Weekend City Press Review Issue #943 (6 March - 7 March 2010)

WCPR Viewpoint

Mad Martin?

 

 

Sir Martin Sorrell has enjoyed a well-earned reputation over the past two decades as the guru of choice for the media and markets when looking for signs of recovery post downturn and recession. He has not usually disappointed, with his famous metaphor of a 'bath-shaped' recession and recovery in the early years of the last decade. This time round his quotable quotes have focused on a 'LUV' recovery - L-shaped (i.e. flat) in the UK and Western Europe, a 'U' in the US and a sharp 'V' in Asia.

 


Sorrell should know what he is talking about as CEO of one the world's biggest advertising agency groups, having long ago eclipsed his former mentors at Saatchi & Saatchi. With his granite looks and chiselled chin, he offers the quintessential image of the popular 'Mad Men' television show about Madison Avenue in the 1960s.
So it was rather worrying that when Sorrell unveiled WPP Group's full-year figures on Friday he was rather less upbeat than usual, echoing the latest caution from others in adland. Although Sorrell does not see a double-dip recession ahead, he remains uncertain as to whether last year's 'green shoots' have really taken hold.
But of even greater concern to him (and us) is his analysis that governments facing huge public deficits have already worked out that the alternative to spending cuts and higher taxes is to inflate their way out of debt, forgoing the need for tough decisions on where to wield the axe.
The problem is that many of the present day market pundits and policymakers are too young to really remember the impact of the high inflation of the 1970s and 1980s, when the illusion of growth was created by rising prices at the same time as real values were being eroded.

 


But Sorrell, who quietly turned 65 on Valentine's Day last month, can recall those days only too well. Which is why he was perhaps less chirpy than usual. -David Churchill

Saturday

Financial Times

Footsie jumps to 18-month high

The FTSE 100 index closed Friday 1.3% ahead at an 18-month peak of 5,599.76, with investors apparently deciding the international operations of the UK's major companies would insulate them from fiscal and political uncertainty at home. The market was also buoyed by better than expected US jobs data, along with the continued weakness of sterling making London stocks comparatively cheap as well as boosting the value of companies' overseas earnings.

[ p.1 ]

Lombard

...Andrew Hill thinks that the departure of Mitchells & Butlers FD Jeremy Townsend does not necessarily mean the start of a Joe Lewis-inspired clear-out at the pubs group, as Townsend is off to join the larger Rentokil Initial in the same role.

...The planned London listing for African Barrick Gold looks attractive even if the 550p-650p price range seems a 'little daring'.

...Smiths Group is to replace Cadbury in the venerable FTSE 30 share index - celebrating its 75th anniversary this year - and is another example of how adaptability rather than nationality is the key to UK companies' survival.

[ p.17 ]

Lex

...It is unnerving when WPP Group and other advertising agencies are still downbeat about the recovery months after the first signs of 'green shoots' started appearing, especially since adland is usually so chirpy.

...Xstrata has plenty of options following Glencore's decision to buy back Prodeco for US$2.5bn, including serious funding of investment projects in copper, coal and nickel over the next three years.

...Democrats are keen to do whatever it takes to get the stubborn US unemployment figures lower ahead of the mid-term elections.

...Ferrari's move to go green with a hybrid version of the Ferrari 599 is all very well, but how many of its attention-seeking fans will see the point of a sports car run on silent battery-powered car engines.

[ p.26 ]

The Long View

...John Authers thinks that while asset allocation is very important for fund managers, the anomalies that are created by excessive focus may need to be corrected by more attention in future on better stockpicking.

