduct another process out of the spotlight.

Blue Owl spends $200mn to boost its stocks

It’s been a wild month for private credit giant Blue Owl.

After floating a merger of two of its funds early in November, it was forced to backtrack after an FT report outlined how the deal could leave some investors with large haircuts. 

Shares in Blue Owl and its public credit funds slumped through much of the month as Wall Street grappled with the aborted deal, amid rising fears of falling yields and rising defaults hitting debt markets.

But Blue Owl has been adamant that the market is overly bearish on the New York-based asset manager, which is one of the largest lenders globally to data centres and software companies. 

It has paraded out executives to financial media to dispute assertions that “cockroaches” lie in private credit portfolios amid an over 30 per cent slide in the alternative asset manager’s share price this year. 

On Tuesday evening, Blue Owl disclosed that it has repurchased $200mn in stock across three of its public companies: its asset manager and its two largest publicly traded credit funds. 

The stock purchases included about $35mn coming from company executives and rank-and-file employees, Blue Owl said, and are being used to close large discounts to their reported valuations, one of the key factors for its heartburn over the past month.

As DD’s Antoine Gara reported, the New York-based asset manager had proposed merging its inaugural private credit fund for retail investors with its far larger public fund, OBDC. 

But the structure would have left investors with a 20 per cent haircut, given the acquiring fund’s trading discount. 

The $200mn in stock purchases have driven a recovery in the trading prices of Blue Owl’s companies. But whether the gains are enduring will be the big test.

The Italian company bringing financial engineering to Europe

One of Europe’s hottest private companies, backed by the investment fund Baillie Gifford and telecoms billionaire Xavier Niel, wants the continent to embrace technological dynamism and create a rival to Silicon Valley.

But the American tradition that Milan-based Bending Spoons appears to be adopting is Wall Street-style financial engineering.

In recent years the company, which reached an $11bn valuation this autumn, has been on a buying spree of digital commerce IPOs and under-appreciated internet companies.

Its latest target is Eventbrite, the online ticketing platform, which Bending Spoons announced this week that it’s buying for $500mn.

Earlier this year it bought Vimeo, the video platform, for $1.4bn. Before that it took the streaming technology company Brightcove private for $233mn.

The portfolio doesn’t exactly scream tech dynamism. (In October the company announced it was buying AOL, the software company famed for the internet dial-up service it retired in September.)

But investors — among them also Fidelity, former Google CEO Eric Schmidt and celebrity Bradley Cooper — may instead be looking to the company’s financial innovations.

Bending Spoons paid a large premium for the companies it took private, albeit based on depressed stock prices.

Eventbrite, Vimeo and Brightcove listed in an era when investors were more tolerant of growth companies with fuzzy business models. In the case of Eventbrite, its shares have fallen almost 90 per cent since its 2018 IPO.

Bending Spoons — named for a mind-control scene in The Matrix — is betting smart management and a roll-up strategy such as those more commonly seen in the US can restore value to the internet zombies.

Even if the valuations never recover, Bending Spoons thinks it can squeeze out profits from the steady cash flows of the subscription-based companies, forever.

That’s where it diverges in a key way from US-based private equity companies: Bending Spoons claims it never plans to sell.

Job moves

• H/Advisors Abernathy’s chief executive Tom Johnson is leaving the communications firm. He’s being replaced on an interim basis by Carina Davidson, who’s worked at the company for almost three decades.

• Jeroen van Kwawegen has left Bernstein, Litowitz, Berger and Grossmann, where he headed the corporate governance litigation practice, to start his own practice, JVK Law. He was a member of the BLBG team that successfully sued Tesla to block the $55bn pay package for Elon Musk.

• Wilson Sonsini managing partner Doug Clark is retiring after leading the firm since 2012. Partners Caz Hashemi and Megan Baier will take over as managing partners in August.

• JPMorgan has announced a leadership shake-up in its equity capital markets business. Ashish Jhajharia will become head of ECM in Europe, the Middle East and Africa. Vittorio Rivaroli will become head of continental Europe ECM. And Paul Mihailovitch and Stefan Weiner have been appointed as vice-chairs of capital markets.

Smart reads

Strategic reset Investors could be forgiven for growing impatient with Strategy, FT Alphaville writes, as bitcoin’s biggest corporate evangelist sells shares to build a dollar reserve.

Market return After getting a well-timed loan from the Trump administration and winning unexpected election victories in October, Argentine President Javier Milei’s government is preparing to issue foreign bonds for the first time in years, Bloomberg writes. It’s a stunning change in sentiment since September.

State capital Another company backed by Donald Trump Jr’s venture capital firm has landed a US government contract, the FT reports.

News round-up

Ovo founder aims to retake control after proposing £200mn investment (FT)

Glencore slashes 1,000 jobs as part of cost-cutting drive (FT)

Trump sons’ bitcoin venture sheds almost 40% of its value in crypto turmoil (FT)

Binance names co-founder Yi He as co-chief executive (FT)

AI era requires ‘totally different’ approach to regulation, says FCA boss (FT)

Meta poaches senior Apple designer Alan Dye to support AI glasses push (FT)

Activist campaigns more likely to target female CEOs (FT)