Tesco is under pressure from investors to use "shock and awe" tactics to win the coming price war between supermarkets, the Sunday Times said. The call for aggressive action follows WM Morrison's announcement last week that it would spend £1bn over three years to attract customers back from Aldi and Lidl with much of the money going on price cuts. Tesco will automatically match Morrisons through its price promise policy but some investors want Britain's biggest retailer to take the lead on price cuts. However, other shareholders worry the tactic would hit profits with few gains.
BHP Billiton is preparing a share buyback programme worth many billions of pounds, the Sunday Times said. Chief Executive Andrew Mackenzie has cut costs and sold mines to adjust to the slowing economy of China. Once net debt is down to $25bn he will consider returning cash to shareholders. "That discussion is now becoming a practical one rather than a theoretical one," he told the paper.
Jimmy Choo is planning a London flotation that could value the upmarket shoe brand at £1bn, the Sunday Times reported. The business, owned by the fashion house Labelux, sells shoes ranging from £200 to more than £2,000. Sources close to Labelux said talks about floating a minority stake were at an early stage. Labelux bought Jimmy Choo in 2011 for £525m. Jimmy Choo is racing to join the deluge of companies listing in London amid renewed economic growth and rising share markets. Aldermore, the private equity-owned challenger bank for small businesses is also considering an autumn float valuing the company at £800m to £900m.
Lloyds Banking Group plans to lend an extra £1bn to small and medium businesses in the next year to support the economy, the Sunday Telegraph said. The move, to be announced on March 17th comes after the Bank of England reported a fall of £300bn in small business loans in January. "This is a very important segment for all banks in the UK. We want to become bigger and more popular in this market," Tim Hinton, Lloyds' head of small business and mid-market banking told the paper.
The world's biggest banks are preparing to cut ties with Russian clients, risking a run on the rouble, the Sunday Times said. The Russian currency has fallen against all currencies ahead of possible diplomatic measures. If all foreign loans to Russian clients were called in by banks there could be capital flight from Russia that would drain the rouble. About $180bn of the $263bn owed by Russian debtors to foreign banks is from EU lenders.
The private equity owners of the Automobile Association have been approached by City investment bank boutique Cenkos to float the business in London, the Financial Times reported. Cenkos is trying to drum up support from institutional investors who would buy a stake in the road assistance business in an accelerated public offering. The AA's holding company, Acromas, and Saga, the insurer, said the Cenkos approach was one of several made since about £3bn of the AA's debt was refinanced last year. No decision to sell has been taken, Acromas said.
Essar Energy's senior independent director has accused the company's founding family of trying to shortchange minority investors, the Sunday Times said. The Essar brothers, who launched Essar and floated it on the London market four years ago at 420p a share, offered 70p a share to buy out minority investors last week. Philip Aiken, who chairs the committee established to assess the offer, said: "You've got to think very carefully about the reputation of London here. This really shows that the [UK] Listing Authority needs to implement new minority shareholder rights without delay."
Serco's finance director Andrew Jenner is on the verge of quitting, the Sunday Times said. He is likely to stay for the arrival of new boss Rupert Soames in June but could leave this year after Serco agreed at £68.5m settlement with the UK government for overcharging taxpayers for electronically tagging criminals. Jenner recently sold £2.7m of Serco shares
for financial planning purposes.
Vodafone is expected on March 17th to seal its biggest deal since getting out of the US by buying Spain's Ono cable operator, the Sunday Times said. The UK mobile giant is putting the final touches to a £6bn deal, including debt, that will give it access to nearly half of Spanish homes.
Royal Bank of Scotland is in advanced discussions to buy back part of the Government's stake, allowing the bank to restart dividends, the Sunday Times said. The talks have prompted RBS to delay its annual meeting to late June from its normal time of May. When the Government rescued RBS in 2008 it forced the bank to issue it a special kind of share that would give the Treasury a much large dividend than other investors if RBS, which has not paid a dividend since then, resumed payouts. The holding inhibits RBS paying dividends and its removal puts the bank on the road to privatisation.
The Chancellor, George Osborne, will unveil a budget designed to boost business on March 19th, the Sunday Telegraph said. Measures will include help for housebuilders to get more homes built, a boost for the City's push to do more renminbi business, tax relief on smaller company investment, more funding for UK Trade and Investment, help for creative industries, and more measures on tax avoidance.
Tesco and Debenhams have shown an interest in buying the Knickerbox brand after adult stores group Ann Summers put it up for sale, the Sunday Telegraph reported. Ann Summers has hired KPMG to run the sale because it wants to go back to being more risqué, the paper said. It bought Knickerbox in 2000 when it was lossmaking.
Aga Rangemaker has released information on a new cooker aimed at city dwellers, the Sunday Telegraph said. The narrower, electric-powered cooker will be narrower to appeal to younger homeowners and couples whose children have left home. It is close to agreeing on a site in Liverpool Street to open its first City of London store to tie in with the new model's launch.