Sunday newspaper round-up: IAG, North Sea, Morrisons

11th Jan 2015 19:53

International Airlines Group (IAG) may have to pay as much as €1.6bn to buy Aer Lingus, one of the Irish airline's biggest shareholders told the Sunday Telegraph. Richard Bernstein, investment adviser at Crystal Amber, which owns 2.8% of Aer Lingus, called on AIG to bid up to €3 a share after a €2.40 offer was rejected. Bernstein said Aer Lingus was right to rebuff AIG and that the target company was worth at least €2.75. He said IAG boss Willie Walsh had a record of returning with a higher bid and that strong trading by Aer Lingus had underlined its value.George Osborne is working on a tax cut to support investment in North Sea oil, the Sunday Times reported. The Chancellor told the paper more action was needed after the falling oil price caused a drop in North Sea drilling and a spate of job and pay cuts. Osborne said he was considering an announcement at the budget in March. Proposals include scrapping a supplementary corporation tax and simplifying allowances and tax breaks. The Sunday Telegraph reported that Premier Oil, Cairn Energy and Tullow Oil were not deviating from recent market guidance ahead of imminent trading updates. Morrisons is expected to be the biggest Christmas loser of Britain's major supermarkets, according to the Sunday Times and Sunday Telegraph. The chain's festive sales are expected to have fallen 3.8% when it updates the market on January 13th. The fall is expected to improve on the 6.3% drop in the previous quarter and a 5.6% slump last Christmas. Former Tesco executive Andy Higginson is likely to be join as Chairman earlier than June, when he was due to take over, the Sunday Times said. Higginson is likely to review the business and its dividend. Marks & Spencer Chief Executive Marc Bolland told the Mail on Sunday the company was united behind his strategy and that it would bounce back from bad Christmas trading figures. Investors are growing impatient with Bolland after M&S failed to revive its clothing sales over Christmas and online revenues disappointed. "The company is completely unified behind this strategy. We are pulling the right levers and will certainly be able to improve on the performance we saw in December," Bolland told the paper. He said improving profitability in clothing was more important than increasing short-term sales. Tesco has suspended a ninth executive in connection with the £263m accounting scandal at the supermarket group, the Sunday Telegraph said. The manager in question is Chris Robinson, a finance director in Tesco's food sourcing division, the paper alleged. Robinson is alleged to have been suspended in December, highlighting how the accounting irregularities continue to loom over Tesco even after Chief Executive Dave Lewis announced plans to restructure the group. Bank of England (BoE) Governor Mark Carney will have to write to the Chancellor to explain why price rises have fallen below target after the BoE reveals that the annual inflation rate has dropped to less than 1%, the Sunday Times reported. Inflation fell to 1% in November but figures on January 13th will show a sharp decline in the annual rate for December. Carney's open letter to George Osborne will be the first time since the BoE gained independence on monetary policy in 1997. The UK's biggest online retailers have warned that Black Friday will be bigger next year despite some companies expressing hopes that last year's extreme discounting would not recur, the Mail on Sunday said. Alex Baldock, Chief Executive of Shop Direct, whose brands include Littlewoods, said Black Friday had "fundamentally changed how people shop and he was planned to step up activity for this year's event. Figures from Barclaycard suggest deep discounts did not increase total seasonal sales for some retailers because shoppers bought early for less. Petrol retailers will use a meeting with Treasury Minister Priti Patel to call for an immediate reduction in fuel duty to enable further falls in prices at filling stations, the Mail on Sunday reported. Patel will meet the Petrol Retailers Association (PRA) on January 13th. Brian Madderson, PRA Chairman, will tell her that though the falling price of oil has pushed down pump prices fuel taxes of 75% on a litre were near unsustainable levels. The near halving of the oil price in the past six months could provide a powerful boost to the UK economy and increase household spending power by billions of pounds, the Sunday Telegraph reported. If oil falls to $40 a barrel soon, UK GDP could gain by 0.6% this year, according to Oxford Economics. Ben Whawell, Chief Executive of logistics group Stobart, said fuel savings in transporting goods would eventually lead to lower prices for everything delivered to shops around the country, including food staples. Cheaper fuel could therefore help the UK's beleaguered supermarkets as well as households. Countryside properties has hired the former finance director of Lastminute.com as chairman to prepare for a likely flotation next year, according to the Sunday Times. The housebuilder, owned by private equity firm Oaktree Capital, is expected to name David Howell as Chairman. Ian Sutcliffe, executive chairman since Oaktree's buyout two years ago, will be chief executive. Sutcliffe said a float was very unlikely in 2015. Kurt Geiger, the upmarket footwear and accessories brand, increased sales over Christmas by 14%, the Sunday Times reported. The company doubled its online sales of shoes on Christmas day to 6,000. Delaying Kurt Geiger's sale by a week to December 19th improved profitability because it did not offer customers discounts to bring in revenues. Markets are betting that Greece will default on its debt as Syriza, the anti-austerity party, leads in the polls for this month's general election, the Sunday Times said. The yield on short-dated Greek government bonds has hit 13%, meaning it is effectively impossible for the Government to raise money in the bond market. Investors sold the bonds last week and Greeks have been withdrawing cash from banks in advance of the election. A banker involved in Greece's most recent debt sale said: "The country is in clear distress." UBS's long-running leadership in corporate broking is under threat after the Swiss bank lost two more prestigious clients, the Sunday Times said. BAE Systems has switched to Morgan Stanley in recent days and Smith & Nephew is also set to enlist a Wall Street firm instead of UBS. Anglo American and Standard Chartered have also found new corporate brokers in the last few months. Rivals have aggressively targeted UBS corporate broking clients after the bank was weakened in the financial crisis. Salaries and bonuses at Goldman Sachs are expected to be more than $430,000 per employee for last year, according to the Sunday Times. The most powerful Wall Street investment bank typically pays out 40% of revenues to its staff. With revenues forecast at $34.4bn, Goldman's 32,000 employees shared almost $13.9bn for last year. The scale of the pay-outs could restart the debate about the amounts earned by those working in financial services. SF