Carillion plans to put Balfour Beatty in a "bear hug" to tempt Balfour's shareholders to support its attempted takeover, the Sunday Times said. Carillion last week scuppered a planned all-share merger when it backtracked on the agreed sale of Balfour's Parsons Brinckerhoff US design consultancy. With relations between the companies fraught, Carillion wants to tempt Balfour shareholders with a proposal to sell its private finance initiative infrastructure projects, raising the prospect of cash being released to shareholders.
WS Atkins is competing with Canadian rival WSP and two private equity firms to buy Parsons Brinckerhoff, Balfour Beatty's US consultancy arm, the Sunday Telegraph said. Goldman Sachs is leading the bidding process, which is at the second-round stage. Sources told the paper one of the trade buyers was a more likely winner than a buyout firm. But the sale may not be viable because Balfour relies too heavily on the business. The Takeover Panel is looking into comments made by Steve Marshall, Balfour's Chief Executive, about the company's prospects and investor support for his position.
Top investment banks are warning clients to prepare for a sell-off of shares
over the next few months because of rising market volatility and geopolitical tension, the Sunday Times said. Goldman Sachs last week recommended that clients reduce their equity holdings as it downgraded shares to neutral. Bank of America Merrill Lynch said junk bonds underperforming investment-grade debt was a sign that traders should not be "too greedy in equities in August". Uncertainty over the US economy and worries about the crises in Ukraine and Gaza have contributed to the shift in sentiment.
Lloyds Banking Group's Chief Executive has warned that rules under consideration by the Bank of England could force some lenders to increase mortgage borrowing costs, the Mail on Sunday reported. Antonio Horta-Osorio said Lloyds would benefit from tighter capital ratios that measure how much banks can lend. He said: "We have prepared our strategy to have a substantially higher leverage ratio. Given that the UK has at least three important players with a ratio at about 3%, the difference will mean a change of behaviour, with mortgages most affected." The paper said Co-op Bank, Nationwide Building Society and Barclays could be constrained.
Turnaround funds including Apollo are eyeing up Homebase as speculation mounts that Home Retail Group will sell the DIY chain, the Sunday Telegraph reported. Apollo, the US investment house, and OpCapita, which led the takeover of Comet, have begun working on purchase plans. Hilco, which bought HMV in 2011, and Endless, which has taken Kiddicare off Morrisons' hands, are also interested. The firms are considering their options after Home Retail's boss John Walden said he was mulling a full review of the company, whose main business is Argos.
The UK's big six energy groups have been deserted by 2m households who have left for cheaper suppliers, the Mail on Sunday reported. Industry figures shown to the paper showed more customers were leaving the big electricity providers since the end of last year because of rising household bills. More than 1.4m homes left the big suppliers, which include Centrica and SSE, by the end of last year, and a further 600,000 did the same in the first half of 2014. Energy UK, the industry lobby group, said the figures showed the market was functioning properly.
Prudential has been forced to make the first refund of a pension annuity and to apologise for blaming another company for wrongly selling the product, the Financial Times reported. Prudential last week withdrew "extremely misleading" comments it made to an MP that suggested Royal London, another insurer, was responsible for incorrectly selling a pension to a cancer sufferer. Mark Menzies MP was representing the purchaser of the policy. Royal London and Prudential have a sales partnership that will carry on, the paper said.
Almost a quarter of England's local councils could support a proposal to impose a "Tesco tax" on supermarkets whose proceeds would be used to reinvigorate local high streets, the Mail on Sunday said. The proposal was launched last week by 20 councils but campaigners said nearly 50 more had expressed an interest in the idea. Simon Danczuk, who heads Parliament's all-party small shops group, said that in principle he did not see a problem with the proposal.
RSA Insurance could cut hundreds of jobs in a cost-reduction plan by chief executive Stephen Hester, the Sunday Express reported. The insurer is expected to announce hundreds of millions of pounds of losses on the value of its assets when it posts interim results on 7 August. Hester took over the troubled group in February and has sold some businesses. A source close to the company told the paper: "Now its time to take the write offs and cuts. From this point on, the company will be clean."
Top executives at Afren, the oil explorer, were suspended because of their dealings with Oriental Energy Resources, the Sunday Times said. Afren announced on 31 July that chief executive Osman Shahenshah and chief operating officer Shahid Ullah were suspended because of "unauthorised payments" potentially for their benefit. Sources close to Afren told the paper the payments related to Afren's partnership with Oriental, its main partner in Nigeria. Oriental is owned by Mohammed Indimi, one of Africa's richest men. Oriental is not accused of any wrongdoing.
Hedge funds are betting against an imminent takeover of AstraZeneca by Pfizer, the US drugmaker that tried to buy Astra earlier this year, the Sunday Telegraph said. Elliott Advisers, Pentwater Capital and other typical merger arbitrage funds have reduced their stakes in Astra. Pfizer could return in August if Astra changed its mind about talks after Pfizer withdrew its takeover overtures in May.
Standard Chartered will post a 20% fall in first-half profit this week, raising further questions about its leadership, the Sunday Times said. The bank trailed the profit fall in a trading statement last month, adding to investor frustration with chief executive Peter Sands and chairman John Peace. The Sunday Telegraph said Sands was likely to point to an improved picture for the rest of the year. HSBC is expected to unveil a 10% fall in interim profit on 4 August but some prominent analysts are advising investors to buy the bank's shares because its high deposit base will benefit from rising interest rates, the Sunday Times said.
Standard Life is close to agreeing a £250m deal in India to take advantage of economic reforms, the Sunday Times said. Standard Life has held talks with its partner HDFC about increasing its stake in their Indian life insurance business to 36% from 26% ahead of the expected approval this week of a relaxation of foreign ownership rules for insurers. The joint business is likely to be floated with a value of about £2.5bn.
Betfair paid up to £60m of "illegal" dividends over three years, the Sunday Telegraph reported. In its annual report, the betting company revealed that it paid dividends in 2011, 2012 and 2013 when by law it did not have enough distributable reserves to do so. It also bought back 6.5m shares in the year ended April 2012 without having sufficient reserves to do so. Investors have been asked to let the company go to court to reduce its share capital "to regularise the situation". The company told the paper the oversight was a "minor technical point" with no impact on shareholders.
The former boss of Keydata is suing the City regulator for £371m over its decision in 2009 to put the investment firm into administration, the Sunday Times said. Stewart Ford, who founded the company, accuses the Financial Services Authority of a "politically motivated" abuse of power to show that the FSA was a tough regulator. The FSA said it had found debts and mis-selling liabilities the company could not pay.
A minority of Bank of England ratesetters could end the three-year consensus on borrowing costs by voting for an interest rate rise this week, the Sunday Times said, citing an economist. The strength of the UK economy will encourage Martin Weale and Ian McCafferty to vote for an increase, according to Ross Walker, an economist at Royal Bank of Scotland. He said weak wage inflation could persuade Weale and McCafferty to hold fire. The Monetary Policy Committee will announce its decision on 7 August with the vote revealed two weeks later.
The private equity owner of the Office shoe chain is planning to float it on the stock market with a target valuation of £300m, the Sunday Times said. Silverfleet Capital, which bought Office for £150m four years ago, is close to hiring JP Morgan to work on a listing next year.