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Economics
Negative equity: One homeowner in ten fell into negative equity during
the first three months of the year, the highest proportion for 15 years, the
Bank of England said. The Bank estimated that between 7 per cent and 11 per
cent of homeowners with a mortgage owed more to their lender than their
property was worth, the equivalent of 700,000 to 1.1 million householders.
UK housing: Buyers are beginning to lose the upper hand in house sales
as fresh evidence suggests that in some regions it is becoming a sellers
market.
Sterling: The pound soared to its highest level this year yesterday as
confidence in the British economy returned. It is up by 2.8 per cent against
the currencies of the UK’s main trading partners and almost 14 per cent
higher than its level at the start of the year.
Eurozone output: In April eurozone industrial production shrank by 21.6
per cent compared with a year earlier in the 16-country area, the European
Union’s statistics office said. That exceeded the previous year-on-year
record decline of 19.3 per cent logged in March and economists’ expectations
of a 20.2 per cent drop.
US consumption: US consumer confidence rose to a nine-month high in
June. The Reuters/University of Michigan Surveys of Consumers said that its
preliminary index of confidence for June rose to 69.0 from May’s 68.7. That
was slightly below economists’ expectations of a 69.5.
Chinese output: China’s factory output growth rebounded more than
expected in May. The acceleration in annual industrial production growth, to
an eight-month high of 8.9 per cent from 7.3 per cent in April, beat
economists’ forecasts of 7.5 per cent.
Banking
& finance
Barclays: After weeks of speculation, BlackRock, the US money manager,
has announced that it will buy Barclays Global Investors for $13.5 billion
(£8.2 billion) in a deal that will make it the world’s biggest asset
manager. The deal, which also includes the iShares business, will more than
double BlackRock’s assets to about $2.7 trillion.
3i: The British private equity firm announced a near-total shareholder
take-up of its heavily discounted £732 million rights issue aimed at
strengthening its balance sheet. The company said that 96.6 per cent of
shareholders subscribed to the capital raising, part of the plan by Michael
Queen, the chief executive, plans to halve 3i’s debt pile.
Brit Insurance: The insurance company confirmed that it was in talks
over a potential all-share deal for Chaucer, a rival. The London-based
company said that there was no certainty that an offer would be forthcoming.
Construction
& property
Travis Perkins: The builders supplier said that the take-up of a rights
issue in the company was about 92.7 per cent. Citigroup and HSBC are acting
as joint bookrunners and will endeavour to procure buyers for the balance of
the available shares.
Property Recovery Fund: A new property fund focusing on distressed and
mispriced residential property in the Midlands and the North of England was
launched. It aims to raise £25 million.
Black Sea Global Properties: The company owned by Dinu Patriciu, the
Romanian architect-turned-entrepreneur, launched a £12.56 million bid to
take over Rutley European and bought a 29.9 per cent stake in Deutsche Land.
Consumer
goods
Dairy Farmers of Britain: About 560 jobs were lost with the closure of
two dairies owned by the failed co-operative. DFB’s Bridgend dairy in South
Wales is closing with the loss of 279 jobs and the Blaydon dairy in the
North East is to close with most of its 290 staff being let go.
PricewaterhouseCoopers said that it was continuing efforts over the weekend
to sell 19 depots related to the Blaydon dairy, with a further 329 jobs in
jeopardy. The depots are expected to close by Monday should buyers not be
found. The moves follow the closure of DFB’s Lincoln dairy, with the loss of
127 staff, this week.
Heineken: The Dutch brewer has named Stefan Orlowski, an Australian who
is group commerce director, as managing director of Scottish & Newcastle
UK, its British business, after the abrupt departure last month of Jeremy
Blood.
Engineering
Koenigsegg: The tiny Swedish supercar maker is poised to buy Saab, the
Swedish premium brand of General Motors (GM). GM is said to be close to
announcing that it is in exclusive sale talks with the privately owned
company and Norwegian investors. The American carmaker declined to comment
but said that a deal with a “primary candidate” was likely to be signed by
early summer.
Health
Novartis: The pharmaceutical company expects a vaccine for the H1N1
virus, the source of the first flu pandemic for 40 years, to be available by
the autumn after it produced the first batch for testing ahead of schedule.
The vaccine will enter clinical trials next month, the Swiss drugmaker said.
Industrials
Chinese steel: China’s crude steel output climbed by 7 per cent in May
to 46.46 million tonnes, just shy of a record 46.9 million tonnes it
produced in June last year before cutting back output sharply because of a
spreading global financial crisis.
