Cyprus chaos
Bailout makes waves
The proposed Cypriot bail-out has had repercussions throughout the eurozone and beyond as concerns that the plan imposed on the island economy by the European Union, International Monetary Fund and European Central Bank could become a blue print for bail-outs in other compromised eurozone periphery countries. The idea of taxing savers, even above the €100,000 (£84,854) deposit limit, has sent jitters through the European banks and is likely to cause consternation in countries with similarly large deposit bases. Meanwhile, Russia, whose citizens have huge sums deposited in Cypriot banks, has also waded into the situation, criticising the severity of the bail-out terms.
Dell deal not done
Rival offers
Computer hardware giant Dell could become the subject of a three-way battle for ownership after the $24.4bn (£16bn) offer tabled by founder Michael Dell and his private-equity backers was rivalled by bids from Blackstone and Wall Street financier Carl Icahn. Blackstone is offering $14.25 a share for the whole company while Mr Icahn has tabled a bid of $15 a share for 58 per cent of the business, both of which potentially trump Mr Dell's $13.65 share. At present, Mr Dell's bid is still in pole position as it is the only formal offer but the indications of interest from other parties raises the possibility of a bidding war unless Mr Dell can forge a deal with one of his rivals.
City combination
Schroders buys Cazenove
Two of the City of London's most blue-blooded investment banks look set to merge after Schroders agreed a deal to buy rival Cazenove Capital with a bid worth £424m. The deal would see Schroders add substantially to its private banking capabilities and would add £17.2bn of assets under management on top of the £200bn-plus Schroders already manages. Cazenove's investment bank will continue to trade under its long-standing name but the asset management arms of the two businesses have significant overlaps and Schroders believes it can cut costs through the combination of the two businesses through infrastructure and distribution savings of £12m-£15m a year.
Franchise revived
East Coast up for grabs
The UK government has announced plans to return the East Coast main line rail franchise to private hands, three years after it was taken back into public ownership when National Express said it could no longer afford to pay the government fees for running the line. Rail operators are invited to tender to take on the line from the end of 2014 as the government tries to breathe fresh life into the rail franchising process after last year's West Coast fiasco put a number of franchise tenders on hold. Meanwhile, the West Coast mainline franchise, still being run by Virgin Trains, looks like being 'temporarily' extended out to 2015, beyond the date of the next general election with a number of other franchise tenders pushed out over the coming years.
Housing hope
Prices up
The housing market in the UK appears to be regaining some semblance of health even before the government's big push to boost the sector in last week's Budget kicks in. The latest Hometrack survey, for March, showed a rise of 0.3 per cent in house prices across the country, which represents the most healthy monthly rise in three years. House prices in the capital continue to forge ahead of the wider market, rising by 0.7 per cent in February. Estate agents have reported an uptick in activity and, with bank lending easing and further government initiatives on top of the Funding for Lending scheme coming down the track, some glimmers of optimism are returning.
Bank rules relaxed
Requirements eased
The rules for creating a new bank in the UK are to be relaxed according to new guidelines from the Financial Services Authority. Rules aimed at increasing competition among high street banks by making it easier for new entrants will require new banks to hold capital equivalent to 4.5 per cent of their assets, the minimum requirements under Basle III requirements. Potential new entrants will also be given an answer on their applications within six months. A two-speed system will also be introduced to serve banks who are already close to being ready and other applicants who need more hand-holding through the process. The Prudential Regulation Authority takes over the regulation of banks from the FSA next week.
