The Times
Sir Terry Leahy mulls plan to rival Sainsbury’s bid for Argos: Sir Terry Leahy and Clayton Dubilier & Rice are mulling a possible bid for Home Retail Group which would pitch the former Boss of Tesco against his old arch rival J Sainsbury.
Oil price sinks below $35 amid Saudi-Iran tensions: A glut of petrol in U.S. refineries and the worsening relations between Iran and Saudi Arabia helped to drive the oil price below $35 a barrel for the first time since 2004.
Lloyds faces inquiry over alleged gilt price rigging: Lloyds Banking Group is being investigated by the City watchdog over allegations that traders at the state-backed lender attempted to manipulate the price of U.K. government bonds.
Bond traders investigated over alleged price-rigging: The City watchdog is in the early stages of an investigation into alleged manipulation of the prices of bonds issued by some of the world’s largest non-government borrowers.
Sun shines on the righteous as renewable energy booms: Britain generated more electricity from sunshine than from rain for the first time last year. Solar farms contributed 7.1 terawatt hours (TWh) of electrical energy, pipping the 6.84 TWh produced by hydro-electric stations, according to an annual study of electricity generation.
Analysts divided over outlook for oil prices: Oil price forecasts are not worth the paper they are written on, says Simon French, Chief economist at Panmure Gordon, who argues that politics and volatile sentiment make predicting the crude price particularly difficult.
Co-op braced for £5 million court battle with whistleblower: A former senior Executive at the Co-operative Group is set to allege misconduct by its management in a court battle that will put the mutual back in the public spotlight.
The Independent
Starwood Value demands exit of Yahoo Chief Executive: Starboard Value, an activist hedge fund, has upped the ante in its battle with struggling tech giant Yahoo by demanding that its board make leadership changes – specifically that it replace its Chief Executive, Marissa Mayer, who is one of the most high-profile women in American business.
Female job applicants far more likely to be judged on appearance, study finds: Employers who analyse the social media profiles of job applicants are far more likely to judge women on appearance and men on content, a new study has found.
Bumper year for Beano’s Owners as profits rise 20% in 2015: DC Thomson, the Dundee-based publisher of titles including The Beano comic, shrugged off falling circulation to lift profits 20% last year, according to Companies House accounts.
Financial Times
Osborne warns of ‘cocktail of risks’ from China and slump in oil: George Osborne is warning that 2016 could mark “the beginning of the decline” for Britain unless the country sticks to tough economic reforms, citing the Chinese slowdown and plummeting oil prices among “a dangerous cocktail of new threats”.
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Sainsbury’s investors question bid for Home Retail Group: Several big investors in J Sainsbury have raised questions over one of the key planks of the supermarket’s attempted deal to buy Argos Owner Home Retail Group.
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Shire deal hinges on Baxalta tax status: Shire’s potential $32 billion takeover of Baxalta is dependent on whether the U.K.-listed drugmaker can pay for a large part of the deal in cash without triggering a big tax bill, say people close to the talks.
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U.K. coal sector set for showdown on closures: The majority of U.K. coal plants have refused to sign up to a scheme that would have seen them close automatically, meaning that the government will probably have to step in to force them to shut.
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TransCanada seeks $15 billion over Keystone: TransCanada, the company that had hoped to build the Keystone XL oil pipeline from Canada to the U.S., is seeking more than $15 billion in compensation under the North American Free Trade Agreement over the Obama administration’s decision to block the project.
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Colm Kelleher take bigger role in Morgan Stanley reshuffle: Greg Fleming, once considered a leading candidate to succeed James Gorman at the helm of Morgan Stanley, has left a few months after being sidelined in an internal reshuffle.
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CES 2016: Netflix launches in 130 new markets: Netflix has launched its streaming services in 130 more countries, raising the stakes in its global battle with Amazon for supremacy in online video.
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Lex:
Netflix: chill: The sobriety that briefly seized Netflix shareholders has already passed. After falling sharply in the first couple of trading days, last year’s best-performing S&P 500 stock jumped 9% on Wednesday after the streaming video service announced its immediate launch in 130 additional countries.
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U.S. Energy equity issuance: Family ties: In early 2015, stock issuance by frackers picked up. The expectation was that the oil prices would rally after their decline in late 2014. As it happened, U.S. production remained strong and prices continued to drop. Issuance followed suit. According to Dealogic, fourth-quarter equity proceeds raised by U.S. oil and gas producers was roughly $1 billion, against $11 billion in the first quarter.