[ p.26 ]

Briefs

National News: WPP Group has joined Rio Tinto, Hammerson, Admiral and Schroders in accelerating payment of full-year dividends ahead of the increase to a 50% tax rate for high earners next month. ● Transport for London, which regulates London's black cabs, is considering introducing mandatory classes on customer service for drivers learning the 'Knowledge'. ● The Halifax, part of Lloyds Banking Group, reported the first fall in house prices in February since last summer, echoing results from the Nationwide. ● World News: German Chancellor Angela Merkel stopped short of making a firm commitment to support Greece in its economic crisis after a meeting with Greek PM George Papandreou. ● German industrial orders surged 4.3% in January, the largest monthly increase since June 2007. ● UK Company News: BP CEO Tony Hayward saw his remuneration surge 41% last year. ● Prudential CEO Tidjane Thiam will seek to reassure top investors on Monday over the US$35.5bn bid for American International Group's Asian arm. ● Metro Bank has secured a banking licence from the Financial Services Authority ahead of its planned launch within the next few months. ● Royal Bank of Scotland has given bonuses of £10m in deferred shares to nine of its senior executives. ● Michael Page reports it is being asked to fill twice the number of banking jobs than a year ago. ● HSBC faces a continued conflict with some of its major investors over whether CEO Michael Geoghegan deserves a substantial pay rise. ● WPP Group CEO Sir Martin Sorrell says he has been surprised by the speed of stability returning to the economy. ● Diageo is confident Beijing will not block its attempt to take control of Chinese drinks brand Shui Jing Fang. ● Marshals reported sales down 17.6% last year for its pavement and patio stones. ● Forth Ports confirmed it had rejected two offers from a consortium which already controls 27.4% of the company. ● Arriva's talks about a merger with SNCF's Keolis division have ended without agreement. ● Biffa is seeking a buyer at £350m for its business which generates electricity from landfill gas. ● UK Mail CEO Guy Buswell believes a strong Royal Mail is vital for private postal operators which rely on it to deliver the 'last mile'. ● International Company News: French cosmetics group L'Occitane is poised for an IPO in Hong Kong next month to raise up to US$700m for expansion. ● American International Group is set to sell its Alico life assurance business to MetLife for about US$15bn. ● Apple is to start selling its new iPad from 3 April in the US. ● EADS warned of a loss in the past financial year because of troubles with its A400M military transport project. ● BAE Systems has sold half its 20.5% stake in Saab's defence business to Sweden's Wallenberg family. ● Market News: BHP Billiton added 3.8% to £22.07 helped by an investor roadshow and news that Japanese steelmaker JFE Holdings had agreed to pay US$200 a tonne for coking coal in the quarter to end-June. ● Kenmare Resources fell 26.5% to 15p following news of plans for a heavily-discounted £180m cash call to fund expansion of its Mozambique titanium mine.

[ pp.1, 4, 6, 14, 15, 16, 17, 18, 19, 24 ]

The Times

Li Ka-shing poised to bid for slice of EDF

Hong Kong tycoon Sir Li Ka-shing is planning a Eu4bn bid for the UK electricity distribution arm of EDF Energy, part of France's state-owned EDF group. The approach will be made jointly via Cheung Kong Infrastructure and Hong Kong Electric, a 40% affiliate controlled by Ka-Shing. EDF announced plans to sell the UK distribution business last October in a move to cut its Eu42.5bn of debt.

[ p.59 ]

Comment

...Patrick Hosking is concerned at Standard Chartered's explanation for fudging what appears to be a dividend cut dressed up as a 7% hike, especially as dividends are 'too precious and too rare' to be messed about with in this way.

...Let us hope that Sir Martin Sorrell's fear that Western governments will seek to inflate their way out of the financial crisis is wrong, although the temptation is clearly there.

[ p.55 ]

Briefs

Stock markets on both sides of the Atlantic surged on signs the US economic recovery was gaining pace. ● John Hourican, head of investment banking at Royal Bank of Scotland, received a £5.9m bonus for last year, representing the lion's share of the £10m bonus pool for nine of the bank's senior executives. ● Punch Taverns is offering an innovative new tenancy agreement for graduates and other new entrants to the industry. ● Hedge funds have built a stake of about 10% in VT Group in the belief that the bid approach by Babcock International will succeed. ● Mitchells & Butlers FD Jeremy Townsend has resigned in order to join Rentokil Initial. ● The jury has retired to consider its verdict in the insider trading trial involving former Cazenove partner Malcolm Calvert. ● Factory gate prices rose at their fastest rate for 14 months in February. ● About 100 potential bidders for the UK version of Reader's Digest have expressed an interest for the magazine currently in administration. ● WPP Group plans to focus investment in the developing world and digital markets this year. ● The tenth anniversary of the dotcom boom and bust will be reached on 10 March, the date of the Nasdaq's highest point. ● IG Index has a spread of 501.7p to 505.3p for Heritage Oil, 501.5p. ● Allied Irish Banks may soon ease its troubled financial position by selling off assets likely to include its English branch network. ● Market News: Close Brothers put on 14p to 713.5p after abandoning plans to set up a bank in Gibraltar with Marrache & Co after two of the law firm's senior partners were arrested last month for suspected involvement in a Eu1.8m fraud.

