Pearson, the FTSE 100 media group, is planning to explore a sale of the financial daily newspaper within months, Bloomberg reported, so that the company can focus on its fast-growing education division. Dame Majorie Scardino, the chief executive of Pearson, once said famously that the FT would be sold “over my dead body”. But sources said the company had decided to start the sale process before she steps down at the end of the year. Investment bankers and analysts have been predicting the FT’s sale since Dame Marjorie announced her retirement. Her successor, John Fallon, has refused to rule out a sale, The Telegraph says.
The Bank of England should hold fire on injecting more money into the economy until the impact of the Funding for Lending scheme is clear, The Times’ Shadow Monetary Policy Committee believes. Rupert Pennant-Rea, chairman of Henderson Group and a former Bank Deputy Governor, voted against increasing quantitative easing, arguing that the lending scheme introduced by the Bank in August should increase the flow of credit into the economy. He was joined by Andrew Sentance, a senior economic adviser to PwC, who said that the MPC would need to plan an exit from QE if growth continued to pick up into next year.
Hedge funds are betting there will be blood on the high-street this Christmas as Britain’s retail stocks dominate a list of big short positions that has been published for the first time. The secretive financiers have bet millions of pounds that companies including WH Smith, Home Retail Group, Ocado, Sainsbury, Tesco and Dixons will fall in value, according to a list published under new rules by the Financial Services Authority (FSA). Lansdowne Partners, one of London’s best known hedge funds, has short sold 0.63% of the value of Tesco – a £163m bet that the supermarket’s shares will fall. The Mayfair-based group has a 2.51% short position in WM Morrisons, worth £159.8m. GMT Capital, an American group, has built up a 3.56% short position in Carpetright – which is worth just £16.3m but is the third biggest position of the list relative to the size of the company. Barrington Wilshire, another US fund, has a bet against Mothercare worth £8.24m or 3.18% of the company’s market value. Two hedge funds have revealed big short positions in Marks & Spencer, whose shares rose 1.18% yesterday despite revealing a 10% slide in profits, The Telegraph reports.
Britain will walk away from talks with French giant EDF Energy over its planned UK nuclear plant if the burden for the consumer is too high, says John Hayes, the energy minister. Britain is prepared to walk away from talks with French giant EDF Energy over its planned UK nuclear plant if the burden for the consumer is too high, said John Hayes, the energy minister. EDF, majority-owned by the French state, is negotiating with the UK Government over a guaranteed price for electricity from the plant at Hinkley Point in Somerset, which would leave consumers liable for “top up” subsidies. Mr Hayes on Tuesday told a select committee hearing that the Government has a bottom line it will not abandon, after MPs asked if the Coalition is prepared to say “that’s too much for the consumer”. “Absolutely,” he said. “There’s absolutely no doubt – and as I looked into the eyes of [EDF Energy chief executive] Vincent de Rivaz yesterday, I told him that the Government will always put the national interest first.
According to those in the know, representatives of a major Canadian life insurance group are in town shopping for a UK fund manager. But yesterday it was rumours of a £14bn or 250p a share cash offer from US insurance giant MetLife which got Legal & General excited. Its shares raced away on well-above average turnover of 22m to close 3.9p up at a 52-week high of 144.2p. MetLife operates in Latin America, Europe, Asia’s Pacific region and the Middle East. It is one of the largest global providers of insurance, annuities and employee benefit programmes, with 90m customers in more than 60 countries. It has assets of $730.9bn and apparently has a big war chest for acquisitions and wants bigger exposure to the UK market. Legal & General is no stranger to takeover speculation and is forever mentioned as possible fodder for Allianz or Australia’s AMP. Resolution, up 15.4p to 236.6p on a Bank of America/Merrill Lynch recommendation, has often been mentioned in the same breath, according to The Daily Mail.
BHP Billiton has quietly started looking for a successor to Marius Kloppers, chief executive, in what could herald a further shake-up in the leadership of the global mining industry following a five-year period of stability. The process, led by Chairman Jac Nasser, is at a very preliminary stage and a succession at the top of the world’s biggest mining company by market capitalisation could take another 12 to 24 months, according to people familiar with the talks. BHP’s move could mark a period of significant change in miners’ executive suites, after several years in which chief executives of the largest global mining houses have clung on to their jobs despite the industry turbulence in the wake of the 2008-09 global financial crisis.
Investors will be forced to buy billions of dollars of Brent oil futures and sell US crude after S&P GSCI, the most widely tracked commodity index, said it would increase the weighting of the North Sea benchmark at the expense of West Texas Intermediate. The change, effective in January, is likely to affect the price difference between Brent and WTI, one of the favourite spreads traded by specialist hedge funds and commodities trading houses. The expected increase in Brent buying was likely to force the spread between the two global benchmarks to widen further, analysts and traders said. Brent has for years traded at a $1 to $2 a barrel discount to WTI. But since mid-2010, Brent has traded consistently at a premium to WTI due to a logistical bottleneck around Cushing, the Oklahoma town that serves as the delivery point for the WTI contract. JBC Energy, an oil consultancy, said the repercussions of the reweighting on the WTI-Brent spread would be “a hotly discussed issue over the coming months”. Investors including pension funds gain commodities exposure by tracking the S&P GSCI, writes The Financial Times.