Middle Eastern wealth funds including Qatar Holdings and Abu Dhabi’s Mubadala fund have held talks with Lloyds bank bidder, NBNK, to bolster its £2bn approach for the 632 branches Lloyds is struggling to sell. The backing of either or both funds – which have major investments in household business names such as Harrods and EMI respectively – would be a major boost to NBNK’s attempt to win approval from Lloyds’ board. Although it is too early for investment mandates to have been signed, it is known that senior NBNK directors have discussed their plans for Verde with the funds in the aim of bringing them on board as cornerstone investors as part of an eventual offer, The Telegraph reports.
Britain’s official return to recession has raised the risk of a sharp fall in house prices, economists have warned. Fears for a slide in property values emerged after new figures revealed last week that the UK has “double-dipped” into a fresh downturn. The figures are expected to deal a blow to already weak consumer confidence, underscoring the likelihood of a market slump. “It is not good news for the housing market, given it’s already struggling,” said Howard Archer, chief UK economist at IHS Global insight. The potential drop in prices is expected to be more significant than that seen recently. While prices have been falling in “real” terms – when the impact of inflation is stripped out – headline values have remained steady in past months, The Telegraph writes.
Bernie Ecclestone is finalising preparations for a $10bn (£6.1bn) flotation of Formula One and is expected to lodge a prospectus for the business showing that it has $7.1bn of guaranteed revenue. Mr Ecclestone’s plans stepped up a gear last week when a presentation about the financial performance and prospects for the business was given to a packed room of analysts at The Savoy hotel in London. The prospectus will lead to a listing on the Singapore stock exchange. Goldman Sachs, Morgan Stanley and UBS are the lead book-runners for the IPO. The IPO will value the F1 Group at around $10bn and up to 30% of it will be listed, with CVC remaining the majority owner, according to The Telegraph.
When David Cameron suggested he would shun anyone involved in ‘aggressive tax avoidance’, he probably didn’t realise how many people he might have to strike off his Christmas card list. Financial Mail can reveal that more than a quarter of the Prime Minister’s Business Advisory Group have some link with tax avoidance. Of the 23 top executives that give high-level advice to the Prime Minister, three run businesses that moved offshore to limit their tax bills, while a further three have invested in film partnership tax schemes, which are being closely scrutinised by Revenue & Customs, The Financial Mail on Sunday says.
Morrisons will this week reveal the worst sales growth for almost a decade after many of its customers defected to discount rivals. The supermarket giant is set to announce on Thursday that like-for-like sales, a key indicator of a retailer’s performance, have dropped for the first time since its disastrous acquisition of Safeway in 2004. It means Morrisons becomes the second big supermarket after Tesco to face an underlying sales decline. Meanwhile, Home Retail, owner of Argos and Homebase, will this week reveal a 60 per cent drop in profits to about £100m. Analysts have pushed for a restructuring but shareholders, including fund manager Schroders which owns a fifth of the shares, are broadly supportive of chief executive Terry Duddy’s strategy. Clive Black at stockbroker Shore Capital told Financial Mail he was concerned about Morrisons’ drop in market share. ‘Some people will question whether the pace of change is fast enough,’ he added, The Financial Mail on Sunday reports.
Hard-pressed taxpayers will be forced to foot a £5tn bill for pension promises made by the Government, official figures revealed yesterday. It is the first time the total amount owed in state pensions and gold-plated payouts to public sector workers has been laid bare. The enormous liability will heap untold strain on future generations, with every household in Britain picking up a tab for £180,000. It dwarfs the official £1tn national debt and comes just days after the UK slipped back into recession. Dr Ros Altmann, director-general of Saga and a former pensions adviser to Number 10, said: ‘In the past, the Government has hidden these pension obligations – at least we now have some kind of estimate. ‘This is a real liability and the money will have to be found somewhere,’ The Financial Mail on Sunday reports.
City expects part-taxpayer owned banks to shrug off bad debts in Ireland and claims for PPI mis-selling. Royal Bank of Scotland and Lloyds Banking Group are set to return to profit this week despite being dogged by bad debts in Ireland and a spike in claims for mis-selling of personal protection insurance. The City expects RBS to unveil first-quarter operating profits of about £800m, and Lloyds to be modestly back in the black at both operating and pre-tax level. The bounce back comes after RBS struck a loss of £766m in 2011, impacted by a £950m provision for mis-selling payment protection insurance (PPI). Lloyds sank £3.5bn into the red last year as it took a £3.2bn hit from the PPI scandal, according to Scotland on Sunday.
It may have taken more than a decade, but one of Britain’s more obscure telecoms companies has finally started to deliver on its promises, reporting its best quarterly performance since the tech boom. Colt Group increased its revenue in the first quarter by more than 5% to €397m (£324m). Operating profit also rose by 5% to €81m. Most surprising was that this was driven by growth in voice revenue, which has been in steady decline for years. Colt has introduced a new platform for voice calls that means it can turn a small profit on business that other companies have started to abandon because of its low-margin status. Colt will hold its first investor day in nine years next week and analysts hope that the company’s new growth profile will result in a more exciting day out than previous attempts to reach out to shareholders, The Sunday Times says.