[ pp.54, 55, 57, 59, 60, 61, 63 ]

The Daily Telegraph

Comment

...Alistair Osborne thinks the putative bidders for Manchester United FC - the so-called Red Knights - remain long-shot winners, although football remains 'a funny old game'.

...The consortium bid for Forth Ports seriously undervalues its potential and is likely to fail unless it can come up with substantially more money.

[ p.37 ]

Briefs

A £13.40 a share approach for Forth Ports by a consortium of Peel Ports, Arcus European Infrastructure Fund and the Deutsche Bank infrastructure fund has been rejected by the company. ● The Norwegian Government Pension Fund has pledged to buy UK gilts this year. ● Commercial boat traffic on the Thames fell to its lowest level last year since 1992. ● The US Congressional Budget Office believes that the Obama administration's proposed US$90bn levy on the banks will be paid for by customers and investor rather than the banks themselves. ● Colorado-based Sungate Securities, which has US$2m invested with Terra Firma Capital Partners, is suing Citigroup for alleged conflict of interest during the £4bn deal by Terra to acquire EMI in 2007. ● African Barrick Gold has priced its IPO at between 550p and 650p a share in London. ● The Prudential may decide to sell off some of the American International Group's Asian businesses it hopes to acquire in order to help fund the US$35.5bn deal. ● Market News: Rio Tinto gained 96.5p to £37.01 following news that its largest investor, Chinalco, was reportedly seeking boardroom representation.

[ pp.35, 36, 37, 34 ]

The Independent

Outlook

...James Moore says the stock market recovery has not helped pension funds as much as expected, especially given the impact of new inflationary fears and increased life expectancy.

...Powerful figures within the horseracing industry are already warming to the idea of a licence fee paid by the bookmakers rather than the current levy on profits, especially as it would give them a stronger negotiating position with the bookies who currently enjoy a veto over the levy.

[ p.55 ]

Briefs

Icelandic voters are expected to reject proposals to repay the UK and Dutch governments for the Icesave investor bailout in the referendum being held over the weekend. ● Alexon is seeking to raise £20m through a placing and open offer. ● Glencore formally exercised its right to buy back Prodeco from Xstrata for US$2.5bn. ● Toyota chairman Akio Toyoda has apologised to the car company's workers for the recent recall scandals. ● Biofuel group Vireol is to build a plant in Grimsby to produce fuel from wheat. ● Market News: Enterprise Inns put on 3.5p to 110p as Execution Noble moved from hold to buy in the wake of receding concerns over a possible new Competition Commission inquiry.

[ pp.53, 54, 56 ]

The Guardian

Unite ready to agree pay freeze and 'new fleet' to avert BA strike

A Tuesday deadline for reaching a deal in the dispute between British Airways and its cabin crew has been set, with the Unite trade union believed to be prepared to agree a two-year pay freeze as well as a deal to allow a 'new fleet' of aircraft to be staffed by lower-paid newcomers. If the talks under the auspices of the TUC fail to achieve a breakthrough by Tuesday evening, then Unite is expected to announce cabin crew strikes later this month.

[ p.34 ]

Briefs

United Business Media has ended a 10-year tax dispute with HM Revenue & Customs by agreeing to pay £45.6m relating to the £360m sale of its regional newspapers in 1998. ● Expatriate Greeks abroad are being asked to donate to a special fund set up by the Central Bank of Greece to help the country resolve its debt crisis. ● Polls suggest that Icelanders will vote 75% in favour of rejecting plans to repay loans to the UK and Netherlands in the weekend's referendum. ● Market News: Lonmin gained 41p to £19.63, helped by speculation that Xstrata, which already holds a 25% stake, could mount a full bid with the help of the Prodeco sale proceeds.