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Swiss luxury: biding time: The Swiss National Bank’s decision in January 2015 to abandon its currency cap against the euro triggered sharp declines in the share prices of all Swiss exporters, especially those of luxury goods. Almost exactly a year later, things look only a little better. A franc now buys about 92 cents, against more than €1 in the immediate aftermath, and the volatility has subsided. That weakness has not helped the two main luxury-goods exporters. Shares in Swatch and Richemont are below the lows hit during the Francnami and have underperformed the Swiss market. Swiss watch exports to Hong Kong in particular have continued to weaken.
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Lombard:
Mayfieldmania does not make John Lewis a model for quoted companies: When the great pianist Franz Liszt played, audiences swooned. It’s the same with Sir Charlie Mayfield, Chief Executive of John Lewis Partnership, when he presents results, such as record festive sales at John Lewis department stores. Reaching for the smelling salts, retail analysts compare a 5.1% increase from comparable space with a drop at weather-beaten Next. Excitable business writers extol the employee-owned business, even as they prepare to give Marks and Spencer a kicking.
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Baxter’s backstop: Shire is back in the frame to acquire rival U.S. drugs group Baxalta for around $32 billion. The sticking point is cash. The U.K.-quoted bidder is willing to sweeten its all-share approach by turning two-fifths of the consideration into the cold hard stuff. But this could trigger a tax liability of billions for Baxalta investors, including erstwhile parent Baxter, a healthcare group which retains just under 20%.
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The Daily Telegraph
U.S. stocks hit three month-low as China woes plague investors: The tumultuous start to 2016 continued to wreak havoc on financial markets around the world this afternoon, as the Dow Jones industrial average fell to a three-month low.
Capacity crisis at U.K. airports revealed by delays league: The capacity squeeze at Britain’s overcrowded airports and need for a new runway in the South East has been highlighted by data revealing punctuality in the airline industry.
Company reputation worth £1.7 trillion to the U.K. but quarter of firms ignore it: More than a quarter of the value of small and mid-sized companies is tied to their reputation, yet many firms still fail to make their good name a priority, new research has found.
Federal Reserve too ‘concerned’ by weak inflation to push on with rate rises: U.S. interest rates could remain unchanged for months, as records of the Federal Reserve’s latest meeting revealed that policymakers were “concerned” by the economic outlook.
Bankers say City ‘would continue to thrive’ in or out of Europe: London would thrive as a financial hub whatever the U.K. decides to do about its EU membership, according to some of the City’s biggest investment banks.
Sports Direct builds stake in Umbro Owner: Mike Ashley’s Sports Direct has revived its interest in Umbro by taking a 9% stake in the troubled American company that owns the classic sports brand.
Chinese companies warned to tell investors when executives go missing: Chinese companies should keep investors informed when their senior staff disappear, Hong Kong’s top finance Minister has urged after a slew of Executives have gone missing in recent months.
The Questor Column:
Johnson Service turnaround on track: Normally, it is never advisable to wash your dirty linen in public, but Johnson Service Group has made a rather successful business out of it. What’s more, the shares are mounting a comeback after a significant turnaround. The company generates the core earnings from washing work uniforms in its Apparelmaster and Stalbridge divisions. The recovery of the U.K. economy and the strong bounce-back in the jobs market have helped the company get back on its feet. Revenue increased by 7.5% and adjusted pretax profits jumped 19% higher in the most recent set of results for the six months to the end of June. In particular it was the textile rental business that enjoyed a 15% increase in sales and profits in the half-year period. The recovery in the U.K. has also helped the smaller dry cleaning business, which trades through the high street Johnson Cleaners brand and Jeeves of Belgravia. This business really struggled in the past by having too many unprofitable high street locations, but closing stores has allowed profits to stabilise despite a dip in revenue. The company updated the market that trading was in line with market expectations for a doubling in pretax profits to £25 million, on revenue of £227 million, giving 6.1p in earnings per share. The solid set of results would be a remarkable turnaround for a company that was staring into the abyss in 2008 after it had taken on far too much debt during a rapid expansion programme. Johnson Service has undergone a painful five-year period of drastic cost cutting and reorganisation. Hold. Johnson Service Group at 88½p +¼p. Questor says “Hold”.
