Monday, 12 November 2007

New player in Northern Rock bid

A group led by former Abbey boss, Luqman Arnold (pictured), has emerged as a fourth potential bidder for troubled bank Northern Rock. It is understood that Olivant, a private equity firm run by Arnold want 20% of the business and effective control with the promise that his expertise from stints at Abbey and investment bank UBS Warburg will be enough to transform Northern Rock's prospects. Olivant, which has so far made only a couple of significant investments, including a 10% stake in a Russian bank, is considering a proposal that does not involve the sale or break-up of the lender's business. Last night the Northern Rock board was considering the bid as a fall-back option in case the other proposals fail.

The Olivant team would not receive any remuneration, with their reward coming from any revival in Northern Rock's share price. They have spent the past month preparing a detailed plan to take control and keep the bank going as a viable business. Arnold came to prominence when he was parachuted into Abbey five years ago after it revealed large losses from its wholesale banking operations. He stabilised its performance before the business was sold to Spanish bank Santander.

So far three groups - a consortium led by Virgin Group and private equity firms Cerberus and JC Flowers have expressed an interest in Northern Rock. They all plan to inject billions to shore up the bank's mortgages, but want full control of its share capital in return, leaving investors with only a small share of the business.

In the summer, Olivant raised £750m to support bids for under-performing finance companies. Its Northern Rock scheme is thought to involve acquiring an equity stake of between 10% and 20%. Arnold would become interim chief executive, replacing Adam Applegarth. The bank's chairman Bryan Sanderson is believed to welcome Arnold's interest, but is waiting until an informal deadline for bids, set for this Friday, has passed before assessing its merits. (source: The Guardian) - Virgin pushes forward in takeover & It is all about Virgin (Articles on Northern Rock takeover)

Dubai-based airline, Emirates Airline gave European based group, Airbus a significant victory over Boeing yesterday with the largest-ever single-aircraft order or the A350 over Boeing’s rival 787 in a purchase worth $35 billion (£16.7 billion). Emirates was already Airbus’s biggest customer for the massive A380, with 55 aircraft on order.

Boeing was left in the shadows, despite sealing several deals of its own: a $3.2 billion (£1.5 billion) order from Emirates for 12 of its 777-300s and a $6.1 billion (£2.9 billion) deal with Qatar Airways for 30 787 Dreamliners and five 777 cargo aircraft.

The deal was a huge boost for Airbus, whose sales had been lagging behind Boeing this year. Now industry analysts predict that the European manufacturer will pull ahead of its American rival by the end of the year.

Analysts said that Emirates rapid expansion plans hinge on the region’s economic success, with more tourists filling its fleet to capacity. Dubai is also building a new airport to handle a potential 150 million passengers a year, more than twice the capacity of Heathrow.

Emirates will retire 56 to 58 aircraft from its existing fleet as it incorporates planes from the new order, which are not scheduled for delivery until 2014. The fleet’s capacity will increase by only 15%, slightly below its current rate of expansion of 20% a year. Robert Ziegler, a Dubai-based aero-space analyst, said: “Emirates are building the highest-capacity network in the world. No other airline has ever tried anything like that before. Everybody is asking the question: what on earth are they going to do with so many planes? And more importantly: will it work?” (source: Timesonline) - Global News (source: Wall Street Journal) (Emirates public offering), Further delays for 787 Dreamliner & BP fined for a record amount (Delays on 787 Dreamliner)

Virgin founder, Sir Richard Branson, is keeping up the pressure on the chancellor, Alistair Darling, to modify his controversial plans for capital-gains tax. He is proposing the qualifying period for 10% taper relief be extended from two years to perhaps five years. His views follow consultation with the Sunday Times Fast Track 100 companies and several other entrepreneurs.

After a recent meeting with Darling and Gordon Brown, the prime minister, Branson wrote: “I believe this would encourage longer-term investment in private businesses — as five years is a more reasonable time frame to build and grow a business. “It would also have the advantage of excluding the majority of the private-equity professionals who make a living out of buying and selling businesses from this taper-relief bracket.”

Darling’s attempts last month to simplify the tax regime and catch more private-equity executives in his net backfired. They will increase the effective tax rate on the sale of privately owned companies from 10% to 18%. As a result, many entrepreneurs are considering selling up before the rules come into play next April.

However, Darling has let it be known he could alter his plan to ease the burden on small-business bosses. Sir Richard Branson added that business owners “applaud your attempts to simplify the capital-gains-tax structure but they also feel that some further consultation would be beneficial to form a fair and equitable solution”. (source: Timesonline)

The Formula One debutant this year, Lewis Hamilton, is close to signing a clutch of endorsement deals that will put him on track to become the world's first $1 billion sportsman. It is believed that Hamilton has held discussions with his financial advisers about a range of options to maximise his earning potential, including listing himself on the London stock market.

The innovative move could see the racing driver list a minority stake in a company in which he would be the main asset and remain the major shareholder. Several US sports stars are considering similar proposals, including Derek Jeter, the star batsman at the New York Yankees baseball team.

Hamilton's multimillion pound salary from McLaren, his F1 team, is set to be dwarfed by the sums earned from endorsing and promoting products. If he chose to pursue a listing on the AIM market in London, he could, for example, sell a 10% stake in Lewis Hamilton plc, for $100 million (£47.6 million). Investors in the company would be paid a dividend equivalent to 10% of Hamilton's total future earnings. The company would be structured like any other listed vehicle with a board of executive and non-executive directors.

Earlier this month, Hamilton announced he was leaving the UK to live in Switzerland, where he could live anonymously and not be mobbed in the street. It is believed that he will also save up to $40 million (£19 million) in tax per year from the move. (source: The Independent)

A study estimates that online shopping in the UK is due to hit £40 billion ($84 billion) this year. The figure comes from price comparison website, Uswitch, which says the boom is being fuelled by cheaper broadband deals and faster connection speeds, whilst a separate study from Forrester Research predicts that online Christmas shopping will reach £13.8 billion ($28.98 billion) this year, a 42% increase on 2006.

Uswitch's 2007 figure is based on data pulled from official Office for National Statistics retail numbers. It predicts that the UK's online spending will further rise to £162 billion ($340.2 billion) by 2020, when it will make up 40% of total retail sales. (source: BBC News)

No comments: