Sunday newspaper round-up: Npower, LSE, Greece, Northern Rock ...

3rd Jul 2011 11:22

Npower, one of Britain's biggest electricity suppliers, could be sold for up to £5 billion after its German owner, RWE, hired Goldman Sachs to review its future, The Sunday Times reports. Insiders said RWE is now considering a sale because of its hefty debt burden, the need to invest billions in a new generation of green power stations and a dissatisfaction with British energy policy. An auction of Npower would shake up the electricity and gas market. The company provides gas and electricity to 6.8m homes, generates 8% of the UK's electricity, and employs 11,000 staff. Iberdrola, the Spanish power company that owns Scottish Power, is regarded as a likely buyer.Two of the London Stock Exchange's (LSE) 10 biggest investors have indicated that they would like Robert Webb and Dame Janet Cohen to leave the board at the bourse's annual meeting later this month, the Sunday Telegraph believes. The two shareholders, combined with another in the top 20 of the bourse's share register, have aired their dissatisfaction because the pair have both been on the board for 10 years and can no longer be considered independent directors. The pair are also being targeted because of their high pay. The disaffection with the two directors is likely to spread to other board members, including the chairman, Chris Gibson-Smith, after the failure of the proposed merger with the Toronto exchange owner TMX. Meanwhile, the Sunday Times suggests that US exchange, NASDAQ, is plotting another crack at taking over the LSE. Bob Greifeld, the NASDAQ chief executive, is said to have asked his senior executives to dust off their files on the LSE, which he attempted to buy in 2006. Financial markets are braced for renewed turmoil this week amid growing doubts about the complex rescue plan for the debt-burdened Greek economy, The Observer newspaper claims. Analysts say it is likely that ratings agencies could still brand the plan a default. That would trigger chaos in world markets, as investors were forced to slash the value of their Greek debts - and could also lead to Portugal and Ireland, the other bailed-out eurozone states, having their debts downgraded.Paragon, the £600m specialist buy-to-let lender, is among the parties that have asked for information on the sale of the nationalised bank, Northern Rock. Buying Northern Rock would double its size overnight and enable it to convert into a full-scale bank, the Sunday Times says. Industry sources said Paragon could become a serious contender to table a bid, alongside Coventry building society, Virgin Money, Co-op Financial Services and bank buyout vehicle NBNK.One of Britain's leading investors, Richard Buxton, the head of UK equities for investment giant Schroders, has warned the Treasury that the danger of regulatory overload on UK banks is threatening British economic growth and is based on no clear understanding of the impact the rule changes will have. According to the Sunday Telegraph, Buxton said regulatory uncertainty meant that billions of pounds of investment could potentially be witheld from the sector. This would make it more difficult for banks to hit new capital rules being imposed by global regulations and lending targets to business to support UK growth. An investment bank embroiled in a potential fraud investigation that counts former England football manager Sven-Göran Eriksson among its victims has missed another self-imposed deadline to return millions of pounds to shareholders. First London Group, the holding company of former London-listed First London, wrote to shareholders in May saying they would be able to cash in their investments by 30 June, the latest in a series of expired deadlines. Shareholders were first promised a £173m payout in October 2009 when First London Group announced that the bank's assets had been sold to a mysterious company called Swiss Commodity Holding (SCH). Investors have still to receive a penny, the Observer observes.--jh