Sell BHP Billiton as oil exposure increases pain: BHP Billiton shares are heading back towards their lowest level in more than 10 years as the collapse in the oil price threatens to seriously undermine the strategy of diversifying the miner into oil and gas. BHP leans on the oil and gas division more than most to prop up the rest of the business. The miner generated about a third of its total group earnings from petroleum two years ago but that slumped to just 15% in last year’s results. The oil price has almost halved again since those results at the end of June. On top of this challenging market, BHP has also had to deal with the tragedy of a dam bursting at its Samarco mine in Brazil. The Brazilian government has said it will levy a £3.5 billion fine on the dam Owners. The first payments to victims began. BHP has taken drastic action to respond to the downturn. Capital expenditure has fallen from $15 billion (£10.2 billion) in 2014, to $11 billion last year, and is forecast to drop to $7 billion by June 2017. The company sold off unwanted assets into the South 32 vehicle, which began trading separately in May last year. The management response is laudable, but the downturn has now entered a new phase. The forecast is for pretax profits to fall a further 40% next year to about $5 billion. BHP is expected to generate about $10 billion in free cash flow, but $6 billion of that will be eaten up by capital expenditure and the company will have to use borrowing if it wants to maintain the $6.6 billion in dividend payments. It is a strategy that looks unsustainable in the current environment. We recommended selling shares in BHP at £17 in September 2014 and, until there are some sign of stability in the price for commodities that advice remains. BHP Billiton at 709.4p -36.6p. Questor says “Sell”.
Flood hit Carr’s still on track: Carr’s Group, the agriculture, food and engineering conglomerate, was hit by the flooding that followed Storm Desmond in December, but the company said that results would be unaffected and production was returning to normal. The animal feed factory in Lancaster was the worst impacted part of the business. Tim Davies, Chief Executive, said that the whole of Cumbria faced an enormous challenge as a result of the flooding, but the direct financial impact was fully covered by insurance. Carr’s remains on track do deliver revenue of £407 million, and pretax profits of about £17.7 million. Carr’s has developed an animal feed block that allows herds to produce more milk or put on more weight for the meat market. The company sells these around the world and invested in a new facility in Nevada, in the United States, last year. The global spread meant strong U.S. sales offset a weaker performance in the U.K. after a mild winter. Carr’s engineering wing has endured a tougher time, as the collapse in oil prices hit demand at its Chirton business. However, the long-term outlook for engineering is good. The German-based remote-controlled robotics business, Walischmiller, is seeing evidence of a recovery in the U.K. nuclear industry, with new contracts from Sellafield expected to lift second-half trading. The shares are rated on a fairly conservative PE ratio of 12 and offer a 2.3% prospective dividend yield. We continue to like the odd mix of the business, which provides steady revenues, and would buy for the long term. Carr’s Group at 153p +3.5p. Questor says “Buy”.
The Guardian
Global financial markets slip as oil price plunges to new lows: Global financial markets suffered a third day of new year turbulence after fresh fears over the health of China’s economy and tension between Saudi Arabia and Iran sent the price of oil plummeting to its lowest level in more than a decade.
World Bank issues ‘perfect storm’ warning for 2016: The risk of the global economy being battered by a “perfect storm” in 2016 has been highlighted by the World Bank in a flagship report that warns that a synchronised slowdown in the biggest emerging markets could be intensified by a fresh bout of financial turmoil.
George Osborne warns U.K. economy faces ‘cocktail of threats’: George Osborne will on Thursday warn of the risks to the U.K. from the shaky global economy when he says 2016 has opened with a “dangerous cocktail of new threats”.
Qatari shareholders uneasy over Sainsbury’s Home Retail Group bid: Sainsbury’s largest shareholder, the Qatari Investment Authority, has expressed unease about the retailer’s £1 billion bid for Home Retail Group and may be prepared to block a deal.
Thousands of Argos jobs at risk if Sainsbury’s deal is struck: As many as 245 Argos shops could close if Sainsbury’s secures a deal to buy Home Retail Group.
Ex-Asda Boss admits stealing charity funds to give to boyfriend’s ballet firm: A former Asda Executive is facing jail after admitting to stealing £180,000 from the retailer’s charity fund for his partner’s ballet company.
Marks & Spencer to trial larger food halls: Marks & Spencer has begun a trial scheme to increase the size of its food halls and cut back on the space it devotes to fashion as its clothing sales continue to slump.
Daily Mail
Online revolt sparks record rise in internet sales for John Lewis during Christmas season: The online revolution transforming British shopping habits sparked a record rise in internet sales for department store John Lewis.
Car sales race ahead to hit a record high boosted by cheap credit, low interest rates and competitive deals: A record number of cars were sold in booming Britain during 2015, official figures are set to reveal.
Investors looking for a return on stock market forays warned of dividend payout threat: Investors looking for a return on their stock market forays this year will have slim pickings, according to stockbroker AJ Bell.
Treasury looking to put Bradford & Bingley’s £17 billion loan book on the block: The Treasury is putting out feelers to sell the £17bilion loan book of former mortgage lender Bradford & Bingley, in what would be the biggest ever sale of financial assets by a European government.
U.K. fuel prices could fall further as Brent crude tumbles to a 12-year low: Oil tumbled to its lowest level for nearly 12 years, raising the prospect of further falls in fuel prices on British forecourts.
