PRESS DIGEST – British business – July 17

Daily Telegraph

HOUSE PRICES ‘TO CRASH 20 PERCENT BY 2012’ AS BUDGET BITES

Consultants Capital Economics has predicted a 23 percent
fall in house prices over the next two years as cuts to
government spending, increased taxes and rising unemployment
take hold. The prediction implies a poor second half of 2010.
Nationwide figures show house prices are currently three percent
higher than the start of the year, but Capital expects them to
finish the year five percent lower than they started. Capital
believes prices will fall by ten percent in both 2011 and 2012,
but warned its 2012 forecast “is highly uncertain”.

MOTHERCARE IN TALKS OVER STAKE

Maternity and babywear retailer Mothercare (MTC.L: ) is
negotiating the acquisition of a 25 percent stake in Headline
Group (HLD.AX: ). Headline manages the Mothercare and Early
Learning Centre franchises in New Zealand and Australia, with
Mothercare hoping the purchase will expedite its expansion in
the two countries. Mothercare will fund the investment through
12.2 million Australian dollars of convertible loan notes and,
should the offer be accepted, place a director on the Headline
board.

KIRSH SAYS HE HAS ‘NO DESIRE TO CONTROL’ MINERVA

South African tycoon Nathan Kirsh has stated he has “no
desire to obtain control” of property company Minerva (MNR.L: ).
Kirsh is Minerva’s largest shareholder through his KiFin
investment vehicle. KiFin released a statement claiming to have
been misrepresented by Minerva’s claim that it had demanded the
removal of its chief executive and chairman on Wednesday,
insisting the meeting had centred on a lack of financial
disclosure.

HCL BOSS SPENDS SEVEN MILLION POUNDS ON HUSBAND’S MEDICAL.

Medical recruitment company Healthcare Locums (HLO.L: ) has
agreed to acquire the business and assets of Redwood Health for
6.7 million pounds. Redwood is owned by John Cariss, the husband
of Healthcare Locum chief Kate Bleasdale. Healthcare will pay an
initial five million pounds for the business with a further 1.65
million pounds in performance related payments. The acquisition
comes despite Redwood carrying a “going concern” warning on its
latest accounts. The money will be paid to Cardale Investments,
John Cariss’ investment vehicle in which Bleasdale was a
director and major shareholder before resigning four weeks ago.

The Guardian

AUSTERITY DRIVE WILL HAND BILLIONS TO PRIVATE SECTOR

Government plans to increase efficiency and reduce spending
in the National Health Service and at local authorities will
create billions of pounds’ worth of contracts for private
companies. Outsourcing firm Capita (CPI.L: ), the largest in the
UK, has said that it has already seen a doubling of the number
of opportunities for local authority contracts so far this year.
The devolution of control of the NHS from primary care trusts to
consortia of general practitioners is also expected to create
opportunities for private companies, such as US health firms
Humana (HUM.N: ) and United Health.

UK UNDER PRESSURE TO BAN NORTH SEA DRILLING AFTER BP’S GULF.

The European Union energy commissioner, Gunther Oettinger,
has called on the UK government to ban new oil drilling
operations from the North Sea. The British government is
perceived by international figures to be lax in its supervision
of energy companies after incidents such as the Buncefield oil
plant explosion, which landed energy firms BP (BP.L: ), Shell
(RDSa.L: ) and Total (TTAT.L: ) with a fine of only 5.3 million
pounds. British firm BP has also recently been criticised for
allegedly petitioning the government to release a Libyan
convicted in the 1988 Lockerbie bombing as part of a deal for
oil rights from the Libyan government.

RBS COULD SUE GOLDMAN OVER 523 MILLION POUND LOSS ON ABACUS
DEAL

British bank Royal Bank of Scotland (RBS.L: ) may bring a
lawsuit against US bank Goldman Sachs over the 800 million
dollars that RBS lost to Goldman in a mortgage securities deal
that has since seen Goldman being fined for 550 million dollars
by US regulators. Goldman has admitted that the marketing
materials it supplied to investors about the deal were
“incomplete”. Goldman is to pay back only 100 million dollars to
RBS of the 800 million invested while German bank IKB (IKBG.DE: )
is to be returned the entirety of its 150 million dollar
investment.

MYERSON BRUSHES OFF COLD SHOULDER TO PURSUE D1 FIGHT

Activist investor Brian Myerson is preparing himself for
defeat in his long-running battle to gain control of the board
of biofuel company D1 Oils (DOO.L: ). Myerson is calling for D1 to
be broken up or sold off after it has been forced to call
several times for additional funds from investors. The outcome
of the vote is likely to be coloured by Myerson having this week
been handed a “cold-shoulder” penalty by regulator the Takeover
Panel, banning him from takeover deals for three years for
having been involved in a secret investment concert party.

BURBERRY BUYS OUT CHINESE PARTNER TO UNIFY THE BRAND

Fashion retailer Burberry (BRBY.L: ) has bought out its
Chinese business partner, Kwok Hang Holdings, for 70 million
pounds. Chief executive Angela Ahrendts said that “unifying the
brand” was the intention of the buyout. Burberry has been on
sale in China for 20 years through the franchise partnership,
which made operating profits of 14 million pounds last year. The
deal, expected to generate an additional 20 million pounds of
profit for Burberry next year, sent the company’s share price up
nine pence to 799.5 pence on Friday.

The Times

FOUNDERS OF BETFAIR STAND TO SHARE 375 MILLION POUND PAPER.

It is rumoured that the online betting exchange Betfair is
planning to float on the stock market by the end of 2010, a move
that would earn its founder Ed Wray and Andrew Black a total of
375 million pounds. Since its creation in 1999, Betfair has
grown in size to become a business with three million customers
and annual revenue in excess of 300 million pounds. The company
refused to comment on the rumours.

LOTTERY BOARD SNUBS CAMELOT PLAN FOR RIVAL TO PAYPOINT

The National Lottery operator Camelot’s scheme to sell
services for paying utility bills and top-up facilities for
mobile phones has been provisionally vetoed by the National
Lottery Commission. Camelot stated that it floated the idea
after the Lottery Commission asked for plans on how to increase
the 1.55 billion pounds raised for charitable purposes every
year, and is likely to appeal against the ruling, which is not a
final judgment but an extended consultation ending on September
3. PayPoint (PAYP.L: ) celebrated the ruling, saying: “This is a
victory for local shops and sub-post offices, whose earnings and
footfall would be undermined by this proposal.”

The Independent

FSA COULD TREBLE LAST YEAR’S FINE TOTAL

55.6 million pounds of fines have been imposed by the City
regulator the Financial Services Authority during 2010, far in
excess of the 22 million pounds imposed in 2009 – itself a
record figure. Although the 30 million pound penalty punishing
the US investment bank JP Morgan for failing to protect client
money constitutes over half of the fines, the total for 2010
could rise to as much as 80 million pounds.

CANDOVER TAKEOVER TALKS COLLAPSE AS SUITOR WALKS AWAY

Takeover negotiations between the London-listed private
equity group Candover (CDI.L: ) and an unnamed Canadian pension
fund, believed to be Albert Investment Management Corporation,
have ended in failure. It is believed that the deal foundered
because of the potential buyer’s reluctance to agree terms with
Candover’s debt holders. The main problem arose from the buyer’s
unwillingness to pay off UK investors holding around 200 million
pound in private placement bonds.

PRESS DIGEST – British business – July 17