Lloyds Banking Group is planning to begin the sale of its TSB division in mid-May despite recent market ructions, the Sunday Telegraph said. The initial public offering would see TSB listed on the stock exchange by the end of May. Some investors are questioning the value of 1.5bn to 2bn pounds placed on TSB. If the price is too low for Lloyds's liking the bank may sell 30 per cent instead of the mooted 50 per cent. Lloyds was ordered to sell more than 600 branches, named TSB after the bank it bought in the 1990s, by the European Commission after the UK Government bailed out the bank.
Investors that bought shares
of Lloyds Banking Group from the Government are threatening to shun future offerings after the Financial Conduct Authority sent financial shares tumbling with a botched insurance review announcement, the Financial Times reported. Some investors have complained to Lloyds and UK Financial Investments about bad treatment by the Government. Someone close to Lloyds said: "Investors are asking if the Government is an honest seller." The FCA briefed the press on its insurance review three days after investors bought shares in Lloyds and after the Treasury had seen its business plan, which did not go as far as the press briefing implied.
Rio Tinto is leading the pack of bidders in line to buy a stake in one of the world's biggest iron ore deposits, according to the Sunday Times. The stake in the Simandou deposit is likely to be offered to international miners after the Guinean Government decided that Israeli miner BSRG was guilty of "corrupt practices". BSGR denies wrongdoing. Rio owns the half of the concession already after the other half was taken away by the Guinea Government in 2008. Rio's Chief Executive Sam Walsh has already said the rights "could be attractive to us".
Leading Tesco shareholders have warned that time is running out for Chief Executive Philip Clarke ahead of the announcement of an expected fall in sales and profits, the Sunday Times reported. A top 10 shareholder, the only one quoted in the story, told the paper Clarke and Chairman Richard Broadbent were becoming "discredited".
Real wages are set to rise for the first time in four years, the Sunday Times reported. Official figures on April 16th are expected to show annual growth in weekly earnings of 1.8% in the three months to February, up from 1.4% the month before. Inflation was 1.7% in February and is expected to have fallen in March in data released on April 15th. The EY Item Club will say it expects wages to rise 1.7% in 2014, faster than inflation of 1.6%.
Morrison's Chairman Ian Gibson is under pressure from some of the group's biggest investors to stand down, according to the Sunday Times. Two top 10 shareholders told the paper they wanted Gibson to make way for a retail veteran such as John Gildersleeve, the former Chairman of Carphone Warehouse and a Tesco veteran, or John McAdam, who chairs United Utilities and is Sainsbury's senior independent director. Sources close to Morrisons told the paper Gibson was supported by many investors and would not stand down.
A clause that stops the Government from selling more shares in Royal Mail expired on April 13th, raising concerns a further stake sale is on the horizon, the Sunday Telegraph said. Shares of the postal group have fallen more than 12% since the start of April in anticipation of the end of the lock-up agreement. Cantor Fitzgerald analyst Robin Byde told the paper the Government was unlikely to sell more of its remaining stake during the company's closed period before annual results are announced on May 22nd.
Mike Ashley will have no say over the future of House of Fraser if the Sports Direct founder succeeds in buying 11% of the department store group, the Sunday Telegraph reported. House of Fraser said Ashley would not have the right to sit on the board and that the purchase might not complete because it could violate House of Fraser's shareholder agreement. Tom Hunter, who agreed to sell the shares to Ashley, said he had offered them to existing shareholders as required by the agreement.
The Co-operative Group will reveal a full-year loss of more than £2.5bn in the coming days, raising concerns about the viability of the mutual group, the Sunday Times said. Boardroom disputes at the Co-op are worrying the group's lenders, including Barclays, Lloyds Banking Group and Royal Bank of Scotland. They have not sent in restructuring experts but time is running out for the group, which has net debts of £1.2bn mostly owed to its banks.
If the euro continues to strengthen, the European Central Bank will enact more stimulus measures to combat low inflation, ECB president Mario Draghi said, according to the Sunday Telegraph. "In a sense if you want monetary policy to remain as accommodative as it is today, a further strengthening of the exchange rate
... would require further monetary policy stimulus," Draghi commented at the International Monetary Fund's spring meeting on April 12th. He declined to say what euro exchange rate would be satisfactory.