[ pp.34, 35, 37, 36 ]

The Daily Mail

Comment

...Sam Fleming reports on concern among business leaders that Conservative plans to cut corporation tax if elected will lead to reductions in tax relief on investment.

...Kraft continues to show Cadbury little respect, given the haste with which it plans to shut down the final salary pension scheme.

...The Chinese government needs to cool down its economy which is in serious danger of over-heating.

[ p.103 ]

Briefs

Unite, the union representing British Airways cabin crew, is believed to have offered a 3.5% pay cut followed by a two-year pay freeze as part of a package to resolve the dispute over staffing levels and avoid a damaging strike. ● Kraft is expected to close the existing Cadbury pension scheme to new and existing members after a review. ● The Treasury could get a £2.5bn windfall from the tax on bank bonuses, estimates suggest. ● Ineos needs the agreement of two-thirds of its banks, which include Royal Bank of Scotland and Lloyds Banking Group, if it wants to relocate to Switzerland to reduce its tax bill. ● Market News: Arriva fell 10.5p to 559.5p following the breakdown of merger talks with SNCF.

[ pp.1, 101, 103, 104 ]

Daily Express

Comment

...Andrew Johnson welcomes the planned competition from the new Metro Bank which, if it delivers on its customer service promises, should shake up the established order.

...BP CEO Tony Hayward deserves his pay rise as he has restored order to the oil giant even though its profits were hit by the drop in the oil price.

[ p.82 ]

Briefs

The World Cup in South Africa can help kick-start the advertising industry's revival, claims WPP Group CEO Sir Martin Sorrell. ● Glencore maybe consider a float following the US$2.5bn deal to buy back Prodeco from Xstrata. ● Week of Dealing: Director buying was seen at Robert Walters, with selling at Paddy Power. ● Market News: GlaxoSmithKline fell 6.5p to £12.38 as UBS estimated it could face a liability of up to US$6bn from litigation involving its diabetes drug Avandia.

[ pp.82, 83 ]

Sunday

The Sunday Times

Darling: no new cuts in spending

Alistair Darling is thought unlikely to announce further spending cuts in his Budget due later this month, a move which could add to the jitters in the currency markets. A date of 17 or 24 March has been pencilled in for the Budget, although this depends on the timing of the election. Meanwhile, the latest British Chambers of Commerce economic review claims the medium-term Treasury forecasts for UK growth are too optimistic.

...David Smith says public opposition in Greece to spending cuts remains strong, although they have been welcomed so far by international markets and bankers.

[ pp.3.1, 3.8 ]

Matalan founder takes home £250m pay cheque

Matalan founder John Hargreaves is expected to take a £250m dividend as part of a £525m refinancing which will also see £260m of debt paid off. The move follows unsuccessful efforts by Hargreaves to sell the discount chain to private equity firms for his £1.5bn asking price.

[ p.3.1 ]

Glazers could triple money

A sale of Manchester United FC by the Glazer family to the Red Knights consortium of City financiers would effectively triple the US family's return on their investment after just five years. It is understood the Red Knights value the club at £1.25bn, including £500m of debt. Meanwhile, Glasgow Rangers FC is set to receive a takeover offer within days from property developer Andrew Ellis.

...Business Focus: Ben Marlow and Matthew Goodman suggest that if the consortium deal being put together by Goldman Sachs chief economist Jim O'Neill succeeds, it could revolutionise the ownership of top British clubs which have effectively become the 'playthings of rich tycoons'.

[ pp.3.1, 3.5 ]

Pru boss promises 'explosive' growth for investors

Prudential CEO Tidjane Thiam is to tell his institutional investors this week that the US$35.5bn takeover of AIA offers 'explosive growth' for the long-term.

