Old Mutual Sweetens £650m Bid For Wealth Firm

By Mark Kleinman, City Editor

Old Mutual, the London-listed South African financial services group, is in advanced talks about a £650m takeover of the UK's second-biggest independent wealth manager.

Sky News has learnt that Old Mutual is closing in on an agreement to acquire Quilter Cheviot after sweetening its offer for the company by approximately £50m.

A deal could be struck within a few weeks, continuing a shake-up of the City's wealth management landscape at a time of substantial regulatory change.

Quilter Cheviot, which is owned by the private equity firm Bridgepoint, was the subject of an earlier bid from Old Mutual during the summer.

People close to the situation said that a deal between the two companies was not certain, adding that Bridgepoint was continuing to progress its plans for a stock market listing that would catapult Quilter Cheviot into the ranks of London's 350 largest listed companies.

Other prospective buyers, including Investec, are said to have examined a takeover of Quilter Cheviot although it was unclear whether any other formal offers have been tabled.

In a statement issued last month, Bridgepoint said:

"Inevitably when IPO plans are being prepared there is parallel speculation and rumours about alternatives. We never comment on such rumours."

The addition of Quilter Cheviot to Old Mutual's wealth management arm would create a more powerful platform for serving affluent clients at a time of consolidation across the sector.

Another big player, Bestinvest, was sold to Permira, another buyout firm, last year, with a follow-on deal taking the firm's assets under management to approximately £9bn.

A flurry of deals has been accelerated by regulatory reforms known as the Retail Distribution Review, which have altered the way that wealth managers are remunerated for their work, shifting from a largely commission-based system to one based on the volume of assets under management.

Quilter Cheviot, which manages approximately £16bn in assets, was formed in 2012 from the merger of Quilter & Co and Cheviot Asset Management.

The company traces its roots back to 1771, making it one of the UK's oldest financial services firms.

Evercore, an investment bank, is advising Bridgepoint, while Old Mutual is being advised by bankers at Rothschild on the talks, insiders said.

Old Mutual, which declined to comment, is interested in expanding its wealth management business at a time when it is also reshaping parts of its business.

On Thursday, the Anglo-South African group priced the New York listing of its US asset management business slightly below its target range.

Bridgepoint also declined to comment.

14.47 | 0 komentar | Read More

Counting The Cost Of The Ebola Outbreak

The impact of the deadly ebola virus may cost West Africa £20bn, experts have warned.

The World Bank said the worst case scenario would see the wider region's lost GDP amount to 3.8%, with Liberia at risk of losing almost 12%.

Sierra Leone, which was forecast to have one of the top 10 growth economies globally in 2014, is also expected to see significant impact.

World Bank president Jim Yong Kim said: "The international community now must act on the knowledge that weak public health infrastructure, institutions and systems in many fragile countries are a threat not only to their own citizens.

"They are also to their trading partners and the world at large."

The spread of the deadly virus is the worst health scare since the outbreak of AIDS in the 1980s, according to a US official, overtaking the SARS crisis a decade ago.

"I would say that in the 30 years I've been working in public health, the only thing like this has been AIDS," US Centers for Disease Control (CDC) and Prevention director Thomas Frieden said.

"It's going to be a long fight," he told the heads of the United Nations, World Bank and International Monetary Fund gathered in Washington DC for an emergency summit.

The UN Food and Agricultural Organisation (FAO) also said the ebola crisis may impact food security.

This comes despite continuing price decline for most food items globally, bumper wheat production and huge rice stockpiles.

Tour companies and airlines have already been hit over Ebola fears

The FAO said the outbreak was a "hot spot" of concern since it was disrupting markets and farming activities "affecting food security and large numbers of people".

Meanwhile, the cost to other countries is yet to be accurately calculated.

Tour firms and airlines have already seen share prices fall as fears spread.

But specialist firms providing goods and services to help overcome the outbreak have seen benefits.

Phoenix Air Group, the world's only specialised highly contagious air transport service using Gulfsteam III jets, has been swamped with exclusive-use bids.

The UK, Canada, Mexico, Japan and the UAE have all tried to establish exclusive contracts, according to a US Department of State briefing document seen by Sky News.

