LONDON (SHARECAST) - Nationwide is considering a takeover bid for the 316 bank branches that have been put back up for sale by Royal Bank of Scotland. Britain’s biggest building society is mulling a possible offer following the collapse of a £1.65bn deal to sell the network to Santander UK. RBS, which has to dispose of the business by the end of next year to avoid a fine from the European commission, is scrambling to resurrect the sale at a knockdown price. Virgin Money, Sir Richard Branson’s banking business, has already expressed an interest in the business. So has JC Flowers, the American private equity firm that has started to dabble in Britain’s banking industry, The Sunday Times holds.
Amazon has considered weighing up a bid for Asos as it tries to replicate its success in the books and technology industries in fashion. Insiders say the online clothes retailer has sparked the particular interest of Amazon founder Jeff Bezos, after he met its founder Nick Robertson in Seattle. It is not known whether Amazon is still looking at Asos, a British firm, but sources have told The Sunday Telegraph that it looked at Asos’s books earlier this year. Earlier this month Amazon’s former UK chief executive, Brian McBride, joined Asos as chairman. The listed fashion retailer started in 2000, selling copies of clothes worn by celebrities and quickly expanded to become one of the UK’s biggest clothes firms.
Directors at BP have approved a radical $27bn (£17bn) plan to sell its troublesome Russian operation and forge a deep new alliance with the Kremlin. The British oil major will off-load its lucrative but problematic TNK-BP operation in return for cash and shares in Rosneft, the state oil giant run by Igor Sechin, Vladimir Putin’s right-hand man. The board approved the deal on Friday afternoon at BP’s St James’s Square headquarters in central London. Subject to final negotiations, the FTSE 100 company will receive $11bn to $13bn in cash, a 16%-20% stake in Rosneft and two board seats at the Kremlin-controlled group. The details could be announced as early as tomorrow, but sources cautioned that negotiations might take several days, The Sunday Times says.
Investors are calling for a leadership coup at Man Group, the giant hedge fund operation that revealed last week it had haemorrhaged another $2.2bn (£1.4bn) of clients’ money. Several of Man Group’s leading investors want to see Peter Clarke, chief executive, replaced by Manny Roman, its chief operating officer. Roman, a former Goldman Sachs banker, previously ran GLG, the Mayfair-based fund that sold out to Man two years ago in a deal that has proven unpopular with investors. Shares in Man fell 10% in one day last week when the company reported its fifth successive quarter of net outflows. Clients withdrew a total of $5.2bn from Man’s products in the three months to the end of September. After new sales were taken into account, its flows fell by $2.2bn. Overall funds under management grew 14% to $60bn owing to the takeover of FRM, a fund of hedge funds business, The Sunday Times explains.
Dart International, which has 44 unconventional gas assets and prospects from the UK to China, including a coal bed methane project in Scotland, last week finished an investor roadshow that took in the UK, Europe and Asia. The company is thought to be confident of exceeding its £30m minimum target and raising closer to £40m from the initial public offering. The funds will be used to help boost production. Dart Energy originally intended to float the business in Singapore but abandoned those plans because of market conditions. The Aim listing is expected to be completed next month. The group, which also explores for shale gas, said last month that, within a year and a half of its London listing, at least four of its projects in Europe and Asia should be generating revenues, The Sunday Telegraph says.
It has been inevitable that one partner would quit TNK-BP since January 2011, when BP attempted to strike a deal to explore for Arctic oil directly with Rosneft, breaking an agreement that it would do all its Russian oil business through TNK-BP. The sum on offer to BP is substantial. Analysts had put a price tag of between $20bn and $25bn on it. And now would not be a bad time to head for the exit. BP paid $8bn for the stake in 2003, earned more than $19bn in dividends and would trouser $28bn. Although TNK-BP contributed nearly a third of BP’s oil-and-gas output and 10% of its profits, prospects for growth are limited in almost every way—except in the amount of time the company’s top brass has had to devote to managing it. The latest dividend of $3.7bn was probably a high point. BP may need the money to help pay for the Deepwater Horizon oil spill. It has already paid out billions and rumours suggest that a settlement of a court case with the American government is coming soon that would resolve most liabilities. That could set BP back $20bn or more, The Economist explains.