...Ian Dey charts the negotiations that enabled Thiam to put together what could be the 'deal of the decade', although some investors remain to be convinced.

[ pp.3.3, 3.7 ]

Agenda

...Dominic O'Connell says the City should back Prudential CEO Tidjane Thiam's 'opportunity of a lifetime', supporting his vision for Asian growth.

...Rolls-Royce is believed to be seeking Whitehall approval to choose a foreign national as its next CEO if it wants to, suggesting that current CEO Sir John Rose might be thinking about making a move.

...The Red Knights consortium bid for Manchester United FC could run into trouble from finding enough wealthy investors willing to make the transition from fan to owner.

[ p.3.4 ]

Economic Outlook

...David Smith thinks that until Gordon Brown can convince everybody he genuinely believes in cutting the deficit, the markets will continue to harbour extreme doubts and believe a Labour election victory would be bad for Britain.

[ p.3.4 ]

American Account

...Irwin Stelzer believes it clear that President Obama is spending his way to recovery in the expectation that the bills will not come in until after his re-election in 2012.

[ p.3.4 ]

Briefs

Designer Cath Kidston is negotiating to sell her retail business to US private equity firm TA Associates which will value the company, in which she has a third stake, at about £100m. ● IBM is developing innovative technology to improve monitoring of energy efficiency in the home. ● The Coventry Building Society is in talks to acquire the struggling Stroud & Swindon Building Society. ● Lloyds Banking Group may sell HBOS Integrated Finance, the investment portfolio it inherited with the HBOS takeover, this week for about £500m, with Coller Capital frontrunner to acquire it. ● New Qinetiq CEO Leo Quinn is planning a cull of senior management. ● Sporting Index chairman Richard Glynn is favourite to become the new Ladbrokes CEO. ● Phoenix Equity Partners is in exclusive negotiations to acquire Yorkshire car parts distributor Andrew Page for about £100m. ● E.ON and Scottish Power are to be given government funds to finish the designs for their innovative carbon capture equipment for coal-fired power stations. ● Freddie Johnston is poised to leave the board of Johnston Press after 51 years. ● Sir Tom Hunter is believed to have received a number of unsolicited approaches for his Office shoe chain. ● North Sea oil explorer EnQuest is seeking a US$400m credit line from its banks for acquisitions. ● Primary Capital is backing a £35m buyout of Amtech from HSBC Private Equity. ● Severstal is set to make a £250m bid this week for London-based miner Crew Gold, although a deal could be blocked by other shareholders. ● Baker Steel Resources Trust, a mining investment trust backed by Lord Rothschild, is set to raise £66m from a London IPO. ● The sale of 320 Royal Bank of Scotland branches has hit problems because of the need to refinance £3bn of public loans made to RBS. ● The sale of Independent Newspapers to Alexander Lebedev has been held up while he seeks to get a better deal on office costs. ● N Brown is launching a new brand called Williams & Brown for larger-size male customers. ● The John Lewis Partnership has given its 70,000 staff a bonus pot of £140m. ● Apple is holding talks with mobile operators this week over launching its new iPad in the UK.

[ pp.3.1, 3.2, 3.3 ]

The Observer

Fergie 'backing bid to buy United', say City financiers

Manchester United FC manager Sir Alex Ferguson is said to support the Red Knights consortium bid interest in the club, according to unnamed City financiers said to be involved in the consortium. But Ferguson has denied the claims.

...Richard Wachman says the Red Knights have a number of heavyweight supporters on their side, including Goldman Sachs chief economist Jim O'Neil and Seymour Pierce chairman Keith Harris who has already been involved in some of the Premier League's biggest takeovers.

[ pp.1, 5, 50-51 ]

Comment

...Ruth Sunderland believes it is now clear that the razing of manufacturing industry during the Thatcher era was 'all pain with no gain', although the tragedy is that Labour did not do enough to repair the damage.

...While the Prudential's Asian aspirations are welcome, it is a shame to see the long-established business model for UK insurance savings come adrift so quickly.

