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A few things to start: activists at Trian Partners have built a stake in Comcast, the Tiffany/LVMH trial is set for January and the UK’s Rolls-Royce dropped almost 11 per cent on Monday after confirming an FT scoop that it was in talks to raise £2.5bn in fresh equity from investors. 

One event to look out for: we’ll be hosting a virtual session on M&A in the digital healthcare sector on Thursday at 3pm London time. Details here

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Nikola: in need of a recharge

Trevor Milton, founder of the electric truckmaker Nikola, always had a need for speed.

But now he’s out just weeks after accusations from the shortseller Hindenburg Research that his company was “an intricate fraud” and ensuing investigations by the US Department of Justice and Securities and Exchange Commission.

Milton (pictured above) is stepping down to shift focus away from himself and on to Nikola’s “world-changing mission”, he wrote in a letter to investors, adding: “I intend to defend myself against false allegations levelled against me by outside detractors.”

If he were to be ousted from his position involuntarily, a regulatory filing published on Monday afternoon revealed, Nikola would be required to pay Milton $20m over a two-year consultancy period. He relinquished this opportunity by leaving on his own accord, however, along with various performance-based stock options.

The former General Motors vice-chairman Steve Girsky, who helped to orchestrate Nikola’s public debut in June via a merger with the special purpose acquisition company VectoIQ, is in the driver’s seat as executive chairman of the company. 

Last week Girsky defended the company during a DD forum event (you can watch a recording here) where he said the truckmaker was vetted by an “army” conducting due diligence.

Most recently, our FT colleagues Claire Bushey and Peter Campbell revealed that the company relies on Californian manufacturer Romeo Power Technology for batteries for its Nikola Tre electronic truck prototype. 

It was the second instance of the company outsourcing key technology after flaunting its own “game-changing” batteries that it has yet to unveil — Nikola also uses GM’s Ultium battery for its Badger pick-up truck, as part of a $2bn deal with the Detroit carmaker. 

Nikola's bumpy ride since its June listing

As Nikola’s shares dropped almost 20 per cent on Monday, fellow electric automaker Tesla was preparing for what it hopes will be a very different reveal of its own battery technology.

Elon Musk is hoping Tuesday’s “battery day”, where he’s expected to reveal Tesla’s latest lithium battery technology, will be “one of the most exciting days in Tesla’s history”. 

The reveal is crucial to the narrative Musk is selling to investors, who have bid the company’s stock up by 420 per cent since the start of the year, making Tesla the world’s most valuable car company. 

If that wasn’t enough, Tesla isn’t aiming to be just a car company. As FT Alphaville’s Jamie Powell explains in this video, it’s pitching itself to investors as a software company, too.

Go deeper into the company’s evolution with the latest big read

TikTok: dealmaking jet lag

Who will own TikTok? The answer depends on whom you ask, and in which timezone: Eastern Standard Time or China Standard Time.

DD can’t recall too many deal negotiations in which the two parties disagreed so publicly on a company’s shareholder structure. 

Here’s how we arrived at the stand-off. ByteDance, the video-sharing app’s Chinese owner, thought it had won preliminary approval from the Trump administration to carve out an entity called TikTok Global that would be 80 per cent owned by ByteDance and 20 per cent owned by Oracle and Walmart.

But over the weekend Oracle and Walmart put out a joint statement claiming the new entity would be majority owned by US investors. Some people involved in the discussions told reporters ByteDance would distribute shares in TikTok Global to its existing investors, thereby giving US companies a majority interest.

©  FT montage; Getty Images; AP

(It’s unclear whether Sequoia Capital, whose China-based business made the initial investment in ByteDance, is being counted as a US investor in this analysis.)

When the ByteDance leadership woke up in Beijing on Monday, they put out a statement on the company’s Chinese-language news app saying TikTok Global would be a “100 per cent” fully owned subsidiary, with Oracle and Walmart set to purchase a 20 per cent interest before an initial public offering.

In response, Oracle put a name behind its claims, trotting out top Washington executive Ken Glueck to claim ByteDance would have “no ownership” in TikTok Global and would distribute shares in the new entity to investors.

So who’s telling the truth? DD doesn’t pretend to know every line in the term sheet before the Trump administration. If anyone has a copy, you know where to find us.

DD does know there’s been discussions about a share distribution to ByteDance’s investors, but the terms and timing are unclear. Instead, it seems both sides are exploiting the grey area to spin the deal for their respective constituencies.

