BP and Shell revive plans for merger

BP and Shell are thought to have revived plans for a merger to create an oil giant with a market value of £250 billion. The City is awash with talk that Britain’s two largest oil companies have engaged financial advisors to discuss terms for a so-called friendly merger that could result in £2.5 billlion of cost savings for the enlarged group.

BP while under Lord Browne, former chief executive, is said to have approached Shell last year about a deal. Those plans are thought to have been reheated under the leadership of Tony Hayward, BP’s new chief executive. Royal Dutch’s A-shares rose 33p to £20.67p, while its B-shares gained 26p to 21.09. (James Rossiter)

Post union to set new dates for pay strikes

Post office counter staff staged a half-day strike in the latest clash over pay between the Communication Workers Union and Royal Mail. The union will set more strike dates for delivery workers today after Friday’s first national walkout for 11 years. Royal Mail is still attempting to clear the backlog. Another strike could take place next week. Royal Mail said that only 25 of its 458 main post offices were closed yesterday because of the action, but the CWU said that the others were opened by managers and that service was cut. Sub-post offices were not affected because they are franchised businesses. (Christine Buckley)

Barclays update

Barclays said that its merger with ABN Amro, the Dutch bank, was progressing well and it promised to update the market on the deal by July 23. Barclays has been given until July 4 by Dutch financial regulators to either issue formal offer documents or tell investors how the merger with ABN was moving ahead. Barclays is still seeking approval for the merger from financial watchdogs. Barclays shares closed down 4p at 692p. (Christine Seib)

Private equity inquiry

Round two of the Commons Treasury Select Committee’s inquiry into private equity kicks off today, with David Blitzer, of Blackstone, Donald MacKenzie, of CVC, Jon Moulton, of Alchemy, and Peter Taylor, of Duke Street, due to face MPs. They could have an easier time than their predecessors because Angela Eagle, the Labour MP and a staunch critic of financiers, is no longer a committee member after being given a post at the Treasury. (Siobhan Kennedy)

Property chief jailed

Shaid Luqman, whose wealth has been estimated at £250 million, was jailed for 18 months in relation to a multimillion-pound property fraud. He was found to be in contempt of court for failing to comply with court orders issued in an investigation into what a High Court judge called a “massive alleged commercial fraud”. His business, Lexi Holdings, went into liquidation last October with debts of more than £100 million. (Michael Herman)

Australian retailer Coles sold for £9.3bn

Wesfarmers, the Australian conglomerate, has offered A$21.9 billion (£9.3 billion) for Coles, the retailer, in Australia’s largest takeover bid. The Perth-based mining, insurance and industrial group offered A$4.00 cash and 0.3 Wesfarmers shares for each Coles share, valuing the retailer at A$17.25 per share. Rick Allert, the chairman of Coles, called the deal “a great outcome for Coles shareholders” and said that the board had recommended the offer. Wesfarmers said that the acquisition of the Coles, based in Melbourne, was expected to be completed by October. (AP)

Manor Care takeover

The board of Manor Care, an American provider of short-term postacute services and long-term care, has approved a takeover by Carlyle Group. Manor Care said the total purchase price was about $6.3 billion (£3.1 billion), representing about a 3 per cent premium to Manor Care’s Friday close at $65.29. In April, Manor Care said that it was evaluating its strategic options. (AP)

Snub for iTunes

Universal Music Group, the world’s largest music company, has declined to sign a two-year deal with Apple’s iTunes music store. It will continue to sell music and videos via iTunes on a month-to-month basis, a source said. The music company, owned by Vivendi, of France, could now work with new partners, potentially weakening Apple’s dominant hold on digital music retail. (Reuters)

Macquarie in TV bid

Fairfax Media and Macquarie Bank’s media unit are expected to announce a joint A$1.3 billion (£550 million) bid for Southern Cross Broadcasting, a regional television company. Fairfax, which merged with Rural Press in May, and Macquarie Media’s Regional Radioworks are expected to offer up to $18 per Southern Cross share, a 10 per cent premium to yesterday’s close of $16.44. (Chris Johnston)

Korean tycoon jailed

A court in Seoul sentenced Kim Seung Youn, the South Korean tycoon, to 18 months in prison over his role in an attack on bar workers involved in a previous scuffle with his son. The Hanwha Group chairman’s bodyguards took the victims to a building site, where Kim attacked them. He hit one with a steel pipe and threatened them with an electronic shock device. Kim is expected to appeal. (AP)

Oil explorer takes AIM

An American oil and gas explorer is set to become one of the biggest companies to float on the Alternative Investment Market this year. Leed Petroleum is hoping to raise just over £60 million in an IPO to list with a market capitalisation of £150 million. The company, from Louisiana, has 13 prospects in the Gulf of Mexico and plans to drill at least 13 wells in the next two years. (Steve Hawkes)

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