Economics
Eurozone business activity rose to 52.7 points in February, from 51.8
points in January, according to the widely watched Purchasing Managers
Index. A reading above 50 points indicates expansion. The services sector
rose to 52.3 points in February, from 50.6 points in January, while
manufacturing sector activity slumped to a four-month low of 52.3 points,
from 52.8 points in January.
French consumer spending on household manufactured goods fell 1.2 per
cent in January after a 2.1 per cent rise in December, giving an annual rise
of 2.2 per cent.
Italian inflation Consumer prices rose 0.4 per cent in January and
increased 2.9 per cent year on year, Italy’s statistics office said.
Banking
& finance
Sovereign wealth funds will be asked to accept a voluntary code of
conduct for their investment activities under proposals set for approval
next week by the European Commission.
China’s increasingly aggressive sovereign wealth fund is poised to
unleash a $10 billion (£5 billion) investment spree in Japan and is
initially expected to set its sights on the energy sector.
Lloyds TSB reported a 6 per cent increase in full-year profits, helped
by strong performance in its UK retail banking operation.
Corporate bonds The credit crunch, triggered by defaults on high-risk,
sub-prime mortgages, appeared to have travelled right across the financial
system as it emerged that the cost of insuring even robust corporate bonds
has hit a record high.
NatWest The British bankers known as the “NatWest Three” have been
sentenced to three years and one month each in jail for their role in an
Enron-related fraud case.
Pearl Assurance’s £5 billion takeover of Resolution may take a further
three months after the closed life fund consolidator continued talks with
the Financial Services Authority.
Citibank’s chief executive, Vikram Pandrit, said that its Polish unit,
Citibank Handlowy, is not for sale. Markets have speculated that Citibank
could sell its 75 per cent stake in Handlowy to raise cash to help it to
recover from losses related to the US sub-prime market.
Construction
& property
Oak Holdings has won approval from Rotherham Metropolitan Borough
Council for a 250-year lease on its £350 million YES! Project, a
leisure-based resort, activity and convention destination.
Consumer
goods
British American Tobacco has won the auction to buy Tekel, Turkey’s
state-owned cigarette company, for $1.7 billion (£864 million).
Carlsberg and Heineken, the continental brewers, are scheduled to
complete their proposed £10 billion-plus takeover of Scottish &
Newcastle on April 28, giving any other suitors until March 31 to launch a
counterbid.
Greene King, the Suffolk brewer and pub operator, is about to launch a
£1.5 million advertising campaign to boost sales of Old Speckled Hen, its
premium ale brand.
Engineering
VW Klaus Volkert, the former Volkswagen union boss, was yesterday
sentenced to two years and nine months in jail for his role in a widespread
corruption scandal in Europe’s biggest carmaker.
Michelin, the French tyremaker, has kicked off a fresh round of price
rises in Europe, passing on an increase in raw materials such as natural
rubber, synthetic rubber, steel and oil. The increases, to take effect
between March 15 and July 1, will hit both consumers and businesses.
Spectris, which makes precision instruments and controls, has said that
its exposure to emerging markets and robust sectors will make it “resilient”
in tougher economic conditions, after the company beat expectations with a
28 per cent rise in adjusted pre-tax profits.
Health
GlaxoSmithKline said its pandemic flu vaccine has been recommended for
approval by European officials. Previously, there has been no approved
vaccine against the H5N1 strain, commonly known as bird flu, with
antiretrovirals such as Tamiflu the only available treatment. The
recommendation means the vaccine is likely to be approved as it amounts to a
European Commission rubber stamp.
Industrials
Dow Chemical’s business in Europe has started well this year and demand
for chemical products remains strong, said Markus Wildi, Dow’s president for
Europe. In 2007, Dow’s European sales grew by 17 per cent to $20 billion
(£10 billion), boosted by acquisitions including Wolff Walsrode from Bayer.
Europe, Dow’s second-biggest market after North America, generated more than
a third of group sales last year.
Leisure
Arsenal, the Premier League football club, said that its move to the
Emirates stadium combined with a more lucrative TV rights deal and the £16
million sale of Thierry Henry drove half-year pre-tax profits up 55 per
cent. The football club reported pre-tax profits before exceptional items
for the six months to November 30 of £20 million, up from £12.9 million a
year before. Overall sales slipped 4 per cent to £97.7 million.
Laurel Pub Company, the pub and restaurant operator controlled by
Robert Tchenguiz, is being advised by Kroll, the risk consultant and
insolvency specialist, as it considers a partial administration of about 80
of its 460 outlets.
Pret A Manger, the sandwich bar operator, has been acquired by
Bridgepoint Capital in a £345 million deal that will see Goldman Sachs, the
private equity firm’s adviser, take a stake of about 20 per cent.
