Pfizer is weighing up a last-minute improvement to its indicative offer for AstraZeneca, the Sunday Times said. Pfizer is expected to increase the cash portion of its offer and could also increase the price per share before the May 26th deadline to secure a deal. It is also in talks with the Government about doubling its commitment to UK research to 10 years. The Government is in early talks with the European Commission about widening Britain's public interest test for takeovers.
Pfizer is putting the final touches to an improved offer for AstraZeneca that is expected to value the UK company at £67bn, the Mail on Sunday reported. The US company is expected to act before the May 26th deadline to secure a deal by offering £53 a share to lure AstraZeneca's management to the negotiating table. Some observers have said Pfizer could offer up to £55 a share, the paper said.
If the Government tried to apply a public interest test to Pfizer's proposed takeover of AstraZeneca it would run up against European Commission rules, the Sunday Telegraph said. "Any political attempt to influence an EC merger review will be rejected out of hand," Romano Subiotto at law firm Cleary Gottlieb Steen & Hamilton told the paper. Labour and some MPs from within the coalition parties have put pressure on the Government to test whether a Pfizer takeover would be in the public interest.
Mark Carney has said the UK housing market is the biggest risk to economic recovery, the Sunday Times reported. The Bank of England Governor said he was concerned that the value of mortgage loans to property values was "creeping up" and signalled that the BoE would seek to rein in lending this year. In an interview due to be broadcast on Sky, he said: "The biggest risk to financial stability, and therefore to the durability of the expansion, those risks centre in the housing market and that's why we are focused on that."
Marks & Spencer will try to win over investors by indicating a new focus on shareholder returns and profit margins, the Sunday Telegraph said. At its annual results on May 20th the retailer will suggest that the board will discuss a big dividend increase or share buybacks after Chief Executive Marc Bolland three-year turnaround plan ended. The plan has cost about £2.3bn with no improvement so far in profit. The end of the investment spending will free cash that can be distributed to shareholders. The group also wants to increase clothing profit margins along with the quality of its goods.
Lloyds Banking Group is getting ready for a loss of up to £500m when it floats TSB on the stock market. The Sunday Times said early conversations with potential investors suggest that Lloyd could be forced to sell the bank at a bargain price. It may have to list the first 25% at less than its book value, triggering a big write off. Lloyds has been forced to sell the business, which will be an independent "challenger bank", by the European Union.
A jump in profits at Royal Mail is expected to rekindle the argument over whether the government secured good value for taxpayers when it privatised the company, the Sunday Telegraph reported. Royal Mail's first full-year results as a public company will show a 12% increase in operating profit which traders said would confirm its market value at about 70% more than the government's 330p a share government sale price. Panmure Gordon analyst Gert Zonneveld said: "The market has made up its mind that the company is worth 570p a share."
The European Central Bank is ready to launch a €200bn stimulus programme in June to ward off Japanese-style deflation, the Sunday Times said. The ECB's measures will include negative deposit rates and measures to boost lending to smaller companies. Last week's disappointing growth figures for the Eurozone rallied support for intervention. There are also concerns about the state of the bloc's banks ahead of a new stress test on capital strength.
Chancelllor George Osborne is expected to get two pieces of good news as the economy grows faster than previously thought and Government borrowing falls, the Sunday Express said. Economists think the Office for National Statistics will upgrade the official estimate of first-quarter growth up to 0.9% from 0.8%. Economic growth and rising tax receipts should also have cut government borrowing in the first month of the financial year.
Walgreens, the US drugstore giant, is considering a £10.5bn bid for Alliance Boots, the Sunday Times said. If the deal happened, Walgreens would move its tax base to the UK or Switzerland. It is mulling the idea under pressure from US hedge funds that want Walgreens to take advantage of Boots' 20% tax rate compared with the 37.5% it pays in the US. The proposal follows Pfizer's approach for AstraZeneca, which is also partly driven by tax considerations.
Zoopla is ready to launch a £1bn flotation that will trigger a windfall for Daily Mail and General Trust (DMGT), which owns 51% of the property website, the Sunday Times reported. Zoopla is likely to announce its initial public offering on May 22nd. DMGT will sell a substantial number of shares
but wants to stay Zoopla's biggest investor.
Glencore Xstrata faces shareholder unrest at its annual meeting over accusations that the company fails to match UK accounting standards, the Sunday Telegraph reported. Shareholder groups including Pirc have advised investors to vote against a resolution that scraps the requirement to publish accounts in line with UK rules, opting instead for less clear Swiss standards.
The brothers who founded budget retailer B&M are due to make £2bn when the cut-price store group joins the stock market, the Sunday Times said. The Arora brothers will reveal their plans to go public this week in a flotation valuing the company at about £2.5bn. They have a 40% stake and have already made £1bn from selling the other 60% to private equity firm Clayton, Dubilier & Rice.
The Co-operative Group has voted in favour of governance reforms that will replace its current board with experienced business people, the Sunday Times and other papers reported. The watered-down version of changes proposed by Lord Myners to stem chaos at the mutually owned group were passed unanimously at its annual meeting.
Barclays is negotiating with Waitrose about a deal that could let shoppers do their banking in stores, the Sunday Times said. Waitrose, part of the John Lewis, is one of the only major retailers not to have launched its own bank or to have linked up with another high street lender.
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