The government could sell its next batch of Lloyds Banking Group shares
as early as mid-February, the Sunday Telegraph said. The sale would be a book-build for institutional investors followed by a large offer to retail investors. Labour leader Ed Miliband's call for the breakup of Britain's biggest banks has accelerated sale plans for Lloyds, which announces annual results on February 13th. Moving as soon as possible on selling more shares would make Miliband's plan more difficult because it would create many more retail shareholders who would object to a breakup of the bank.
Tesco is considering a bid for Mothercare, the Sunday Times said. The supermarket giant looked at making a bid six months ago and could revive its interest after Mothercare's shares dropped following poor Christmas trading. Buying Mothercare would be part of Tesco's plan to breathe new life into its hypermarkets. Tesco has made no approach to Mothercare, the paper said.
Vodafone and BSkyB have discussed joint plans to thwart BT's expansion into broadband and sports broadcasting, according to the Sunday Times. The mobile and broadcasting companies have talked about "striking deals on Sky's sports and movie channels" and working together to on a high-speed broadband service. Sources told the paper the pair were unlikely to build a nationwide fibre network. The talks show how BT has wrong-footed its rivals by placing big bets on fibre broadband and the rights to broadcast top football matches.
Sandell Asset Management, a US activist investor, has quietly bought shares in Morrisons, the supermarket chain, the Sunday Times and Sunday Telegraph reported. Sandell's sub-3% stake is revealed as Morrisons faces increased demands to return cash to shareholders by selling parts of its property holdings. Sandell has not yet pushed for change at Morrisons, which suffered falling sales at Christmas. The fund is concentrating on its efforts to get FirstGroup to split off its US business.
Legal & General has called for the government to withdraw its Help to Buy scheme from London, where prices have reached "absurd" levels, the Sunday Telegraph reported. L&G boss Nigel Wilson said the support scheme for buyers seeking a mortgage "turbo-charges" the London market and that the government "should stop stoking demand". L&G has large interests in the UK housing market. Wilson said up to £1trn of equity was trapped in under used homes owned by retirees and freeing that money was a better way to boost supply.
The Bank of England (BoE) is likely to put an interest rate rise on hold until 2015 to protect fragile consumer confidence, the EY Item Club predicts. The Sunday Telegraph and other papers said Item expected unemployment to fall to 7%, the BoE's threshold for considering a rate rise, by the middle of 2014. But Item, one of the UK's most respected economics forecasters, predicts in its quarterly report that lack of real wage growth and business investment will prompt BoE policy-makers to keep rates on hold. It said when unemployment hits 7% the BoE should either reduce the threshold or make wage growth part of the calculation.
Energy companies are likely to increase charges to consumers in advance of Labour leader Ed Miliband's plan to freeze prices if elected next year, a report by a consultancy predicts. The Sunday Telegraph reported that Cornwall Energy predicted Miliband's plan would leave consumers worse off and threaten the viability of small suppliers. In a further blow to the credibility of Miliband's plan, Co-operative Energy, the only supplier to have shown any support for a price freeze, has called for social levies to be frozen too to prevent the price freeze causing losses.
Royal Bank of Scotland will regain more than $3bn of capital stranded in the US when it floats its Citizens business in the second half of 2014, the Sunday Telegraph said. RBS was forced to inject capital into Citizens during the crisis of 2007 and 2008. The business is overcapitalised but the US authorities would not let RBS claim back the capital, despite the shrinkage of its balance sheet. The flotation should see the money returned over the next two to three years, making it available to support lending in the UK.
The list of companies seeking to float on the stock market has grown to include food delivery website Just-Eat and easyHotel, the hotel chain owned by easyJet founder Sir Stelios Haji-Ioannou. The Sunday Telegraph said Just-Eat could be valued as high as £800m but appetite for growing tech companies could see that rise to £1bn. It has hired Goldman Sachs and JP Morgan to explore an initial public offering (IPO) for the first half of 2014. EasyHotel, which Haji-Ioannou launched in 2005, has begun talks with City firms including Numis about an IPO.
Legal & General plans to spend up to five billion pounds to fund five new towns across Britain, the Sunday Times reported. L&G thinks building new towns and regenerating inner cities is the best way to deal with Britain's lack of housing. The plan would also fit with L&G's desire for more pension fund money to be invested in infrastructure. Nigel Wilson, the Chief Executive of L&G, which is Britain's biggest pension fund manager, said: "If we can bring communities with us and agree planning, we'd like to help build several new towns across the country."
Imagine a country of generous social-welfare payments where those are not under attack, such a land exists just a few hundred miles north-east of Britain. The name of that place is Norway. Margaret Thatcher frittered away the spoils of the North Sea oil boom to fund short-term tax cuts and government spending. The Scandinavian country on the other hand created a sovereign wealth fund based on the tax wind-fall generated by its own oil boom. One rarely gets a second chance in life, but that may be what is on offer with the shale revolution - if the environmental concerns surrounding it in the UK prove unfounded. Mr.Cameron and his successors would not be easily forgiven should they squander such a chance, says the Financial Times.