Media
Ingenious Media Active Capital has made a further investment of up to
£2 million in the television production company Whizz Kid Entertainment.
Ingenious said Whizz Kid will use some of the new funds to acquire a
controlling stake in Precious Media, a joint venture with Peter
Christiansen.
Natural
resources
Rio Tinto faces an EU inquiry into possible anti-competitive practices
in the mining group as it fights a $147 billion (£74 billion) hostile bid
from BHP Billiton. The European Commission said it had begun proceedings
against Alcan, the Canadian aluminium producer that Rio bought last October.
Xstrata Alloys and Nkwe Platinum have entered into an agreement whereby
Xstrata is to acquire new order prospecting rights for the De Wildt project
from Nkwe for $12 million (£6.1 million).
Alaska could revoke leases for oilfields such as Prudhoe Bay if top
energy companies refuse to participate in a government natural gas pipeline
plan. Exxon Mobil, BP and ConocoPhillips together control more than 35
trillion cubic feet of known gas reserves on the Alaska North Slope.
Carnegie Minerals has said that Charlie Northfield, a mining engineer
from Plymouth, has been released from Gambia’s Mile 2 prison on bail. The
bail deposit of $450,000 (£229,000) has been secured by Alan Hopkins,
Carnegie’s managing director. Mr Northfield is still accused of economic
crimes along with the company.
Retailing
John Lewis sent a shiver through the high street by reporting its
biggest sales decline for almost a year. It said the week to February 16 had
been “one of the toughest in recent memory” — with a 3.5 per cent fall
across the estate.
Support
services
Humberts, the estate agency and surveyor part-owned by the property
tycoon Vincent Tchenguiz, is in talks with several firms about a possible
takeover after reporting a £17 million loss yesterday.
Autogrill has won a €45 million (£34 million) contract to provide
catering services at the George Best Belfast City airport. Autogrill said
that the contract is worth more than £30 million in sales during its
ten-year duration.
Biffa, the waste business, may have to wait until March 12 before a
counterbid is made by Terra Firma, the private equity group, and Suez, the
French utilities group. Biffa has already accepted an offer from a
consortium led by Montagu Private Equity and an infrastructure fund backed
by General Electric and Credit Suisse. A late offer by the Terra Firma
consortium could spark a bidding war.
Technology
Microsoft Rivals attempting to derail Microsoft’s bid for Yahoo! are
expected to argue that a merger between the two companies would create an
internet group with a three-quarters share in web mail and instant
messaging.
BlackBerry Research in Motion, the maker of the BlackBerry, is seeking
to shed the product’s reputation as the tool of the City banker and remodel
it as a mass-market mobile after a tie-up with Vodafone. Meanwhile, the
Canadian company said that net new subscribers for its fourth quarter, to
the end of February, should total 2.14 million — 20 per cent above its own
previous forecast and above analysts’ expectations of 1.88 million. The
group’s total customer base should now total 14 million by the end of the
quarter.
Telecoms
Ofcom, the communications regulator, has awarded new radio licences to
ten organisations, including BT, France Telecom’s Orange and T-Mobile
following an auction. The licences, for higher-frequency bands, will allow
the holders to operate broadband and wireless internet connection.
Broadband review Plans for an independent review of high-speed
broadband were unveiled by the Government. The report comes amid concern
that Britain risks falling behind other countries because of its failure to
invest in a service.
Transport
MAXjet said it has extended to February 27 the deadline for the receipt
of qualified bids for the company. MAXjet is to auction its assets after
filing for Chapter 11 bankruptcy protection in the US last December. The
company said at the time that it could not overcome spiralling costs,
competition pressures and weakening market confidence.
RMT A jobs dispute involving railway signallers is set to spread after
the Rail, Maritime and Transport Union said a 24-hour walkout by 50
signallers in the Lincoln area will go ahead today, while hundreds more
workers along the East Coast Main Line will vote on whether to take
industrial action. The union is in dispute with Network Rail after claims
that a Lincoln worker with 33 years’ experience was made redundant rather
than being offered an alternative job.
Utilities
RWE, the owner of npower, said it has finally made an acceptable profit
in the UK for the first time since 2003. The company, which entered the UK
market in 2001, said that operating profit had risen 40 per cent to €724
million (£545 million) in 2007, up from €512 million. Npower put its prices
up by 17.2 per cent for gas and 12.7 per cent for electricity in January. It
was quickly followed by four of the other five suppliers, including British
Gas.
Nuclear waste from new power stations will not be a burden on the
taxpayer, according to draft legislation. Under the proposals, nuclear power
developers in the UK will be required by law to set up a fund to cover the
cost of eventual decommissioning before any bricks are laid at new stations.