B&M Boss Karen Hubbard poached by greetings card specialist Card Factory: A greetings card specialist has poached an Executive from discount retailer B&M Bargains to replace its retiring Boss Richard Hayes.
Daily Express
Buyer surge sees home price boom: Demand from buyers who are desperate to find a home is surging while the supply of properties for sale continues to dwindle, new figures show.
Retailers’ store sales plunge as shoppers flock to the internet: The decline of the high street appears to be happening at an even faster pace than had been feared, as British shoppers spurned shops for the internet over Christmas.
Marks and Spencer revamps bank account for savers, should you switch?: High street favourite Marks and Spencer (M&S) has added extra benefits and rewards to its current account in an effort to tempt customers away from the traditional big banks – but there are a few catches to watch out for.
Osborne’s landlord tax grab pushing one in 10 landlords to sell up: Almost one in 10 landlords are planning to sell their rental properties as a result of brutal new taxes coming into force, research has revealed.
Santander customers warned as fees jump by 150%: Millions of Santander customers will see the cost of their current account jump next week as the bank raises fees by 150%.
The Scottish Herald
Scottish services sector struggles but manufacturers enjoy strong domestic orders: Scotland’s dominant services sector suffered falling U.K. and overseas sales in the fourth quarter amid the oil and gas industry downturn, but manufacturers enjoyed strong domestic orders, a survey has revealed.
Mounting distress in North Sea will spark wave of sell offs say experts: Wood Mackenzie has predicted a surge in mergers and acquisition activity in oil and gas markets as “mounting distress” forces many firms to sell assets in areas such as the North Sea although it reckons there may be some recovery in crude prices this year.
Carol Smillie and tennis star Annabel Croft launch DiaryDoll pants range in Boots stores: Television presenter Carol Smillie and tennis star Annabel Croft have launched their award-winning range of DiaryDoll pants in 122 U.K. Boots stores.
Diet chef Chief eyes expansion after investor buyout: Entrepreneur Kevin Dorren is cooking up ambitious growth plans for his online Diet Chef business after buying out the company’s private equity backers.
Surrey-based oil and gas firm eyes North Sea deals: Private Equity-backed Zennor Petroleum has highlighted its interest in acquiring more North Sea assets after recruiting a veteran of the area to its management team.
The Scotsman
Sainsbury’s Bank Edinburgh head office sells for £19 million: Aviva Investors has sold the Sainsbury’s Bank head office building in Edinburgh for £19 million.
MediCity Scotland incubator secures first tenant: Medical image analysis company OracleBio has become the first tenant to move into MediCity Scotland, the technology incubator on the BioCity Scotland campus in Lanarkshire.
Dundee app studio Waracle acquired by Exception: Waracle, the Dundee-based mobile app firm, has been taken over in a seven-figure deal.
John Lewis hails ‘strong’ Christmas but Waitrose dips: Retail group John Lewis Partnership has revealed a mixed festive trading performance at its department stores and supermarkets.
Faroe buoyed by data showing doubling of resources: Oil and gas explorer Faroe Petroleum said it was sitting on almost double the amount of hydrocarbons that it previously thought.
City A.M.
Manufacturers expect tough year as export growth drops to 2009 levels: Manufacturers are unlikely to contribute much to the U.K.’s economic growth this year, according to new survey figures released this morning.
Apple share price drops below $100 on reports of slowing iPhone 6S and 6S Plus shipments: Apple shares slumped below $100 for the first time in months as production cuts refuelled worries that demand for iPhones is weakening.
Tesco Bank lets students keep their cash after an ATM glitch saw people getting double their withdrawals: Before the Christmas break and while last-minute present buying was well under way, students in Manchester were blessed by a malfunction from Tesco’s banking arm. An ATM in a residential area of the city began dishing out double the money that was requested for withdrawal.
Mergermarket buys London-based Creditflux as private equity Owner BC Partners looks for global growth through acquisitions: Mergermarket, the online financial news service, has bought Creditflux, a London-based data provider, for an undisclosed sum.
Topps Tiles nails start to the year as Britons spruce up their homes: Topps Tiles enjoyed a jump in sales over the last three months, thanks to improving consumer confidence and a rise people doing up their homes.
FTSE 100 index closes down as concerns over China cause mining stocks to fall: The FTSE 100 index closed down, dragged lower by mining stocks as concerns over China continued.
Neil Woodford-backed Proton Partners International receives £30 million loan from Shawbrook bank to fund development of three proton therapy centres: Challenger bank Shawbrook has agreed a £30 million loan for Proton Partners International, which is developing the U.K.’s first dedicated proton beam therapy centres.