The UN and World Health Organisation also tried to secure deals with Phoenix, the document revealed.

In response, the US offered Phoenix a $5m (£3m) six-month contract for medevac services for American government employees who may become infected.

And suppliers of white anti-contamination suits have seen orders spike as governments increase their response.

Britain's Department for International Development has boosted suit orders from a Hull-based contractor, from 50,000 a month to 100,000.

The suits cost around £25 each and are worn for about one hour, before the contamination risk becomes too great.

14.47 | 0 komentar | Read More

Microsoft CEO To Women: Rely On Karma For Pay Rise

The newly installed boss of Microsoft has come under fire for telling women they do not need to ask for pay rises, relying instead on "karma".

The comments were made by CEO Satya Nadella while he was speaking in Arizona at an event for women in computing.

Mr Nadella was asked at the conference to give his advice to women who are uncomfortable requesting a salary raise.

He replied that women should have faith that the system will give them the right raises as they go along.

"It's not really about asking for the raise, but knowing and having faith that the system will actually give you the right raises as you go along," Mr Nadella said.

"Because that's good karma... It'll come back because somebody's going to know that's the kind of person that I want to trust."

The comments by India-born Mr Nadella, who has a remuneration package of around $7m (£4.3m), caused a firestorm on social media.

Microsoft later posted an all-staff memo from the CEO on its website.

In it, Mr Nadella says he answered the question posed by interviewee Maria Klawe "completely wrong".

"Without a doubt I wholeheartedly support programmes at Microsoft and in the industry that bring more women into technology and close the pay gap," Mr Nadella wrote.

"I believe men and women should get equal pay for equal work.

"And when it comes to career advice on getting a raise when you think it's deserved, Maria's advice was the right advice. If you think you deserve a raise, you should just ask."

The remarks at the Grace Hopper Celebration of Women in Computing have the potential to harm both sales of Microsoft products and the appeal for female tech workers in Silicon Valley to work for the IT giant.

The controversy comes just days after reports of the deteriorating relationship between Microsoft founder Bill Gates and its former CEO Steve Ballmer.

Once close - Mr Ballmer was best man at Mr Gates' 1994 wedding - Vanity Fair said they no longer communicate as a result of the resignation.

14.47 | 0 komentar | Read More

EDF Go Ahead for Hinkley Point Nuclear Reactor

French energy giant EDF has been given approval to build a new nuclear power station at Hinkley Point in north Somerset, it has been confirmed.

The new-build power station is part of a plan to replace 20% of Britain's ageing nuclear power infrastructure.

Approval for the construction has been confirmed by regulators at the European Commission, following prior approval by Competition Commissioner Vice-President Joaquin Almunia.

The EU examined the bid over concerns the UK Government was giving excess help to the plan.

Mr Almunia said: "After the commission's intervention, the UK measures in favour of Hinkley Point nuclear power station have been significantly modified, limiting any distortions of competition in the single market.

"These modifications will also achieve significant savings for UK taxpayers.

"On this basis and after a thorough investigation, the commission can now conclude that the support is compatible with EU state aid rules."

Britain has previously estimated the new build cost at £16bn but some forecasts have put the total price up to £25bn.

The EU said that under treaty rules, member states are free to determine their energy mix.

It said that the UK has decided to promote nuclear energy and this decision is within its national competence.

However, it insists that when public money is spent to support companies, the commission has the duty to verify that this is done in line with the EU state aid rules, which aim to preserve competition among member states.

Known as Hinkley Point C, it will replace the A station, which is being decommissioned, and the operational B station.

Video: Nuclear Deal 'To Boost Industry'

It is the first in a new generation of UK nuclear power stations.

EDF had earlier said: "A new nuclear power station at Hinkley Point will not only provide a clean, secure and affordable source of electricity for around five million homes, but it will also provide around 900 jobs at the new power stations for more than 60 years."

The lengthy building programme is expected to create 25,000 jobs for almost a decade.

The industry's trade body head, Lord Hutton of Furness, welcomed the decision and said: "The Nuclear Industry Association is pleased the deal for Hinkley Point C has been approved.

