LONDON, Sept 8 (Reuters) - British newspapers reported the following business stories on Sunday:
The Sunday Times
Glencore is expected to tell investors this week that cost savings from its blockbuster $46 billion merger with Xstrata will be twice what it predicted.
When the merger closed four months ago CEO Ivan Glasenberg said he expected to squeeze $500 million of synergies from the combination. He is set to increase that figure to at least $1 billion this week at an investor day in central London on Tuesday.
Construction group John Laing is being groomed for sale after its owner Henderson, the asset manager, appointed the investment bank Greenhill to explore “strategic options” for the business.
Greenhill is looking at selling the business to a rival or floating it. The move comes just months after Henderson settled a high-profile legal case with 22 pension funds over the deal, seven years ago, in which it took control of John Laing for 530 million pounds.
Serco could be excluded from a huge defence outsourcing deal after becoming caught up in two government probes into claims that it overcharged the Ministry of Justice for tagging criminals and falsified prisoner transfer documents.
Serco is part of a consortium led by American engineering consultancy CH2M Hill that wants to run the Defence, Equipment & Support (DE&S) agency responsible for buying fighter jets, tanks and warships for the Ministry of Defence. Last week Philip Dunne, the minister for defence equipment, support and technology, hinted that CH2M Hill would need to consider ditching Serco to have any chance of clinching the deal.
CHANCELLOR TO OK ROYAL MAIL AND LLOYDS FUNDRAISING British chancellor George Osborne could this week give the go ahead to the 3 billion pound market listing of Royal Mail and the sale of about 5 billion pounds ($7.81 billion) of shares in Lloyds Banking Group.
City sources said announcements on both deals could come late this week, barring last-minute hitches but postal unions still think the “intention to float” notice, could be delayed by disputes over pay and pensions.
Britain’s second- biggest online estate agent Zoopla is exploring a stock market float that could value the firm at more than 1 billion pounds.
The six-year-old property website has hired Credit Suisse to explore growth opportunities with a float the most likely option for the group, which could be worth up to 1.3 billion pounds, according to bankers.
The Sunday Telegraph
MERLIN ENTERTAINMENTS EYES 3 BLN STG IPO Merlin Entertainments, the owner of Britain’s Madame Tussauds and Legoland attractions, will offer more than 10 percent of its shares to retail investors in a 3 billion pound-plus stock market listing before Christmas.
Chief executive Nick Varney wants to offer a significant proportion of its shares at flotation to small investors, given the high profile of its brands among the general public. Varney has been meeting institutional investors over the last week to smooth a path towards an IPO in a bid to avoid a repeat of its failed attempt at a stock market listing in 2010.
WONGA‘S INDIA DEAL TO TRIGGER OVERSEAS EXPANSION
Pay day lender Wonga will try to tap into India’s booming economy after buying a 75 percent stake in domestic lender Nahar Credits Private.
Chennai-based Nahar Credits is historically focused on commercial loans to small companies, a business which has now been closed. But its existing licence permits lending to individuals, which will allow Wonga to tap into the country’s growing middle classes in need of short-term finance. Wonga paid 3.2 million pounds for the stake.
TSB PROMISES A RETURN TO ‘TRADITIONAL BANKING’
British bank TSB will focus on local customers and local businesses when it returns to the British high street this week after an 18-year absence.
The bank, formed from the separation of a 631-branch unit from Lloyds Banking Group, begins operating as a stand-alone business on Monday, and will use a local economy index to show how savers’ deposits are being put to work into the local economy. Chief Executive Paul Pester has made a vow to its 4.5 million customers that their money will not be used in investment banking.
The Confederation of British Industry (CBI) has called for a new body to oversee the country’s long-term infrastructure spending plans to be set-up to end the “feast and famine” cycle of spending on UK projects.
The CBI wants a new National Infrastructure Commission to evaluate the UK’s needs up to 30 years ahead after the World Economic Form’s global competitiveness index showed Britain now sits 28th worldwide in terms of its quality of infrastructure, trailing Saudi Arabia and Barbados.