[ p.52 ]

In My View

...William Keegan thinks it is irresponsible of Shadow Chancellor George Osborne to talk up the putative fiscal crisis, especially his apparent suggestion that the fiscal crisis we have already experienced was bigger or more important than the banking crisis itself.

[ p.52 ]

Media

...Peter Preston thinks that Rupert Murdoch, who turns 79 on Thursday, deserves credit for supporting print journalism over the decades, including bankrolling the Times and Sunday Times for so long in the face of difficult conditions.

[ p.53 ]

Briefs

The Liberal Democrats are expected to put pressure on Lloyds Banking Group this week to reveal how far the bank has fallen short of government lending targets. ● Analysts believe the latest housing market figures appear to show the recovery has run out of momentum. ● The Prudential may this week announce a dual listing of its shares in London and Hong Kong, fuelling speculation it could relocate either its HQ or the CEO's office to Asia.

[ p.49 ]

The Sunday Telegraph

Pru braced for short-selling onslaught

Prudential chairman Harvey McGrath has admitted the insurer is set for more share price volatility in the near-term because of short-positions taken by investors over the US$35.5bn bid for AIA. Figures show that short selling of the shares increased by 55% on the day the deal was announced, with the share price down 20% in the first 48 hours.

...Focus: Jamie Dunkley and Kamal Ahmed look at the contrasting strategies from Asia-focused Prudential and Aviva, which is backing expansion in Europe. But while Aviva should benefit from short-term uncertainty over the Pru's Asian gamble, in the long run the Pru could emerge the real winner.

[ pp.B1, B7 ]

Brown drawn into debt row as Iceland votes 'no'

Icelandic voters, according to exit polls late Saturday, have come out overwhelmingly against paying back the £3.5bn owed to the UK and Netherlands. Now Iceland president Olafur Grimsson is demanding that Gordon Brown personally agrees to cut the repayment owed.

[ pp.B1, B5 ]

Tories pledge support for small firms

Shadow Business Secretary Ken Clark has pledged support for small and medium sized companies if the Conservative Party wins the election. Proposals could include a return of the Enterprise Allowance scheme brought in by the Thatcher government. Meanwhile, Clarke has emerged as a key player in the Tory election strategy following the 'wobble' induced by the tightening in the polls.

[ pp.B2, B6 ]

Comment

...Kamal Ahmed says that while there remain a number of risks about Prudential's US$35.5bn bid for AIA, CEO Tidjane Thiam seems set to be remembered as the man who pulled off the insurance deal of the decade.

...Microsoft CEO Steve Ballmer is firmly embracing the future of cloud computing as the way ahead for business, although security remains a key issue.

[ p.B4 ]

Economic Agenda

...Liam Halligan, chief economist at Prosperity Capital Management, is worried about a growing political census that a weak pound and higher inflation could be a pain-free way to avoid facing up to the debt crisis. But the gilt markets may not be so gullible.

[ p.B4 ]

The Markets

...Tom Stevenson, an investment director at Fidelity International, points out that a year ago most investors were still reeling from the impact of the latest economic and financial shocks, although it actually marked the start of the current share rally. But investors should be wary of taking part in the easiest game of all - investing with the benefit of hindsight.

[ p.B4 ]

Briefs

Virgin Atlantic CEO Steve Ridgway claims the British Airways transatlantic tie-up with American Airlines, which is now awaiting an EU decision after receiving the US go-ahead, would lead to higher fares. ● Northern Rock is expected this week to reveal full-year losses of about £400m. ● Essar, the oil and power business owned by India's Ruia brothers, is set for an US$8bn London listing. ● The British Chambers of Commerce is forecasting UK growth next year of just 2.1%, compared with its previous target of 2.3%. ● Hedge funds have reduced their investment in the film industry, new figures reveal. ● Wm Morrison is reportedly looking to put together a new package for FD Richard Pennycook to keep him with the group. ● Strong trading figures from the John Lewis Partnership this week are likely to lead to its 70,000 staff receiving a bonus of about 14% of their salaries. ● Unilever has disclosed it gave new CFO Jean-Marc Huet a £3.28m 'golden hello' when he joined in February. ● Toyota may delay the launch of new models because of continuing concerns over its accelerator problems.