"This is an important step in securing the UK's home-grown low-carbon electricity generation while adding jobs and prosperity to the economy."

:: EDF Energy CEO Vincent De Rivaz will be interviewed by Ian King Live tonight at 6.30pm.

14.47 | 0 komentar | Read More

High Street Decline Continues With Shop Closures

By Poppy Trowbridge, Consumer Affairs Correspondent

The decline of the high street has accelerated in the first half of the year, according to new figures.

Experts suggest betting shops and discount stores gained increasing footholds at the expense of traditional retailers.

While the recession has hit high street businesses hard, the changes have been put down to the rise of digital commerce.

The collapse of Phones 4u has added to the overall rise in shop closures

Matthew Hopkinson, director of the Local Data Company, told Sky News: "Significant changes are continuing to take place across Britain's town centres.

"It reflects the reality that shops need to become experiential destinations.

Video: High Street Woes Means More Pop Ups

"The transaction element is between people and not on product.

"The UK leads in terms of the impact online."

Town centres saw 406 net store closures compared to 209 in the same period last year, research from accountancy firm PwC, compiled by the Local Data Company, showed.

The collapse of businesses such as Phones 4u and lingerie chain La Senza saw this rise to 964 for the year to date at the end of September - two-and-a-half times the number for the whole of 2013.

There were 953 net closures in the first half of 2012 which reflects a closure rate of about 16 shops each day.

Traditional goods retailers such as shoe and clothes shops saw a net decline of 365 in the first half while leisure chains - encompassing food, beverage and entertainment - grew outlets by a net 215.

About 80% of the UK's national output comes from services, which includes retail, hospitality and financial industries.

The figures showed the changing face of the high street with coffee outlets, banks, pound shops, charity shops and convenience stores on the rise, together with American-style eateries.

Meanwhile, video libraries were wiped out, as were many mobile phone shops.

Mark Hudson, retail leader at PwC, said: "This data shows that we are now really starting to see the full effects of the digital revolution and consequent change in customer behaviour play out on the high street.

"We're heading for a high street based around immediate consumption of food, goods and services or distress or convenience purchases."

14.47 | 0 komentar | Read More

New Plans To Decrease Payday Loan Charges

The competition watchdog has revealed new plans to help consumers using payday lenders.

The Competition and Markets Authority (CMA) said the rules could save borrowers up to £60 a year.

Details of the sector overhaul were first revealed by Sky News City Editor Mark Kleinman on Wednesday.

The CMA said it wants to protect consumers from excessive charges imposed when making short-term loans.

Key to the proposal is the development of a "high quality" comparison sector between lenders to help would-be borrowers.

The CMA said: "As a condition of participation in the market, payday lenders would be required to provide details of their products on accredited price comparison websites.

"That will allow people to make quick and accurate comparisons between loans."

The CMA said it would help stimulate competition in the sector and make it easier for new companies to offer better rates.

It is also pushing for so-called lead generators - middlemen websites which sell potential borrowers' details to lenders - to increase transparency about their role.

"The CMA has found that many borrowers believe that lead generators are themselves actually lenders rather than simply intermediaries," it said.

"Even where this is understood, there is very little transparency about the basis on which lead generators pass borrowers' details on to lenders."

It also wants more details given to customers about fees, help them shop around without affecting their credit rating, and be given details to repeat borrowers of accumulated costs.

The CMA said a recent study showed the typical loan was £260, taken out for just over three weeks.

On average this would cost a borrower around £63 in charges.

It also said the typical payday loan borrower used the services of lenders around six times a year.

14.47 | 0 komentar | Read More

HSBC Directors Quit In Protest At Jail Threat

By Mark Kleinman, City Editor

Two directors of HSBC's UK arm are poised to quit in protest at new Bank of England rules that pave the way for lengthy jail sentences to be imposed on senior managers of failed lenders.

Sky News can exclusively reveal that Alan Thomson, a member of the audit and risk committees of HSBC Bank plc, has tendered his resignation and will leave the board at the end of October.

John Trueman, the deputy chairman of the legal entity that manages the UK high street and commercial bank, is also understood to be on the verge of resigning, despite having only taken on that role in December last year.

