Stephen Hester, the new Chief Executive of RSA Insurance, is preparing an 800m pounds rights issue to strengthen the company's balance sheet, the Sunday Times said. Hester, who joined RSA three weeks ago, is expected to announce the capital raising with annual results on February 27th. The fundraising will be twice the size many analysts expected and the final dividend is likely to be scrapped. Hester, the former boss of Royal Bank of Scotland, is building on Chairman Martin Scicluna's review which is likely to strip RSA back to its UK, Scandinavian and Canadian operations.
Royal Bank of Scotland is expected to announce its departure from up to 20 countries when it posts annual results on February 27th, the Sunday Times said. A five-year turnaround plan, codenamed Project Cook, under new Chief Executive Ross McEwan aims to save RBS up to £3bn a year. McEwan will slash the international operations of RBS's investment bank to concentrate on the UK. The government-controlled bank has scaled back its international operations already but is still in 38 countries.
Ross McEwan, RBS's boss, will pledge to support UK customers by increasing transparency and cutting bureaucracy when he unveils his strategic review, the Sunday Telegraph reported. The customer-first message is not new at RBS or other UK banks but McEwan will emphasise his point by addressing customers and employees on the morning of results day and only then talking to City analysts. An RBS source told the Telegraph McEwan was "not hung up on privatisation" and that his earlier turnaround of Commonwealth Bank of Australia took "a number of years".
The US's Discovery Communications and BSkyB of the UK are in talks about a bid for Channel 5, the Financial Times reported. The proposed deal would involve BSkyB acquiring the advertising sales operation of Channel 5, which owner Richard Desmond has put up for sale for £700m. BT, Saban Capital and NBC Universal are also considering bidding, the paper said.
One of Tesco's biggest investors has supported Chief Executive Philip Clarke, who is this week expected to scrap a pledge to achieve a 5.2% profit margin. David Herro, Chief Investment Officer at Chicago-based Harris Associates, told the Sunday Times the target, set two years ago, was "too monolithic, especially in the short and medium term". In a strategic update on February 25th, Clarke is expected to say Tesco needs more leeway to combat rivals such as value chains Aldi and Lidl. He will also say Tesco will scrap some confusing promotions and cut prices instead.
HSBC will offer Chief Executive Stuart Gulliver a big salary increase to avoid European rules on bankers' bonuses, the Sunday Times said. The proposal is set to be published with HSBC's annual report this week. Bonuses and benefits worth five times his salary took Gulliver's pay to about £7.5m last year but new EU rules limit bonuses to two times salary. His basic pay could be doubled and he is likely to be offered an "allowance" of shares
to get round the regulations. Analysts expect annual profits up 20% to about $24bn.
BP is close to a small reprieve in its four-year battle with the US authorities following the Gulf of Mexico oil spill, the Sunday Telegraph said. John Minge, who runs BP America, told the Louisiana Mid-Continent Oil and Gas Association that it could once again be allowed to bid for US government contracts after making progress in talks. "We're working with the Environmental Protection Agency. I think we're getting closer to an agreement," Minge said.
Ladbrokes' Chief Executive Richard Glynn has been given until after this year's Soccer World Cup to overhaul the bookmaker, the Sunday Telegraph said. Shareholders have said unless he achieves "milestones" for improving Ladbrokes' online business he will face the sack in August. The bookmaker posted its fourth profit warning in just over a year in September and admitted that a partnership with gaming software business Playtech had gone less smoothly than expected.
The fall in the US dollar
has cut more than £110m from the value of cash UK-based Vodafone shareholders will receive from the company's sale of its stake in Verizon Wireless, the Sunday Telegraph reported. The dollar has fallen 2.2% since the circular for the deal was sent to shareholders. Vodafone said shareholders should receive about 72p in Verizon shares and 30p in cash for each Vodafone share. UK investors make up about 35% of the investors who will get $23.9bn in cash from the deal on March 4th, the Telegraph said.
The heads of the UK's biggest bookmakers have defended the industry against growing uproar over fixed-odds betting. The bosses of Gala Coral, Ladbrokes, Paddy Power, William Hill and Betfred wrote to the Telegraph to say most customers who play machines do so responsibly and that problem gambling had not increased since fixed-odds machines were introduced in 2002. However, they have embraced a new code of conduct, introduced this week, that includes letting players set a maximum loss for a single session.
SSP, the catering company behind Upper Crust and other fast food businesses, is working on a £2bn summer flotation, according to the Sunday Times. The private equity-owned company appointed Goldman Sachs and Morgan Stanley last week. The listing for SSP, run by former WH Smith boss Kate Swann, is likely to raise between £450m and £500m. Its other outlets include Delice de France, Millie's Cookies and other brands with outlets at rail stations and airports.
Polypipe, a maker of plumbing pipes, and Patisserie Valerie, a chain of cafes, are working on flotations for later this year, the Sunday Times said. Polypipe, which made £49m of earnings from £282m of sales in 2012, is expected to list in a deal worth £400m in the next few months. Patisserie Valerie, majority owned by entrepreneur Luke Johnson's Risk Capital, is planning a float for late spring that could value it at more than £150m.
The UK's economic recovery relies on consumer spending despite signs of recovery in business investment, official figures are set to show. The Sunday Telegraph reported that economists expect household spending, which is almost two-thirds of GDP, to have increased 0.7% in the final quarter of 2013. A forecast 1.2% rise in business investment is well short of "escape velocity", RBS economist Ross Walker said.