Wednesday newspaper round-up: BP, Argos, Stobart

1st Feb 2012 06:44

The Ministry of Defence will no longer give UK companies priority over their foreign competitors when buying equipment and weapons for the armed forces.The only exceptions will be cases where buying British is essential to maintaining national security, Peter Luff, the defence procurement minister, said in an interview. He made clear the MoD would not consider wider employment or industrial economic factors when it assessed whether a piece of equipment offered value for money, The Financial Times reports. Influential shareholder group PIRC has urged investors not to back a controversial £100m property transaction planned by transport group Stobart. The company has announced it is to buy a portfolio of properties from directors and shareholders Andrew Tinkler and William Stobart. Under the terms of the deal released in a shareholder circular, Stobart will pay a total of £103.8m to buy a portfolio of properties valued at £93.5m. A second valuation carried out under "special assumptions of no purchaser's costs" produced a higher figure of £98.9m. The company used the second valuation in its stock market announcement on the acquisition. PIRC claimed there were "inherent conflicts of interest in the transaction" and raised concerns that the "independent directors had provided no basis to their conclusion that the acquisition had a fair price," The Telegraph writes.He is hardly a big name even among retailers, but an American who got his big break selling groceries online will try to lead a revival at Argos. The appointment of John Walden as chief executive is set to be announced today. His task will be to invigorate a company that has suffered falling sales since 2008 and is under pressure from the City to cut the number of its stores. Argos's plight is central to the prospects of its parent company Home Retail. With sales of £4bn, it dwarfs its sister chain Homebase and generates more than 70% of group turnover. Last year it contributed more than 6½ times the operating profit of Homebase. Mr Walden, 52, is understood to have impressed executives with his extensive online experience, The Times explains. EasyJet chairman Sir Mike Rake has delivered his strongest rebuttal yet to what he termed the "numerous inaccuracies and attacks on individuals" from the airline's founder Sir Stelios Haji-Ioannou. Sir Mike used a speech at the carrier's investor day in London to hit back at various allegations from Sir Stelios, whose family owns 37% of the shares, over aircraft deals, pay and accounting policies. It followed Sir Stelios' comments about the directors over the weekend when he said: "These guys are welcome to resign anytime." Sir Mike said the management team under chief executive Carolyn McCall had made "enormous and significant progress in the last 20 months". However, Sir Stelios had "chosen to continuously attack the company in various ways and increasingly personalise those attacks on individuals," according to The Telegraph. BP suffered another setback in its attempts to share the costs of the Gulf of Mexico disaster, as a US court ruled it must shield its contractor Halliburton from some damage claims. The decision by District Judge Carl Barbier echoed the terms of his ruling last week that BP must indemnify rig-owner Transocean over some claims. However, as in that ruling, BP will not have to cover Halliburton for civil penalties or punitive damages under the Clean Water Act. The rulings mean it is likely BP will have to shoulder about $15bn (£9.5bn) of costs related to the $20bn compensation trust fund itself. BP had budgeted for the full $20bn but has effectively recouped $5bn through settlements with other companies and has been attempting to make Halliburton and Transocean pick up a share of the costs, The Telegraph says.Water and sewerage bills are to rise by an average of £20 a year from April to £376, the regulator Ofwat has said. The top-line figure hides variations across the country, with customers at Southern seeing the biggest rise of £31 taking the average bill to £416. At the other end of the scale, Severn Trent will increase bills by an average £16 to £325. Of those handling water only, the biggest increase will be in Bristol where bills are set to rise 8.8% or £15 to an average £181. Veolia Central customers face a rise of just 1.8%, or £3 per year, taking the average bill to £174. The average rise will be made up of November's retail prices index of 5.2%, plus 0.5%. Ofwat said it will allow some companies to increase prices by more than 5.7% because they need funding for continuing investment. The regulator announced a five-year plan of annual rises in 2009 to help fund £22bn of investments, The Times reports. BP expects its Foinaven oilfield off northern Scotland, which accounts for 15% of its UK production, to remain shut for weeks while it investigates a "small" oil leak. The company stopped production at the 43,000 barrels per day (bpd) field, 120 miles west of Shetland, on Sunday after finding an oil and water mixture leaking from a fitting on a seabed pipe. BP said it stopped the leak within 50 minutes, but did not know when the leak began or the volume spilled, as the last check had taken place 12 days previously. It is thought tens of barrels a day could have leaked, The Telegraph says. AB