Sources close to the situation said that the likely departures of both men were a direct consequence of Prudential Regulation Authority (PRA) and Financial Conduct Authority (FCA) proposals to strengthen accountability for senior bankers.

A public filing about Mr Thomson's exit will be made by the end of the month, with a separate one about Mr Trueman following if his resignation becomes official.

The likely exits of the two HSBC directors over the proposed regulatory reforms has caused deep disquiet both there and among senior executives elsewhere in the sector, according to insiders.

They are the first bankers to have decided to relinquish their roles because of the impending regime.

"This is just the tip of the iceberg," said a lawyer close to another major UK bank.

Under proposals on which the PRA is consulting until the end of this month, bank directors and other top executives could face a new criminal liability if they were deemed to have taken reckless decisions which led to the collapse of their employer.

They would also be subject to disciplinary action from the City regulator for up to six years, twice the current time-limit, and be obliged to certify that all customer-facing staff and material risk-takers are competent to perform their duties.

Crucially, the new measures would be framed on a 'guilty until proven innocent' basis, according to lawyers, making it more difficult for bank bosses to clear their names if their organisation failed.

The PRA is also introducing new rules next year forcing bankers to defer bonuses for seven years from the point of award, creating the toughest pay framework of any global financial centre.

George Osborne, the Chancellor, pushed for the more stringent regime in the aftermath of the banking crisis and the conclusions last year of the Parliamentary Commission on Banking Standards, set up following the Libor rate-rigging scandal.

The resignations of the HSBC directors are, however, expected to throw the reforms into a sharper light at a time when bank boards are struggling to identify suitably qualified directors.

The PRA document published in June made it clear that the FCA would be responsible for oversight of banks' non-executive directors under a significant management functions regime.

On Monday, the PRA set out further details of its plans to ring-fence high street lenders from the same groups' investment banking arms by 2019.

This structural overhaul will entail banks recruiting separate boards for the different entities within their businesses, further increasing the need for individuals willing to serve as directors.

Mr Thomson and Mr Trueman, along with boardroom colleagues, are understood to have been briefed on the implications of the new rulebook by HSBC compliance staff in the weeks after the PRA and FCA outlined their regulatory framework at the end of July.

That explanation of the Senior Managers Regime is said to have prompted them to reconsider their roles as directors.

Mr Trueman is an experienced banker, having been a director of HSBC Bank plc since 2004 and previously the deputy chairman of SG Warburg.

Mr Thomson has a portfolio of jobs: since stepping down as finance director of Smiths Group, the FTSE 100 engineering business, he has become chairman of Hays, the recruitment agency, as well as Bodycote and Polypipe, two industrial groups.

HSBC's UK arm is the country's fourth-biggest lender, reporting a pre-tax profit of £3.3bn last year, and also manages some of its international assets in overseas markets.

HSBC and the PRA declined to comment on Tuesday.

14.47 | 0 komentar | Read More

Cable Turns Up The Heat On All-Male Boards

By Mark Kleinman, City Editor

Britain's biggest pubs operator and one of the country's largest sportswear retailers are to be targeted by Vince Cable in a renewed focus on bolstering boardroom diversity.

Sky News understands that the Business Secretary plans to write to the chairmen of approximately 30 FTSE-350 companies which have all-male boards more than three years after an initiative was launched to increase the number of women directors.

Among those which continue to have only men on their boards are Enterprise Inns, JD Sports Fashion, 3i Infrastructure and HellermannTyton, an industrial group.

Since Glencore, the mining and commodities giant, became the last FTSE-100 company to appoint a female director earlier this year, the number of all-male boards among the next 250 largest businesses has fallen from almost 50 to 30.

Mr Cable is expected to express frustration that the remaining laggards have not done more to bolster diversity.

His latest intervention will coincide with the publication of a half-yearly progress report on female representation in boardrooms.

New figures due to be published on Thursday are likely to show that only a couple of dozen further appointments need to be made by FTSE-100 companies during the next 14 months in order to meet the original target of 25% female directors by the end of 2015.

