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Monday's news and tips

Created:

13 October 2008

Written by:

Tanya Malick

■ No cash bonuses in 2008 and a say on dividend policy are part of the government's requirements in return for its £37bn cash injection into three of Britain's best-known high street banks.

■ Outsourcing giant Capita Group has paid £13.6m, net of cash acquired, for IP based business networking solutions firm ABS Network Solutions.

■ Barclays has unveiled plans to raise £6.5bn from shareholders and other investors without the need of government help, with a further £3.5bn to come from a dividend cut and other sources.

■ Financially troubled drug firm Vernalis said it has achieved the first milestone in their three-year oncology drug discovery collaboration initiated in May 2007.

■ Defence and security firm QinetiQ is to acquire tender assessment and management software group Commerce Decisions for a total of £9.85m.

■ Turbulent markets have convinced Lloyds TSB to revise down the terms of its offer for rival HBOS and raise £5.5bn of new capital, with HBOS raising a further £11.5bn.

■ Oil and gas explorer Gold Oil has brought its interest in the Z34 gas project off the coast of Peru to 100% with the purchase of Plectrum Petroleum.

Continues below...

■ Hovis bread and Branston pickle group Premier Foods has confirmed speculation in the press that it is looking at ways of speeding up the reduction of group debt.

■ Utility billing services group Spice has completed the acquisition of Morrel Consulting, a provider of specialist consultancy services to the water industry.

■ Clinton Cards plunged into a full year loss as the greetings card retailer announced an impairment charge of £30m related to its Birthdays business.

■ Car components group Wagon suspended its shares this morning as it revealed talks are underway about its financial position after a slide in sales.

■ Unexpected costs related to investment in its businesses caused a fall in pre-tax profits at YouGov and prompted the pollster and market research firm to implement cost control measures.

■ Contractor Costain said it continues to perform in-line with company expectations following the strong first half of 2008.

■ Data management specialist SDL said it continues to see solid trading across most of its global markets while demand from its IT, automotive and other sectors remains robust.

■ Strong demand from the oil, gas, mining and shipping sectors sent revenues soaring at maintenance and repair specialist Castle Support Services, which left the group with a strong outlook for the coming year.

■ Aim traded mobile phone gambling outfit Probability said net gaming revenue increased 10% from the previous quarter to £1.37m.

■ Copper, zinc and lead miner Anglesey Mining has ceased negotiations with Australian firm Western Metals over the sale of Parys Mountain, Anglesey's base metal project in North Wales.

FOR A SUMMARY OF LATEST MOVEMENTS IN EQUITY, COMMODITY AND CURRENCY MARKETS, SEE FT.COM'S MARKETS PAGE.

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NEWSPAPER SHARE TIPS (12 OCTOBER 2008)

Full round-up of newspaper share tips (sourced from Sharecast)

PRESS SUMMARY:

The Chancellor will move to take control of the Royal Bank of Scotland today by injecting £20bn of taxpayers' money. The Government is also expected to take over HBOS in the most dramatic extension of state ownership in the British economy since the war. The bank's rescue takeover by Lloyds TSB appeared to be on the brink of collapse last night, writes the Times.

Sir Fred Goodwin, chief executive of Royal Bank of Scotland, will today pay the ultimate professional price for the Super Monday bail out of British banks by agreeing to leave the company 10 years after joining. Stephen Henter, who left the banking industry in 2004 to take the helm at property company British Land, is expected to replace him. Last night the immediate future of Andy Hornby, chief executive of HBOS, also looked uncertain, according to the Telegraph.

Eurozone leaders have agreed on an emergency package to guarantee financial debt for five years and take a direct stake in banks if necessary to "avoid any failure of systemically relevant institutions". The fifteen states will also prop up the interbank markets to kick-start lending, reports the Telegraph.

EDF is to consider the sale of British Energy's sole coal-fired power station to clear competition hurdles. The French energy company is understood to be confident that regulators in Brussels will approve the proposed £12.4 billion takeover of British Energy quickly without recourse to a lengthy Phase II inquiry, which could drag on until next spring, according to the Times.

Mitsubishi UFJ, the Japanese banking giant that had planned to sink $9 billion (£5.3 billion) into Morgan Stanley on Monday, is understood to have begun an eleventh-hour internal review of the deal and may seek to renegotiate some of the terms, the Times reports.

The Australian government is guaranteeing all deposits with financial institutions over the next three years after earlier indicating it would limit the support for bank deposits to $A20,000 (£8,064), reports the Telegraph.

The ownership of BG Group's biggest oil and gas asset is under discussion as KazMunaiGaz, the state energy company of Kazakhstan, seeks a share in Karachaganak, a gas and condensate field that accounts for almost a fifth of the British company's oil and gas output, writes the Times.

TUI has sold its Hapag-Lloyd shipping subsidiary in a €4.45bn (£3.5bn) deal that will keep the company in German hands and see the tourism group retain an interest through a minority stake in the buyer. A consortium of Hamburg businessmen, won the race to acquire Hapag-Lloyd after Singapore's Neptune Orient Lines dropped out of the auction at the end of last week, reports the Financial Times.

The City of London will lose 62,000 jobs by the end of 2009, wiping out all the growth of the last 10 years, a firm of economic consultants predicts. Employment in London's financial district will fall by 28,000 this year, with a further 34,000 to go in 2009 as a result of the credit crunch, the Centre for Economics and Business Research (CEBR) said, according to the Independent.

Iceland's prime minister launched a blistering attack on the government on Sunday night for "bullying a small neighbour", and said his country might sue the UK over its reaction to Iceland's banking crisis, reports the Financial Times. Geir Haarde told the newspaper that the government's move last week to put part of Icelandic bank Kaupthing's UK operations into administration "led to the collapse" of the parent bank.

The biggest companies in the US car industry, brought to the edge of bankruptcy by the economic turmoil, are considering extraordinary new plans to save themselves, including mergers that could throw tens of thousands of workers out of their jobs. General Motors, the largest US car manufacturer, has talked in recent weeks with rivals Ford and Chrysler about combining forces with one or other of them, in the hope of finding the massive new cost savings that are required to make up for plunging sales, writes the Independent.

Confidence among management at Britain's biggest companies has slumped as the financial crisis threatens the wider economy, putting employment and capital investment at risk. Optimism about the financial outlook among finance directors fell in the third quarter of this year at the fastest rate since the financial crisis began, a survey by Deloitte, the accountancy firm, found, the Independent reports.

The biggest ever sale of oil assets will take place today, when the Iraqi government puts 40bn barrels of recoverable reserves up for offer in London. BP, Shell and ExxonMobil are all expected to attend a meeting at the Park Lane Hotel in Mayfair with the Iraqi oil minister, Hussein al-Shahristani, reports the Guardian.

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