The Mail on Sunday
CENTRICA JOINS SHALE HUNT
Energy group Centrica (CNA.L) is to enter the shale gas
business as it looks to double the size of Direct Energy, its
North American operation, to a turnover of 12.2 billion pounds
within five years. Centrica is expected either to enter a joint
venture or to acquire a company with the capability to extract
gas from North American shale rock sites. Centrica currently has
five million U.S. customers and is looking to invest around 1.5
billion pounds in the region over the next few years. Direct
Energy chief executive Chris Weston said last month: "We are
interested in shale gas. It is a phenomenon."
NEW MORRISONS CHIEF SEEKS SIR KEN'S COUNSEL
Dalton Philips, the new chief executive of supermarket chain
Morrisons (MRW.L), has arranged a series of store visits with
former chairman and major shareholder Sir Ken Morrison. Philips
is undertaking a two-month review of the chain and is also
expected to meet other major shareholders. Morrison recently
voiced his displeasure at the departure of Marc Bolland, who is
to become chief executive at rival Marks & Spencer (MKS.L)
having spent just four years at the helm of Morrisons.
JJB BOSS CALLS HALT TO ORDERS
The sportswear chain JJB JJB.L has surprised the
sportswear industry by putting its stock orders on hold only two
months before a period of expected high demand during the World
Cup in June. The new chief executive Keith Jones is attempting
to restructure the company after a difficult 2009, and has begun
a review of its buying programme. A person familiar with the
matter claims the move will not affect orders for the World Cup.
RUSSIANS DEMAND CREW GOLD SHAKE-UP
The power struggle between two investors in the British
miner Crew Gold continues, with the Russian steel company
Severstal (CHMF.MM) asking for a special meeting to hire new
directors which it hopes will reduce what it considers the
overbearing influence of the Canadian investment bank Endeavour
Financial. Endeavour holds a 43.2 percent stake in the company
and has appointed three members of the board. Although Severstal
holds a smaller 26.6 percent stake, its call for a meeting is
backed by other investors.
BARCLAYS RESCUES LIVERPOOL
Barclays (BARC.L), sponsor of the Premier League, is working
on an agreement to refinance Liverpool Football Club, oust the
current owners and give the chairmanship to British Airways'
BAY.L Martin Broughton. The bank's investment banking arm
Barclays Capital has been appointed to find a buyer. Barclays
will also replace Royal Bank of Scotland (RBS.L) and Wachovia as
the club's main creditor, freeing it from its outstanding loans
of 237 million pounds.
LLOYDS EYES BROKING DEBUT
Lloyds Banking Group (LLOY.L) is holding discreet talks with
various stockbroking firms, including Numis Securities,
Evolution (EVG.L), and Execution Nobel on setting up a joint
venture which would cement its presence in equity capital
markets. A joint venture would allow Lloyds to make large
profits through underwriting the equity market fundraisings of
its clients. The state-backed bank's attempts to headhunt
brokers in recent month have provoked accusations of
anti-competitive behaviour from independent stockbrokers, so
collaborating with a broker is now Lloyds' preferred option.
ITV LINES UP BIG HITTERS
The chief executive of ITV (ITV.L), Adam Crozier, is seeking
out potential programme makers to head the broadcaster's
production arm ITV Studios. The Channel 4 director of television
Kevin Lygo and Talkback Thames chief executive Lorraine
Heggessey have both emerged as possible candidates for the role.
Crozier wants an incoming head of ITV Studios to produce popular
new programmes that it can export.
Gem Diamonds (Buy)
The Sunday Telegraph
VODAFONE CONSULTS OVER U.S. MERGER
Vodafone (VOD.L) is to consult shareholders on the options
for U.S. Verizon Wireless, Vodafone's joint venture with
American partner Verizon Communications. Options under
consideration include a merger between Vodafone and Verizon
Communications, which would create a company worth more than 120
billion pounds. Verizon is thought to favour buying Vodafone's
45 percent stake in the joint venture, but heads of rival
businesses believe that the merger is the most likely outcome.
