US activist investors are plotting to force Tesco, Sainsbury's and Morrisons to split off their property holdings, the Sunday Times reported. The plan, led by activist fund Elliott, would require them to put their property holdings into separate companies and to sell minority stakes on the stock exchange. The move would attract investors who would attach a higher value to the properties. Elliott bought small stakes in each of the retailers last year and has not yet revealed its plan to the retailers, whose combined property estates are worth almost £50bn, more than their joint stock market value of £38.6bn.
Lloyds Banking Group is set to report higher annual profit than expected after making hundreds of millions of pounds on its holdings of UK government bonds, the Sunday Telegraph reported. The earnings boost could ease a second sell-off of part of the government's stake in the bank and also make a resumption of dividend payments more likely. The bank's purchase of about £20bn of gilts since the end of June could increase revenues by up to £500m, an anonymous analyst said.
A hedge fund has bought a 5.2% stake in UBM, adding to speculation that the events and publishing group could be broken up or made to sell its £500m PR Newswire arm. The Sunday Times said Hengistbury, the hedge fund in question, was set up in 2011 by Stuart Powers, who used to work at The Children's Investment Fund, one of the City's most formidable activist investors. Selling PR Newswire, which has no overlap with UBM's main events business, could leave the company open to a takeover.
RSA Insurance is considering scrapping its final dividend to help fill the £500m hole in its balance sheet, the Sunday Times reported. Selling off businesses in central and Eastern Europe probably won't plug the capital shortfall and the board is now thinking about scrapping its final dividend and warning of low payouts in future.
Britain's economy expanded at its fastest pace since 2007 last year, making it the quickest growing country in Western Europe, the Sunday Telegraph reported. Official figures published this week are forecast to show GDP increased by 0.7% in the final three months of the 2013 calendar year and 1.9% for the full year - four times the rate in Germany, the paper said, citing economists.
Barclays is thinking about ending its £40m sponsorship of England's Premier League soccer because senior people at the bank believe the deal provides "zero value" in the UK, the Sunday Telegraph said. The planned withdrawal from glamour sponsorship is part of an overhaul that will see the bank spend more on technology for customers while slashing up to 40,000 global employees and 400 UK branches over six years.
Mothercare is in talks to sell its Early Learning Centre business, the Sunday Times said. Lazard is advising Mothercare on a potential cut-price sale of the shops, whose poor performance contributed to Mothercare's recent profit warning. The division was hit especially hard by Mothercare's decision to cut prices in the run-up to Christmas. A sale could be headed off by a bid for Mothercare from Tesco.
Prudential has held talks with the government about spending almost £300m on around 1,000 new homes in the UK, the Sunday Telegraph said. The plan, discussed by Prudential boss Tidjane Thiam and chancellor George Osborne, would involve the insurer providing £156m to Welsh local housing associations which would unlock another £120m of public funding grants. It is the Pru's first project since Britain's insurers agreed in December to supply £25bn of fundin for infrastructure.
Royal Bank of Scotland is considering transferring small business lending from it corporate bank to retail banking as part of a wider restructuring of the bank, according to the Sunday Telegraph. The change would cut costs and respond to criticisms of how the bank treats its small business customers. It would be part of a wider review under new boss Ross McEwan that could also see RBS and NatWest's private banking services and further cuts in investment banking.
The owners of Britain's big six water companies have been paid £11bn in dividends in the last 10 years while increasing bills by 55% and avoiding corporation tax, the Sunday Times said. The figures were revealed as Severn Trent, United Utilities and the rest of the big six faced a crackdown by their regulator. They will come under more pressure after becoming part of the debate about rising prices and falling living standards in the UK, the paper said.
Rupert Murdoch could make a new bid to own all of BSkyB, the Sunday Telegraph said. A second attempt to buy all of BSkyB, after Murdoch withdrew in 2010, would be by his 21st Century Fox TV and film arm after his publishing activities were split off into News UK. Owning BSkyB would let Murdoch combine it with Sky's German and Italian arms to cut costs and give him the scale he needs in a world where power has shifted to content providers. Murdoch is unlikely to launch a bid before the next auction of Premier League rights.
The Sunday Times said BSkyB profits are expected to fall more than 10% when it posts first-half results on January 30th. The satellite broadcaster has been hit hard by BT's attack on its home turf of sports broadcasting. Morgan Stanley analysts calculate that BT's swoop on English top-flight soccer alone will add £220m to BSkyB's costs this year.
Senior business people have criticised Labour's proposal to bring back the 50p top rate of income tax, the Sunday Times and Sunday Telegraph said. Lord Myners, the former Labour City minister, told the Telegraph shadow chancellor Ed Balls's idea was "old Labour" and not worthy of GCSE economics. Sir Mike Rake, chairman of BT, told the Sunday Times the policy was "disappointing" and would reduce tax income and job creation. Peter Hargreaves, founder of Hargreaves Lansdown, told the same paper: "In France there is a punitive higher rate of tax and everybody is leaving."
Xeros, which makes environmentally friendly washing machines, is considering a stock market listing. The company, whose product uses very little water or energy, has built a prototype of a machine for consumer use after focusing on commercial products until now. The Sunday Times, where the story appeared, said the company does not need fresh capital.