Mr Cable, the Secretary of State for Business, Innovation and Skills, is poised to call for better risk management of computer trading as the result of a high-level report into high frequency trading. So-called “black box” trading has in recent years been blamed for wild swings in equity prices, and in the summer of 2011 was blamed for wiping more than £300bn off the value of British shares over the course of six weeks. Sir John Beddington’s report, “The Future of Computer Trading in Financial Markets” is to be published tomorrow and will find that there are regulatory holes as a result of the fast-moving nature of the financial technology industry. It is understood the report will call for those loopholes to be closed, in order to protect financial markets and investors from computerised trading, according to The Sunday Telegraph.
David Cameron targeted high-earning Eurocrats yesterday as he vowed to block a new budget for the European Union that failed to squeeze spending in Brussels. The Prime Minister left the European summit having made potentially significant gains in protecting the City from new Eurozone rules for banking union and shared budgets. He also delivered a passionate defence of Britain’s role at the heart of Europe. But he drew sharp battlelines for the next showdown in November when the 27 leaders will try to fix an EU budget for the next seven years. “The British public expect a tough approach, a rigorous approach,” he said. “If there isn’t a deal available there won’t be a deal,” The Sunday Times reports.
Britain's double-dip recession is over, figures will show on Thursday. The economy seems certain to have returned to growth in the third quarter of this year after nine months of falling output. Olympic ticket sales and a bounce-back from the effects of the Jubilee Bank Holiday and the terrible weather in the second quarter mean that, barring the biggest upset in recent economic history, there will be a plus sign in front. But there is no guarantee that the economy will not slip back into negative territory in the final quarter, and for 2012 as a whole the economy is expected to have shrunk by about 0.2%, The Financial mail on Sunday says.
Third quarter profit warnings from UK listed companies returned to levels last seen in the dark days of 2008 this year as the weakening economy, combined with one of the wettest summers on record, forced firms to cut their cloth accordingly. The latest profit warnings report from accountancy firm Ernst & Young, released today, shows 68 warnings were issued between July and September. The report noted that the quarter also saw the highest number of companies citing adverse weather conditions as a factor in warnings since the winter freeze of 2010-11. But many of those same companies had issued previous warnings, identifying weak UK demand, a slowdown in global markets and growing uncertainty in the economic outlook as more pressing concerns. Across the UK, the support services category in the FTSE listings was the worst affected, with 15 warnings. The recruitment and training sub-group alone issued four warnings during the period – its highest number in three years. This, Ernst & Young says, is a sign that more companies are preparing for leaner times ahead, The Scotsman on Sunday writes.
European Central Bank policymaker Klaas Knot has thrown his support behind German finance minister Wolfgang Schaeuble's call for a Eurozone commissioner with power over European Union nations' budgets. The EU needs not only stricter budget discipline but also stronger debt controls, Mr Knot, who heads the Dutch Central Bank, told German newspaper Welt am Sonntag in an interview published on Sunday. "I welcome the idea ... if we can manage to keep a better eye on these aims it would represent huge progress. It is worth thinking about Wolfgang Schaeuble's idea carefully." Asked about ECB plans to buy the bonds of troubled euro zone states and whether this risked easing the pressure on governments to implement reforms, Mr Knot said the bank had learned lessons from its last bond-buying programme. "We are prepared to play the fire brigade in the short term, but only when we are convinced that the new house will be constructed more solidly," he said, The Sunday Telegraph reports.
Tesco Bank and First Direct led the way yesterday as homeowners were boosted by a flurry of mortgage rate cuts – although the cheap deals are on offer only to those with large deposits. The supermarket giant’s banking arm launched the cheapest mortgage in the UK by slashing one of its two-year fixed-rate deals to just 1.99%. The mortgage market newcomer has cut the cost of all its two-year fixed-rates at 60% and 70% loan-to-value (LTV). However the 1.99% mortgage, which has a fee of £995, is available only to those with a deposit or equity of 40%. HSBC-owned First Direct also unveiled cheaper mortgages yesterday. It launched a new five-year fixed mortgage with an interest rate of just 2.99%, albeit with a booking fee of £1,999 and with a minimum deposit of 35%, The Scotsman on Sunday says.