PRESS DIGEST – British business – April 26

Monday April 26 2010

The Daily Telegraph

SENIOR TRADER FIRED IN FURTHER BLOW TO GARTMORE

Investment firm Gartmore (GRT.L: ) has been revealed to have
fired one of its senior traders, Mark Widowson, for irregular
trading activities weeks before it suspended fund manager
Guillaume Rambourg in order to conduct an investigation into his
activities. Gartmore said that Widowson’s dismissal was “totally
unconnected” with the investigation of Rambourg. The two
occurrences represent major disruptions to Gartmore’s public
image just four months after its public listing. Shares in the
company have dropped by more than 30 percent since the
announcement of the investigation into Rambourg.

SPECIALIST PREPARES FOR PUBLIC OFFER OF STATE BANK SHARES

Privatisation specialist Solid Solutions has made
preparations for capitalising on the public offering of
Government-owned shares in state-backed banks. Solid has added a
clause to its joint venture with UK bank Barclays (BARC.L: ) that
permits it to serve as an independent adviser to the Government
on the sale of any public shares in the future. Solid has been
in talks with UK Financial Investments, the company established
by the Government to manage the state investment in banks,
suggesting that the Government is intending to sell its shares
in banks including Royal Bank of Scotland (RBS.L: ) and Lloyds
Banking Group (LLOY.L: ).

WELLCOME QUITS RBS BRANCH BID

Wellcome Trust, Britain’s largest medical research charity,
has pulled out of the bidding process for the 318 high street
branches and small business operations being sold by UK bank
Royal Bank of Scotland (RBS.L: ). Four bidders remain, with
Spanish banks BBVA ( BBVA.MC: ) and Santander (BNC.L: ) the most
likely contenders ahead of private financial services company
Virgin Money and Australian bank National Australia Bank.
Wellcome had partnered with private equity firm Blackstone to
make an offer, but it is believed that this offer was not
competitive. The other bidders are believed to have submitted
offers of between one and two billion pounds.

SMITHS GROUP OFFERS IN-FLIGHT INTERNET

Engineering and technology specialist Smiths Group (SMIN.L: )
has signed a $30 million deal with internet provider Row 44 to
supply its broadband internet service to U.S. budget airline
Southwest. A number of international airlines, including
European carriers, have also expressed an interest. Smiths’
KuStream system uses satellites to provide an internet
connection that can be used anywhere in the world to access the
worldwide web or to make phone calls. Arsen Melconian,
vice-president of Smiths’ Tecom business, said: “The connection
is as good as sitting at your desk.”

LLOYDS AGONISES OVER THE FUTURE OF CRYSTAL PALACE GROUND

Lloyds Banking Group (LLOY.L: ) is weighing up its options for
a sale of Selhurst Park football ground. Fans of football team
Crystal Palace have submitted a bid for their team’s home
ground, but their offer falls short of the administrator’s
valuation. It is thought that Lloyds could attract a better
offer from property developers who may turn the ground into a
supermarket. Both options would attract criticism, with a sale
to fans representing poor value for shareholders in the 41
percent state-owned bank, and a sale to property developers
potentially threatening the future of the football club.

The Guardian

BUSINESSES IN FEAR OF COALITION GOVERNMENT, SURVEY REVEALS

A British Chambers of Commerce survey found that 65 percent
of businesses are “concerned” or “very concerned” about the
impact a hung parliament could have on the economy. 13 percent
said that a coalition government would be “a good thing” while
22 percent were “not concerned.” The pound weakened in recent
weeks as opinion polls showed a surge in support for the Liberal
Democrats, traditionally Britain’s third party, but investment
bank Goldman Sachs last week advised clients to buy sterling as
currency markets became “a lot more comfortable” with the
possibility of a coalition government.

HOUSING MARKET SLOWS, HOMES FOR SALE OUTNUMBER BUYERS

A report from property research group Hometrack suggests
that homes are coming on the market at a faster rate than new
househunters. Hometrack’s latest monthly market outlook showed
that the volume of property listings grew 3.7 percent, the
weakest growth seen this year. The number of new buyers
registering with agents rose by one percent, also the weakest
growth this year, and Hometrack said that people were wary of
buying due to potential economic and tax changes following the
May 6 election.

The Times

FOR SALE – AND THINK OF THE CLUBCARD POINTS

Tesco (TSCO.L: ) has turned its focus to housebuilding with
plans to develop “mini-villages” near its stores. The idea will
open up any number of revenue streams for the supermarket. As
well as increasing the profits of the company through living in
such close proximity to its outlets, inhabitants of the
“mini-villages” will make use of Tesco’s estate agents, mortgage
and banking services. The proposed locations of the
mini-villages are Bromley-by-Bow, Dartford, Streatham and
Woolwich, with “mixed use and leisure” schemes planned for
Ipswich and possibly Gateshead or Sunderland.

DIAMOND TOPS THE BILL IN NEW YORK LEGAL DRAMA

Bob Diamond, president of Barclays (BARC.L: ), will be among
those called to testify in a court case in New York which will
settle a dispute between Barclays and the estate of the defunct
investment bank Lehman Brothers. The estate’s lawyers allege
that Barclays made a covert “asset grab”, giving them a windfall
of $11 billion which they are demanding is returned to the
estate. Barclays not only deny this but also claims that it is
the party which lost out on the deal, and wishes to be paid $3
billion it says it is still owed.

BAT BRACED FOR PROTEST OVER CHAIRMAN

A potential dispute is brewing between the board and
shareholders of British American Tobacco (BATS.L: ) over the
proposed appointment of Richard Burrows as its new chairman.
Major investors, including the insurer Standard Life (SL.L: ) and
the governance advisory group Pirc, have voiced their doubts
over the recruitment of Mr. Burrows, who was chairman of Bank of
Ireland (BKIR.L: ) when it had to be bailed out by the Irish
government during the financial crisis.

The Independent

TAX MAN LOSES AS FIRMS BRING DIVIDENDS FORWARD

Research from Capita Registrars has revealed that 842
million pounds ($1.30 billion) was paid in dividends to
shareholders shortly before the end of the tax year on April 6,
with many companies using this tactic as a means by which to
avoid the rise in the rate of income tax for high earners. The
move could have cost the Treasury as much as 85 million pounds.
It is believed that it was mainly the heads of smaller companies
who employed this method of minimising the effect of the 50
percent tax rate, due to their greater flexibility over returns
given to themselves and other shareholders.
($1=.6465 Pound)

PRESS DIGEST – British business – April 26