BANK LEVERAGE RULE COULD BACKFIRE-BBA
The British Bankers’ Association said forcing banks to hold greater amounts of capital under a new “leverage ratio” rule could lead lenders to give up on less risky business.
The BBA warned that a requirement to hold Tier 1 capital equivalent to at least 3 percent of banks’ total assets might encourage lenders to pursue more risky activity at the expense of lower-risk, but lower-return, business.
The BBA said the calls to introduce an even higher leverage ratio requirement of 4 percent would particularly hit banks involved in low-risk businesses such as prime mortgage lending.
Senior staff working for the body responsible for paying out compensation claims linked to BP’s Gulf of Mexico oil spill settlement engaged in improper and unethical conduct, according to an independent investigation.
A report into the probe, led by former FBI director Louis Freeh, found the behaviour of some staff of court-appointed claims administrator Patrick Juneau was “possibly criminal”, citing conflicts of interest and pervasive misconduct. However, the report said the conduct did not warrant shutting down payments to victims of the company’s 2010 spill.
LTC BLACK CAB PRODUCTION TO RE-START
Production of London Taxi Company (LTC) black cabs will resume this week almost a year after the firm went into administration and made 136 workers redundant.
The company, founded in 1919, was rescued by Li Shufu, of Shanghai-based Geely Automotive, and Volvo, in February for 11.4 million pounds. LTC has spent the past six months modernising its brand and said it already had orders to supply 400 vehicles to Saudi Arabia and Australia.
The Mail on Sunday
VODAFONE EYES 6 BLN STG MAROC TELECOM DEAL Vodafone is lining 6 billion pound swoop on Maroc Telecom after it agreed to sell its 45 percent stake in Verizon Wireless for $130billion. The British mobile phone group has identified several takeover targets, including Maroc Telecom and France’s SFR, following the cash-and-shares deal with Verizon, said the report, citing bankers.
The turnaround of Harrods Bank to profitability will take at least another three years after a boardroom overhaul.
The private bank made its fourth annual loss in the year to January and said it continues to rely on ‘parental support’ from present Harrods’ owner Qatar Holding. General manager Malcolm McLean, who began the turnaround after the acquisition of Harrods by Qatar Holding, has stepped down to be replaced by David Cathie, a former chief executive of wealth manager Adam & Co., while four other directors were replaced during the year.
The Independent on Sunday
WETHERSPOON STAFF TO SHARE 22 MLN STG BONUS POT Pubs chain JD Wetherspoon will hand over a 22 million pounds bonus pot to more than 20,000 kitchen and bar staff on zero hours contracts this week.
The average 1,000 pounds-plus bonus will be a welcome boost to the thousands of staff who are on little more than the 6.09 pound per hour minimum wage. It was revealed in August that close to 80 percent of the cheap-ale pub chain’s 30,000 employees are on zero-hour contracts, which have been criticised for not having guaranteed hours or a schedule.
Demand for offices in London has surged by nearly 40 percent over the past year, as ambitious companies look to expand on the back of a resurgent economy, according to new data from commercial estate agent DeVono.
While 90 percent of the skyscraper space in The Shard, on the South Bank, is still unoccupied, and building projects in the City have stalled due to lack of funding, commercial real estate in the City’s borderlands - such as King’s Cross, Clerkenwell and Shoreditch - is in high demand by companies searching for better value.
Takeovers of UK companies by foreign firms are at a six-year high as investors increasingly look to Britain for successful acquisitions.
Figures from the Office for National Statistics show foreign companies spent 23.4 billion pounds on British takeovers in the three months to the end of June, up from 3.5 billion pounds in the previous three months. The figure is the highest since the second quarter of 2007 and includes the deal for software start-up Monoidics, bought by Facebook in July, and baby food maker Ella’s Kitchen, which was taken over by U.S. giant Hain Celestial in May.
Royal Mail will offer up to half its annual profits in dividends after its 3 billion pound privatisation, which is expected to be announced this week.
The board will meet this week to discuss final arrangements for the flotation, but has already backed the proposed dividend payment, which would make the flotation attractive to institutional and retail investors, in principle.