Sunday newspaper round-up: AstraZeneca, BSkyB, interest rates

11th May 2014 11:23

Pfizer has been advised by a top US law firm that its assurances over the proposed £63bn takeover of AstraZeneca are legally binding, the Sunday Times reported. Chief Executive Ian Read hopes the opinion from Skadden Arps will help cool the political argument over his intended deal. He will be questioned by MPs on two select committees this week amid calls for the bid to be subject to public interest tests. Pfizer has made a number of pledges to the Government, including keeping 20% of research and development staff in Britain but critics have said Pfizer could renege on them after a deal.AstraZeneca shareholders have told its management to talk to Pfizer if the US company makes a higher takeover approach, the Sunday Telegraph reported. They insisted that Pascal Soriot, Astra's Chief Executive, should "engage" with Pfizer when the next approach arrives instead of dismissing it almost immediately. The investors made their point at meetings to follow up on Astra's defence presentation when it highlighted its drugs pipeline. Pfizer is expected to return with a bigger proposal containing more cash, the paper said.Pfizer Chief Executive Ian Read has said his proposed takeover of AstraZeneca would be a "win-win" for shareholders and patients, the Financial Times reported on its website. Read's video statement was an attempt to regain momentum after a week of increasing resistance from politicians and scientists. Read said the strength of Astra's UK-based science and its plan to build a research centre was a big reason to buy the company.BSkyB is considering making takeovers to consolidate Rupert Murdoch's European TV stakes, the Sunday Times reported. The satellite broadcaster, 39% owned by Murdoch's 21st Century Fox, is in early talks to buy his holdings in Sky Deutschland and Sky Italy - deals that would give the UK company control of companies beaming TV into 8.5m European homes. The stakes are worth about €8bn and would fetch a likely €10bn including bid premiums. Sky's market value is £14bn. The deals could give Sky extra clout in the battle for football rights, with BT competing aggressively in the UK.Ofcom, the communications watchdog, is likely to bar any attempt by Rupert Murdoch to take overall control of BSkyB by consolidating his European pay-TV businesses, the Sunday Telegraph said. Ofcom would oppose such a deal on plurality grounds despite Murdoch dividing his TV and newspaper businesses last year. People familiar with Ofcom's thinking said that because Murdoch controls both businesses the split would not let him bypass regulator hurdles. Murdoch abandoned a bid to buy all of Sky in 2011 but deals to merge his European TV assets could be structured in a way to give him control of the UK company.The Bank of England is likely to indicate this week that interest rates will rise before the next general election, the Sunday Times reported. The BoE's inflation report, published on May 14th, is expected to increase the forecast for this year's economic growth to 3.5% or more from 3.4% in February. The paper said BoE Governor Mark Carney was set to "rubber stamp" market expectations of a rate rise in the first quarter of 2015.BT plans to disrupt the mobile phone network market this year in the same way that it has aggressively sought market share in television sport, the Sunday Telegraph reported. Chief Executive Gavin Patterson said: "Customers can see that we'll be able to shake up the market, be that the business market or the consumer market." BT will re-enter the mobile network market within three months for businesses and in the consumer market by next April. It will challenge existing operators Vodafone, O2, Three and EE, raising the prospect of a price war.Anite is in talks to sell its travel business to Lloyds Banking Group's private equity arm, the Sunday Telegraph said. The FTSE 250 software group is in exclusive discussions with Lloyds' LDC to sell the division for about £40m. The business sells software for online bookings in the leisure sector.Premier Oil's head of exploration has told the company he plans to leave in a further sign of board upheaval that could expose the explorer to a takeover, the Sunday Times said. Andrew Lodge, in the post since 2009, will follow former Chief Executive Simon Lockett in resigning from Premier. The company rejected a £3bn merger proposal from Ophir Energy last month and Enquest, a North Sea producer, is mulling an approach.Lonmin, the world's third-biggest platinum miner, is losing £1.8m a day and may have to close mines if a strike by South African workers is not settled soon, the Sunday Times reported. Chief Executive Ben Magara will spell out the warning on May 12th as he announces a big loss for the first half of the year. The strike, which also affects Anglo American and Impala Platinum, has been running since January and is the longest ever in the industry. Lonmin, 25% owned by Glencore, is expected to say it could shut some of its 18 shafts if operations do not resume soon.Virgin Money is close to appointing two investment banks to work on a flotation next year, the Sunday Times reported. The challenger bank, with more than 4m customers, will be valued at between £1.5bn and £2bn. It will join a wave of new lenders selling shares on the stock exchange, including One Savings Bank and Aldermore. Richard Branson's Virgin owns 47% of Virgin Money.Carphone Warehouse and Dixons are expected to announce their merger on May 15th after two months of talks, the Sunday Telegraph said. The all-share deal will be structured as an effective takeover of Dixons by Carphone to create Carphone Dixons Plc. The existing retail brands will not be affected and the combined company will enter the FTSE 100 index.Retail tycoon Philip Green is buying a 25% stake in Mysale, an Australian online clothes store that plans to float in London. The deal will be Green's first involvement in a stock market-listed company for more than 25 years, the Sunday Times said. Mysale has 10m members and is Australasia's and Asia's biggest provider of online "flash" clothing sales. It wants to take advantage of London investors' enthusiasm for online retailers.