[ pp.B1, B2, B3 ]

The Independent on Sunday

Man from Pru begins City charm offensive

Prudential CEO Tidjane Thiam is expected to tell institutional investors this week he plans to sell about £1bn of the AIA assets being acquired in the £24bn takeover. Meanwhile, speculation about an opportunistic bid by Axa for Prudential because of its falling share price have been played down, while Resolution has denied it is in talks to buy the Pru's UK operations. Simon Evans also reveals that most of the responsibility for making the Asian strategy work will fall on Barry Stowe, CEO of the Pru's current Asian business.

[ pp.79, 82-83 ]

Comment

...Margareta Pagano thinks the Spanish model of owning and running football clubs, which gives ordinary fans and supporters the chance to become owner-members, is something that British clubs should consider as a way out of their financial mess.

...Prudential CEO Tidjane Thiam looks likely in the end to win over the doubters in the City with his vision for the long-term future for the insurer in Asia.

...Speculation that Nestlé is thinking of trying to gain control of L'Oréal, in which it already holds a 30% stake, looks wide of the mark.

[ p.85 ]

Economic View

...Hamish McRae suggests that the long-term decline in British manufacturing industry may be coming to an end. But it will be a 'slog' to get it back to being the major engine of growth for the economy if, indeed, it can ever achieve this again.

...Although the Budget is generally expected be held on 24 March (although this has yet to be confirmed) it could become the first of three budgets this year, with an 'emergency' one after the election and a third following another election later this year if there is a hung Parliament.

[ p.84 ]

Business features

...Laurence Kotlikoff, a professor of economics at Boston University, believes that if the Obama/Volcker proposals are adopted, the next big run will be on the US government itself.

...John Lawless reveals that Selfridges in Oxford Street has teamed up with celebrity chef Mark Hix to open its new restaurant, the first by an outsider in a 100 years.

[ pp.86, 87 ]

Briefs

The Red Knights consortium putting tougher a possible bid for Manchester United FC claim to have had more than 100 potential investors contact them since their plans became known. ● Caledonia Investments CEO Tim Ingram is tipped to become the new chairman of Collins Stewart, replacing Terry Smith. ● PricewaterhouseCoopers may pursue Deutsche Bank affiliate Pago, which handled bank transactions for collapsed credit card processing company E-Clear, as part of efforts to get money back for Globespan's creditors. ● Vedanta Resources and Hudbay Minerals are among the potential bidders for Anglo American's US$800m zinc assets. ● Royal Bank of Scotland is believed to be planning to reduce its stock coverage of the small-cap sector to focus on larger and more profitable companies. ● Big Bear Group, which owns food brands including Sugar Puffs, has scrapped plans for an IPO. ● Liberty International is expected to announce demerger plans along with its results this week.

[ pp.79, 80, 81 ]

The Mail on Sunday

Comment

...Lisa Buckingham thinks the City should rally round the Prudential's £15bn rights issue and back CEO Tidjane Thiam's vision. Meanwhile, the Pru has taken a stand against hefty investment banking fees by absorbing extra risk in the cash-call to halve the costs of the issue.

[ p.78 ]

Markets and Economics

Taking Stock: Simon Watkins thinks that continuing large pension fund deficits in spite of the stock market rally could be a drag on future M&A activity.

Economics: Dan Atkinson sees hidden danger to the public finances from the 'joke jobs' in the public sector, which also lead to further bureaucracy and Byzantine regulations on health & safety.

Outlook: Interims from JD Wetherspoon on Thursday are expected to show it has held its margins along with a slight increase in like-for-like sales.