PROFIT WARNINGS AT LOWEST FOR DECADE BUT LIKELY TO RISE
In the first quarter of 2010, the number of profit warnings
issued by British companies was at its lowest for a decade.
However, accountant Ernst & Young warns that the figure is
likely to rise in coming quarters as support measures are
withdrawn from the economy. Fifty four profit warnings were
issued in the first quarter of 2010, down from 117 in 2009. The
warnings issued in the first quarter were largely from companies
offering services to businesses and those in industrial sectors
including engineering and electronics.
WHAT'S MINE IS MINE
Leading investors in the UK's largest mining companies have
voiced concerns over recent calls for South African mines to be
returned to black ownership. ANC Youth League leader Julius
Malema said last week: "They have exploited our minerals for a
very long time. We want the mines, now it's our turn." A leading
investor in miners BHP Billiton (BLT.L) and Rio Tinto (RIO.L)
said: "It's the cost of doing business there. But clearly there
could be a point when it could be less attractive to invest in
South Africa." BHP and Xstrata XTA.L both declined to comment.
Vedanta Resources (VED.L) (Buy)
ICAP (IAP.L) (Buy)
The Independent on Sunday
UK'S BIG FIRMS WARN OF DANGER WITHIN NEW CORPORATE CODE
British Airways BAY.L, along with other UK businesses
including Tesco (TSCO.L), Morrisons (MRW.L) and Sainsbury
(SBRY.L) have warned that the obligation to hold annual
re-election of directors that is to be included in the revised
corporate governance code published next month could leave
directors open to recriminations from disgruntled employees who
hold shares in their employer. Alan Buchanan, BA's company
secretary, said that annual re-election would give labour groups
the opportunity to "disrupt annual meetings". BA is involved in
a labour dispute with the union Unite over redundancies and
changes to working conditions of its flight crew.
CHINA SEEKS ANGLO'S ZINC ASSETS
The state-run China Metallurgical Corporation is among the
bidders for the 800 million dollar zinc assets of mining group
Anglo American (AAL.L). CMC is considered to be among the most
favoured bidders because of the financial weight that it wields.
Other potential bidders include private equity firms Apollo and
First Reserve and mining groups Vedanta Resources (VED.L) and
HudBay Minerals. The sale is being managed by banks UBS
UBSN.VX and Goldman Sachs (GS.N). The assets are being sold as
part of a streamlining of Anglo. Shares in Anglo closed up 73
pence at 2,979-1/2 pence on Friday.
RISE IN PROFITS FOR DEBENHAMS
Department store chain Debenhams (DEB.L) is to release a
six-month trading update on Tuesday that is predicted to report
a 14.3 million pound increase in pre-tax profits to 116 million
pounds. David Jerry, a retail analyst at Investec (INVP.L) which
made the prediction, said that better-than-expected trading has
led to a large increase in gross profit margin. Investec is
forecasting a full-year increase in pre-tax profits of 15.6
million pounds to 141 million pounds.
BANKS PREPARED FOR A SPRING OF DISCONTENT OVER BONUSES
Trade body the Association of British Insurers has warned
the shareholders of the Royal Bank of Scotland (RBS.L) that they
will need to make a "careful considered judgement" before voting
this spring on the company's remuneration plans, which will
include new bonus arrangements for chief executive Stephen
Hester. Fellow British banks Lloyds Banking Group (LLOY.L) and
HSBC (HSBA.L) will also soon be submitting potentially
controversial pay reports to their shareholders. The ABI last
week announced that it expects more remuneration packages to be
rejected this year after it was revealed that five companies'
pay reports were rejected by shareholders in 2009.
TWO-THIRDS OF PRIVATE SECTOR STAFF LACK PENSION
Figures released by government department the Office for
National Statistics show that 62.9 percent of private sector
employees are not participating in an occupational pension
scheme. This compares to an 85 percent participation rate among
public sector workers. The figures have been described as
demonstrating the government's failure to encourage private
sector workers to save for retirement by Lord Oakeshott, the
treasury spokesman for British political party the Liberal
Democrats. Business trade body the Confederation of British
Industry last week voiced concern that public sector pensions
are more generous than their private sector equivalents, making