For more detail on TikTok, DD’s Miles Kruppa and James Fontanella-Khan and the FT’s Demetri Sevastopulo pulled together a weekend Big Read on the long arc of negotiations. 

Barring another unexpected turn, it appears that ByteDance might end up coming out ahead, according to the FT’s Lex column.

Telecoms’ missed connections

With millions of people working from home during the pandemic, it should be a great time to be selling connectivity. Yet shares in European telecoms companies have tanked as investors have turned their noses up at the sector. 

Each company has a different story to tell, or sell, but whether it is Deutsche Telekom finally landing Sprint, Vodafone splitting off its towers business, or Telefónica and Liberty Global tying up in the UK, share prices have remained defiantly weak. 

Chart showing that European telecom valuations fail to live up to 2015 growth hopes

That reflects concerns about debt and about capital expenditure with billions of dollars set to be spent on new 5G and fibre networks with little security about the returns that will arrive down the track. 

The disparity between the perceived value of telecoms assets and the value of the listed companies has become too much for some. Companies such as MasMovil and KCom have been taken private and this month Patrick Drahi, the billionaire, offered to buy out Altice, his listed telecoms acquisition vehicle. 

Chart showing that telecom groups have been left heavily indebted after a flurry of acquisitions

Now Xavier Niel, who had already bought back much of his French telecoms company Iliad to reflect his view that the stock was undervalued, has doubled down with a recommended offer to buy Poland’s Play in a €3.5bn takeover of the listed company. 

Play has been a rare success story in European telecoms since it was launched in 2007 — taking the fight to Orange and Deutsche Telekom and winning — but its sale, after a slump in the share price, adds another gap to the listed telecoms sector. 

Chart showing that mobile data usage has grown in the pandemic but not everywhere

Bankers may start to think that it is all to play for after the Play sale but it remains to be seen if the recent wave of mergers and acquisitions is cherry picking or something more fundamental.

Job moves 

  • Goldman Sachs has named Michael Carr, Dusty Philip and Gilberto Pozzi as co-heads of its global M&A practice, alongside Tim Ingrassia and Gene Sykes. Stephan Feldgoise and Mark Sorrell will become co-heads of global M&A. The appointments illustrate how Goldman’s top ranks are still dominated by men despite a push for diversity.

  • The tobacco company Imperial Brands added Bob Kunze-Concewitz, chief of Italy’s Campari Group, to its board. 

  • Simpson Thacher & Bartlett hired Owen Lysak as a partner in its London practice. He joins from Clifford Chance.

  • The law firm Gibson Dunn added Christopher Belelieu as a partner in New York. He joins from Boies Schiller Flexner.

Smart reads

Security boss with eyes on G4S prize Professional baseball, models, kidnappings, death threats, private equity, expensive wine, the ugly side of the private security business and a takeover battle. We profile the chief executive of Canada’s GardaWorld who has made a £3bn hostile move to buy his UK rival G4S. (FT)

Lift the lid on private inequity The briefest glance at the behaviour of banks before the 2008 financial crisis shows that investors playing with other people’s money are capable of some pretty crass decisions. The level of secrecy in private equity serves no one except those on the inside, writes the FT’s Jonathan Ford. (FT)

Bike schemers The economics of government-supported cycle share schemes seem to work well for everyone except retailers. And who knew that Silver Lake Partners was a co-owner of the programme providers. Insightful read here. (FT)

News round-up

Illumina agrees $8bn deal for cancer screening group Grail (FT)

Microsoft buys gaming company ZeniMax for $7.5bn (FT)

Ex-Campari CEO accused of serving up a Cognac deal tip at dinner (Bloomberg)

Quibi explores strategic options including possible sale (Wall Street Journal)

Unilever wins Dutch backing for London move (FT)

Norway wants oil fund to increase US exposure (FT)

Cadbury maker Mondelez seeks acquisitions of ‘healthy’ brands (FT)

Serco seeks acquisitions as outsourcers come under pressure (FT) 

Buyout groups blasted at SEC meeting for ‘misleading numbers’ (FT) 

Deloitte Global vetoes plan to sell UK restructuring division (FT)

Due Diligence is written by Arash Massoudi, Kaye Wiggins and Robert Smith in London, Javier Espinoza in Brussels, James Fontanella-Khan, Ortenca Aliaj, Sujeet Indap, Eric Platt, Mark Vandevelde and Francesca Friday in New York and Miles Kruppa in San Francisco. Please send feedback to due.diligence@ft.com

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