[ p.84 ]

Briefs

Asian competition regulators are said to have promised Prudential 'fast-track' approval for its £23bn takeover of AIA. ● VT Group will this week give a financial presentation to predator Babcock International to try and persuade it to raise its bid. ● Peel Group may sell its regional airports to help fund the £800m bid for Forth Ports. ● Hat Trick Productions achieved sales of almost £4m last year against £200,000 the year before after selling its 'Outnumbered' comedy format in the US. ● Hopes of a deal between British Airways and its cabin crew remain slim in spite of last minute concessions by the Unite union, sources claim. ● Budget retailer 99p Stores is to move to a new distribution warehouse to enable it to treble the number of shops its supplies, currently 129. ● The Serious Fraud Office has charged seven people in the UK with operating an alleged US$100m 'boiler room' share scam. ● Stanhope Capital is seeking support for its New City Initiative for higher ethical standards in the City. ● BSkyB is considering plans to offer a more flexible approach to fees paid by pubs which broadcast sports matches. ● CVC and the Ontario Teachers' Pension Fund are frontrunners to acquire the Camelot lottery group. ● Wind power generator Ecotricity revealed profits down 83% to £335,000 last year. ● The construction industry is lobbying all political parties to urge them not to cut public building projects after the election because of the impact on jobs. ● Cineworld is set to report on Thursday full-year profits up from £27.6m to about £32m.

[ pp.75, 76, 78, 79, 81, 82, 83, 84 ]

Sunday Express

Comment

...Tracey Boles welcome reports that the management and unions at the Royal Mail are seemingly getting close to a three year deal which would see higher pay and shorter hours in return for allowing more high-speed sorting machines to be introduced.

...The 2009 results this week from Northern Rock may show it has probably seen the worst of its bad debts, although the bank is unlikely yet to be back in profit.

...The Prudential's institutional investors should be backing CEO Tidjane Thiam in his £23.5bn takeover of AIA for his ambitious expansion plans rather than leaving the Pru eventually to be picked off by a foreign predator.

[ p.F2 ]

Briefs

The Red Knights seeking to buy Manchester United FC have reportedly approached City grandees Sir Victor Blank and Sir Roy Gardner to join their team. ● The Formula One Grand Prix calendar next year will see races added in Rome, South Korea and Canada. ● The British Chambers of Commerce believe whoever forms the next government should abandon plans to raise National Insurance and increase VAT instead. ● Russian oligarch Oleg Deripaska is to expand his Kuban Airlines with more destinations in Europe, possibly including London. ● The Takeover Panel is believed to be examining comments made by Kraft during the Cadbury bid about saving the Somerdale facility near Bristol, which it subsequently closed after winning the takeover. ● Business Secretary Lord Mandelson has backed Airbus' UK operations in the competition with Spain over work for the new A400M military transport. ● The Wellworths store in Dorchester, which replaced the original Woolworths a year ago, is looking for new sites. ● Ila Group, the personal alarms for women business which joined Aim last week, is now planning international expansion.

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Profiles

The Sunday Times

My spine-tingling merger

Tom Alexander, new CEO of the merged Orange and T-Mobile operations in the UK, believes there will no culture clash in combining the two mobile companies, owned by France Telecom and Deutsche Telekom respectively. He is adamant that reports of up to 4,000 job losses are wrong, while also insisting there are no plans to dump the less-popular T-Mobile brand in the UK in favour of Orange. Alexander believes we are now at the cusp of the next real revolution in mobile telephony with the development of smart phones which expand people's horizons dramatically.

[ p.3.6 ]

The Sunday Telegraph

'We can win back the customer's confidence. We are doing a better job'

Tadashi Arashima, global managing director of Toyota, admitted at the Geneva Motor Show which started last week that the company's sales could fall in the short-term across Europe as a result of the recall scandal. But he insists customers have reacted well to the recall and have been reassured about Toyota's commitment to quality, claiming the company can win their trust back. Toyota's sales in the UK are down 5% so far this year, with its market share slipping from 6.81% to 5.01%.

[ p.B9 ]

The Mail on Sunday

A boss who thinks small to grow big

Jim McCarthy, CEO of Poundland, reports that growth at the 'everything is a £1' store chain rose 4.4% over Christmas on a like-for-like basis, with sales accelerating since then. But he acknowledges that while the surge in popularity of discounters has been helped by the demise of Woolworths, the big threat remains competition from the major supermarkets as they increasingly move into non-grocery products. He plans to open between 50 and 60 new stores this year and is also considering expanding away from the High Street into out-of-town developments.

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