BSkyB is putting the final touches to a plan to buy its sister companies in Italy and Germany and will announce the takeovers in the next two weeks, the Sunday Times reported. The deals will boost Rupert Murdoch's effort to buy Time Warner in the US because BSkyB will pay more than €8bn for stakes in Sky Italia and Sky Deutschland held by Murdoch's 21st Century Fox. Murdoch also owns 39% of BSkyB, whose Chief Executive, Jeremy Darroch, is close to agreeing a price for the two European businesses. The deal will turn BSkyB into a pan-European pay-TV giant.
The Serious Fraud Office (SFO) will announce in the next few days a criminal inquiry into the alleged rigging of foreign exchange
markets by traders at big banks, according to the Sunday Times. The SFO's intervention is the first criminal probe into the alleged rigging, which is being investigated by regulators around the world. The foreign exchange probe grew out of increased attention paid to financial benchmarks after banks were found to have manipulated the Libor market. London is home to about 40% of foreign exchange trading, making the SFO inquiry a blow to the City.
GlaxoSmithKline's Chief Executive Andrew Witty faces further pressure this week when the company posts a sharp decline in quarterly profits, the Sunday Times said. Earnings at Britain's biggest drug maker are predicted to fall mainly because of the strong pound. UBS analysts said last week that the consensus profit forecast looked "increasingly outdated". Witty is already under pressure over a bribery scandal in China and is likely to face questions about the matter when it reports second-quarter figures. UBS also raised concerns about the slow pace of respiratory drug launches.
Anglo American will reveal a plan on July 21st to sell off its oldest South African platinum mines, the Sunday Times said. The announcement will show that Chief Executive Mark Cutifani is ready to break taboos to overhaul the mining company. The platinum operation is the world's biggest producer of metal and employs more than 40,000 people. The shafts in question are the oldest and are the subject of labour unrest. Cutifani took the helm at Anglo last year and vowed either to invest in assets or sell them.
Scotland will be as financially vulnerable as Greece if it votes for independence unless it gets rid of its banks, has its own currency and cuts public spending, a report by Fathom Consulting said. The Sunday Times reported that Fathom found an independent currency was needed because of the "asymmetry" of the Scottish economy in the event of an oil price
shock. In that event it would need its currency to fall when oil prices
are weak and vice versa. Without control of monetary policy and a smaller banking sector, which is currently 11 times GDP, Scotland could find it impossible to borrow, the report said.
Debenhams has interviewed Mothercare's Finance Director to be its finance chief, the Sunday Times said. Matthew Smith is one of the candidates in the running to fill the vacant finance director's job at Debenhams. Losing Smith, who joined Mothercare last year, would be a big blow to the mother and baby chain's efforts to turn round its loss making UK stores and thwart a takeover approach from Destination Maternity of the US. Another contender for the Debenhams job is Alastair Miller, the former numbers man at New Look, the fashion chain.
Pearson is expected to report a fall of more than 70% in its pre-tax profits for the first half, the Sunday Times said. The education publisher and Financial Times owner is battling several problems at its US business, where falling student numbers and a troubled roll out of nationwide exams have hit sales. Merging Penguin with Random House and selling Mergermarket, the financial news service, are also expected to hit first-half figures announced on July 25th.
The UK economy is still "fragile" and vulnerable to shocks, former Chancellor of the Exchequer Ken Clarke told the Observer. The recovery is not based enough on manufacturing, productivity is low and Britain remains in a "ludicrous" cycle of boom and bust in the housing market, Clarke said. The veteran Conservative politician left the government in last week's reshuffle after serving in the cabinet since the 2010 election.
Britain's economy will hit a "sweet spot" this year with business investment taking the pressure off consumer spending to support growth, the EY ITEM Club will predict this week. The Sunday Telegraph said ITEM would upgrade its prediction for this year's growth rate by 0.2 percentage point to 3.1%. The strong labour market will increase incomes through employment rather than wage increases, keeping inflation low, ITEM predicted.
Argos plans to start a same-day delivery service to take on Amazon, the Sunday Telegraph said. The chain, owned by Home Retail, will trial the service later this year, allowing shoppers to order online and either have the goods delivered to their home or a local store that day.
A quarter of mortgages could become unaffordable when the Bank of England starts increasing interest rates, a report by the Resolution Foundation will say this week. The Sunday Telegraph said the think tank called for regulators to demand that lenders offer financial advice to at-risk borrowers to help them prepare. The report found one in five mortgage borrowers are already in difficulty and that two million borrowers were at risk when rates start to rise because they have debts that are large compared with the value of their property or their income.
The private equity owners of Birds Eye and United Biscuits are is considering floating the businesses this year, the Sunday Telegraph reported. United, whose brands include Jaffa Cakes and Mini Cheddars, is likely to come first. A listing is the favoured option of owners Blackstone and PAI Partners but United might also be sold privately for about £1.5bn. Birds Eye's owner, Permira is in the early stages of considering a float that could value Europe's biggest frozen food at between £2bn and £2.5bn.
McCarthy & Stone is considering an autumn refinancing that could lead to Britain's biggest retirement home builder rejoining the stock market in the first half of next year, the Sunday Times reported. The business, owned by hedge funds, will appoint an adviser in the next few weeks to help it deal with £92m of outstanding debt. Its big debts left it vulnerable to the financial crisis after a misjudged deal to take it off the stock market in 2006.
The UK should set up an independent body to assess the country's infrastructure needs, a group of business leaders has said, according to the Sunday Telegraph. EEF, which represents manufacturers, the British Chambers of Commerce, the TUC and the Airport Operators Association said such a body could shorten decision making and help take short-term politics out of decisions on projects such as a new runway for South East England and power station construction.