Wednesday newspaper round-up: First Group, Nuclear Reactors, AG Barr
Wed 03 Oct 2012
LONDON (SHARECAST) - FirstGroup's contract to run the West Coast Mainline has been cancelled by the Government due to "significant technical flaws" in the bidding process, which will be re-run. Transport Secretary Patrick McLoughlin said that the flaws "stem from the way the level of risk in the bids was evaluated". "Mistakes were made in the way in which inflation and passenger numbers were taken into account, and how much money bidders were then asked to guarantee as a result." Virgin Trains, which lost out to First Group's £5.5bn bid, initially voiced fears that the amount its rival paid will have made the contract unprofitable. Mr McLoughlin has also ordered two independent reviews. One into what went wrong with the West Coast competition, and the second into the "wider rail franchise programme," The Telegraph says.
One of the favourite bidders for a multi-billion pound project to build a new generation of nuclear reactors in Britain has pulled out of the race. French engineering group Areva was expected to table a bid, along with the China Guangdong Nuclear Power Corporation, for the much-vaunted Horizon joint venture but did not make a final offer by a deadline on Friday, it was reported on Tuesday night. Areva and its Chinese partner were seen as one of the most credible bidders for the programme, which could see up to six nuclear reactors built in Britain. A spokesman for Areva refused to comment on the reports. The withdrawal of the Franco-Chinese consortium narrows the field down to a two-horse race between a group led by Hitachi of Japan and Westinghouse Electric, which is owned by Toshiba, The Telegraph reports.
Shareholders in Bumi, the mining venture brought to London by Nat Rothschild, have said they are not prepared to put more money into his venture unless it can achieve a total change in strategy. Nonetheless, they could be asked for more cash within months after Bumi Resources, the Jakarta-listed company in which Bumi plc owns a 29% stake, said that it was considering launching a rights issue to tackle its ballooning debt problems. Bumi Resources, which is at the centre of a corruption investigation launched by Bumi plc, said that it might need to tap shareholders if it could not raise enough by selling non-core assets. It needs to make a sizeable dent in a debt of more than $4bn that analysts say could bankrupt it. A source said that Bumi shareholders in London were “fed up” after losing 84% of their money since buying into Bumi’s float 14 months ago, The Times says.
Greece's international creditors are demanding the imposition of even tougher austerity measures despite the delivery this week of Antonio Samara’s hard-won €13.5bn package of cuts. On the second day of negotiations in Athens, the troika - officials representing the European Union, European Central Bank and International Monetary Fund - reportedly pushed for Greece to make deeper cuts to the minimum wage and pensions, while imposing longer working hours. Greece, which this week warned its economy was heading for a sixth year of recession, has asked Brussels to relax the terms of its bail-out conditions to allow the economy time to recover. The troika is reviewing Greece’s progress on austerity measures and its 2013 draft Budget to determine whether to approve the release of the next tranche of bail-out money worth €31bn, according to The Telegraph.
The two firms behind Robinsons Barley Water and Scotland’s Irn-Bru will today say the Takeover Panel has extended the deadline for them to hatch their £1.4bn merger, the Daily Mail can reveal Glasgow-based AG Barr and Britvic requested more time for their accountants to authenticate the savings the tie-up would generate, and also agree on a name for the newly-combined firm. The regulator had given them until 5pm today to clinch a deal but it is now understood to have extended this by three weeks. It appears that while the pair had already managed to agree the make-up of the new board ahead of confirming they were in merger talks, they have not found consensus on a name. The two options being considered are Barr Britvic and Britvic Barr however neither party is willing to give ground.
Google has unexpectedly dropped the first patent lawsuit it launched against Apple after the search giant’s $12bn acquisition of Motorola Mobility in May. In August, Google’s Motorola Mobility unit filed a complaint with the International Trade Commission, a US body, claiming that many of Apple’s iPhones, iPads and Mac computers infringed seven of its patents for technologies such as messaging, voice commands and multimedia. Two weeks ago, the ITC voted to investigate Motorola’s claims against Apple. However, in a filing to the ITC on Monday, Google said it wished to “terminate all claims” in the case, which was expected to take at least another year to resolve, The Financial Times writes.
More than 15,000 people looking for work queued to apply for just 150 vacancies at the factory of agricultural machinery company John Deere on the outskirts of Madrid. As data showed unemployment across Spain has risen by 11% over the past year, the applicants had no idea what positions they were applying for or what wages to expect, just that there was the possibility of a regular job. "The truth is I have no idea what the job is, beyond that it is at a factory," one 23-year-old applicant was reported as saying. Employment agency Adecco in the Getafe district of Madrid, which advertised the job, said it had seen more than 15,000 jobseekers in the week before the application closing date of Monday. Overwhelmed by the huge response, the agency said it will hold a draw of those who applied to narrow the list to 1,500 before considering suitable applicants for the positions, The Telegraph explains.