Leisure
Pubs: The number of pubs that are closing as a result of economic,
financial and regulatory pressures is estimated to have risen from 39 a week
to more than 50, according to CGA Strategy, the analyst that compiles
figures for the British Beer & Pub Association.
Coffeeheaven: The operator of 85 coffee shops in Eastern Europe, which
has frequently been tipped as a bid target for rivals including Starbucks,
Caffè Nero and Costa, confirmed that it had received a preliminary bid
approach from an unnamed party as well as from potential strategic partners
and investors interested in funding acquisition opportunities.
Golden Tulip Hospitality: The troubled Dutch hotel group is to be
acquired by Starwood Capital Group, the US investment firm, which intends to
form a strategic alliance between Golden Tulip and its own Louvre Hotels
business.
Media
IN&M Independent News & Media, which owns The Independent
and The Independent on Sunday among its more than 200 newspaper and
magazine titles around the world, said that discussions with banks and
bondholders on a refinancing of a €200 million (£170 million) bond were
continuing. Oleg Deripaska, the new owner of the Evening Standard, is
said to be close to agreeing to buy the Independent titles.
Setanta Sports: The ailing broadcaster was rescued by Len Blavatnik, a
Russian-born billionaire, in a last-minute deal that will save English and
Scottish football from having to plug a £500 million black hole. Mr
Blavatnik, one of the oligarchs behind TNK-BP, the Russian oil joint
venture, is to inject £20 million and take control of Setanta. With other
injections of cash, this will ensure the company can survive.
Natural
resources
Vedanta Resources: The India-focused mining group launched a $1.0
billion (£606 million) convertible bond and its iron ore subsidiary unveiled
plans to boost output by more than half, helped by a takeover.
Regal Petroleum: The explorer has raised $104 million (£63 million) in
a share placing with new and existing shareholders. The proceeds will fund
the development of its gas fields in Ukraine.
Cape: The energy services group said that it had received new and
renewed contracts in Qatar for up to $37 million (£22.5 million). The
company said that contracts include supplying work to Qatargas’s onshore and
offshore facilities for up to $22.5 million for the next three years.
Retailing
Waitrose: The supermarket said that sales last week were 10 per cent
higher than a year earlier after a nationwide advertising campaign boosted
its “essential” range. The trading improvement also reflected weather
conditions as branches reported strong sales of salads and other hot weather
lines. And Waitrose noted signs of improved consumer confidence, with
shoppers prepared to spend a little more on convenience formats.
George Davies: The designer who founded Next, Asda’s George and Marks &
Spencer’s Per Una range, is to return with a new venture in the Autumn. The
67-year-old, who left M&S last year, will launch GIVe in October with six
stand-alone stores and 20 concessions in independent department stores.
“It’s going to be affordable luxury”, Mr Davies said in a newspaper
interview.
Support
services
Whitehead Mann: One of the UK’s best-known headhunters has been bought
by a larger American rival. Less than two years after it was taken private
by Och-Ziff, the hedge fund group, the City headhunter has been bought by
Korn/Ferry International in a move that creates the leading executive search
firm in Britain and France. Whitehead Mann’s client roster includes 90 of
Europe’s top 200 companies.
Technology
Twitter: The social media company is struggling to craft a profitable
business model, but the web-based service has helped Dell to chalk up
millions of dollars in sales. Dell said that it had raked in more than $3
million (£1.8 million) from Twitterati who clicked through its posts to its
websites to make purchases.
Telecoms
CMT: Spain’s telecoms regulator said that 66 per cent of net new
broadband customers signed up with companies other than Telefónica, the
dominant operator, between February and April. The net number of new
broadband connections was 158,800 in the period. Within April, Telefónica
won only a 17 per cent slice of all new broadband connections to households
on a net basis.
Avanti Communication: The broadband satellite operator said that it had
been offered new projects funded by the European Space Agency (ESA). The
company, which has its headquarters in London, said that one of the projects
involved helping to develop the provision of satellite broadband services to
millions of users in rural parts of Europe who are unable to access reliable
broadband.
Transport
Aer Lingus: The Irish airline said that it would cut seat capacity on
its winter long-haul services by a quarter compared with 2008 in response to
low demand and significant losses in the first quarter. The company will cut
direct services from Dublin to Washington and San Francisco as well as
flights between Shannon and Chicago for the winter period.
Utilities
Scottish wind farm: A giant wind farm will generate orders worth more
than £200 million for companies in Scotland, Alex Salmond, the First
Minister, said. The 152-turbine farm to be built near Abingdon in
Lanarkshire will be the single biggest wind farm to have been given consent
in Europe. Mr Salmond hailed the potential for companies in Scotland when he
visited the site to see preparatory work.
