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SEVEN DAYS

Our take on the biggest business stories of the past week
August 20, 2014

Third time unlucky for Carillion

British construction firm Carillion (CLLN) upped its proposed merger offer for engineering rival Balfour Beatty (BBY) for a third time - but to no avail. The brand new approach valued Balfour at £2.1bn. Under the new offer, Balfour shareholders would have held 58.3 per cent of the combined entity. They would also get a cash dividend of 8.5p per share. The sweetened offer came after discussions with Balfour's biggest shareholders over the past week. Negotiations with Balfour's board ended last month after the two sides clashed over the sale of Balfour's US engineering and design business, Parsons Brinckerhoff. Following the rejection, the Carillion board has now pulled the offer.

Default position

Argy bargy

Argentina's president Cristina Fernandez has unveiled a legislation designed to push bondholders to swap defaulted debt for new notes governed by Argentine law, a move aimed at bypassing a US ruling that prevented Argentina from paying its creditors. The country lurched into default again last month after a New York court blocked an interest payment of $539m owed to holders of debt issued under US legislation that was put in place after the country's record 2002 default.

Brewers droop

Probably the best sanctions...

The economic sanctions on Russia have begun to bite - at least for the brewers. Danish brewing giant Carlsberg said that operating profits would come up short from last year due to deteriorating conditions in Russia, which generates over a third of its profits. However, not all Carlsberg's problems are linked to the fall-out from the Ukraine crisis. The Russian government has been tightening regulation of beer and spirits to curb alcoholism and binge drinking - good luck with that one.

English dissenter's

A cut above

It has emerged that two of the Bank of England (BoE) policymakers dissented over interest rates for the first time in three years, after they voted to tighten policy. The news will reignite the debate about whether the state of the UK economy warrants a rate rise by the end of 2014. Former academic Martin Weale and economist Ian McCafferty both voted to raise interest rates to 0.75 per cent from the current 0.5 per cent, according to minutes released from a BoE's Monetary Policy Committee's meeting held earlier this month. Sterling rebounded and gilts fell as expectations for an early rise in UK interest rates were revived.

A question of antitrust

Not so inscrutable

Chinese regulators have fined at least two Japanese makers of automotive bearings for violating antitrust laws, as Beijing intensifies its scrutiny of business practices in the auto sector. One of the bearing makers, NSK, said the regulator had fined it 175m renminbi, or £17.1m, over unspecified violations of China's antitrust law. Government investigators in China have also found the Mercedes-Benz unit of Daimler, the German automaker, in violation of antitrust price rules

Salmond on the hook

Breaking up is hard to do

SNP leader Alex Salmond is trying to allay currency fears ahead of the Scottish independence vote, but all is not going smoothly. His latest assertion that keeping the pound without the Bank of England's support would only be a stopgap has been met by derision. Scotland's first minister said a viable "transition option" was Scotland continuing to use sterling even if the UK parties continue to reject a formal currency union. Mr Salmond has so far failed to outline which of the two long-term options - the euro or a new currency - Scotland would move to after the supposed transition period.

Jobs lot

Apple on the up

Good news for Apple shareholders as shares in the tech giant closed at a record high earlier this week, giving rise to expectations that the technology company's best days are still to come. The share price surge comes after a challenging period for the iPhone maker, in which its share price dropped below $60 as concerns mounted that the company had lost some of its way following the death of founder Steve Jobs in 2011. The truth is that most of the high-end smartphone manufacturers have been forced to re-assess their business models in the light of new low-cost alternatives. For many people - at least the sane - the novelty has long since worn off.