The diversity initiative was spearheaded in 2011 by Lord Davies, the former Standard Chartered chairman and trade minister who is among the UK's most respected businessmen.

Mr Cable and Lord Davies have both backed a voluntary approach to the issue, arguing that quotas would do little to address challenges such as the number of women in senior executive posts at major companies.

The Business Secretary is now turning his attention to other areas of diversity in business, arguing recently that ethnic minority representation in boardrooms remains weak.

14.47 | 0 komentar | Read More

FirstGroup Loses ScotRail Franchise

Transport giant FirstGroup has lost its renewal bid for the ScotRail franchise, it has been confirmed.

The company will continue to operate First ScotRail until the new contract starts on 1 April, according to Transport Scotland.

An announcement by Scottish government officials is expected to be made at 9.30am this morning.

The new franchisee for the £2.5bn contract is Abellio, an offshoot of the Dutch national railways.

Confirming the franchise loss, FirstGroup said: "As one of the most experienced rail operators we are actively participating in a range of rail franchise competitions with the objective of achieving earnings on a par with the last round of franchising.

"(We) remain in discussions with the Department for Transport in respect of a potential longer direct award for our largest franchise First Great Western, during the period when the substantial programme of infrastructure upgrades will take place on the network."

The ScotRail loss is another blow to the revenue potential of FirstGroup.

In May, FirstGroup discovered it had lost out on the new seven-year Thameslink, Southern and Great Northern (TSGN) franchise into London, which was won by Go-Ahead-owned Govia.

A week later it was revealed troubled outsourcing firm Serco won a 15-year contract to operate the Caledonian Sleeper.

The overnight service runs from London Euston, northwest England and more than 40 destinations in Scotland, including Edinburgh, Glasgow, Fort William and Aberdeen.

Last year, shares in the company plunged by 30% after it announced a £615m fund-raising rights issue in a bid to reduce its heavy debt burden.

The RMT rail union said the new contract was a "scandalous" development, insisting it was the ideal opportunity to bring the franchise back into public ownership.

And the TSSA rail union described the Abellio win as "a slap in the face for Scots rail passengers".

TSSA boss Manuel Cortes said: "Only a few weeks ago, the Scottish people were promised the power to run a publicly owned railway which would put them first, ahead of private rail firms.

"Now the Scottish government wants to hand that railway to a firm run by Dutch state railways.

"So Scots passengers will now effectively subsidise Dutch rail passengers so fares can be lower over there."

The news comes as FirstGroup released a trading update for the six months to the end of September, with bus revenue expected to rise 2.1% and rail revenue by 6.5% in the period.

14.47 | 0 komentar | Read More

Samsung Pledges New Phones As Profits Drop 60%

Electronics giant Samsung has forecast a profit plunge of almost 60% in the last quarter but promised it would soon release a new range of smartphones with "innovative designs".

The South Korean firm is struggling to maintain dominance in the ultra-competitive smartphone sector.

It said estimated operating profit for the July to September period was 4.1 trillion won (£2.4bn), down 59.6% from the third quarter last year.

Samsung said sales were estimated at 47 trillion won (£24.9bn), down 20.4% from the 2013 figure.

Its phone sector has come under pressure because of increased advertising spend and lower retail pricing, squeezing margins for the firm.

Video: Users Complain Of 'Bendy' iPhone 6

Samsung said "operating margin declined due to increased marketing expenditures and a lowered average selling price, driven by reduced proportional shipments of high-end models coupled with price decreases for older smartphone models".

The company is the world's biggest smartphone maker and unlike key competitor Apple, produces its own components for devices.

It warned that uncertainty in the mobile sector would carry through into the fourth quarter.

But it promised to release a new range of top-end smartphones featuring "new materials and innovative designs".

Video: Aug 2014: Samsung Boss On Trends

The mobile market, which has been the key driver of Samsung profits in recent years, has become increasingly saturated.

In addition to Apple's 'bendy' iPhone 6 release, competition has intensified from cheaper Chinese handset makers such as Huawei and Lenovo.

In July, Samsung reported a 20% drop in net profit for the second quarter.

Shares in Samsung are currently sitting at a two-year low.

14.47 | 0 komentar | Read More