Wednesday newspaper round-up: Orange/T-Mobile, Cadbury, Burberry

9th Sep 2009 06:09

The planned merger of Orange and T-Mobile faces an uphill battle to convince competition authorities that the creation of Britain's biggest mobile phone company should be allowed to proceed.Independent competition lawyers questioned whether a super operator with 29.1m customers and a 39% revenue share would be accepted ? while both companies are considering possible concessions to ease the deal's passage, the Times reports.Meanwhile, Vodafone and Telefónica of Spain are under mounting pressure to strengthen their positions in the UK after France Telecom and Deutsche Telekom set out plans to create Britain's leading mobile phone operator, adds the FT. Analysts voiced fears about the vulnerability of Vodafone's UK business and Telefónica's O2 subsidiary after the publication of plans for a joint venture between France Telecom's Orange UK and Deutsche Telekom's T-Mobile UK.Hershey has appointed JPMorgan to advise it on its options as the American confectionery group considers a counterbid for Cadbury in the wake of Kraft's £10.2 billion offer. Shares in Cadbury closed up 3p at 786p as traders continued to bet on a higher offer, either from Kraft or from another bidder such as Hershey, which is seen as a possible partner for Nestlé, the Swiss multinational, in any counterbid, the Times writes.The global regulatory crackdown in the wake of the financial crisis is likely to cut long-term profitability at US and European investment banks by nearly a third, forcing them to cut bonuses and shed staff, says a study by JPMorgan. The report, a copy of which has been seen by the FT, takes a deeply pessimistic view of the impact of regulatory changes that include tougher capital rules for trading and a push to trade derivatives on exchanges. It calculates that investment banks' return on equity will fall from 15% to just under 11% in 2011, the FT reports.Economic output in Britain has grown for the first time in 15 months, according to the National Institute of Economic and Social Research ? with carmakers the latest to deliver a fillip. The institute's quarter-on-quarter GDP estimate turned positive, with output in the three months to August up by 0.2% compared with the three months to May, the Times reports. A growing political consensus on the need to cut public spending as the UK economy recovers is set to preserve Britain's top-notch triple A credit rating. Moody's, the rating agency, will announce on Wednesday that a downgrade is unlikely even though Britain's budget deficit will soon be the worst among advanced economies. The rating agency will say the rise in debt appears affordable, particularly given signs that all parties now agree on the need to reduce public spending, the FT reports. Liabilities in defined benefit workplace pensions in the UK have broken through the £1 trillion mark. Deficits - liabilities minus assets - worsened during August by £16bn to £195bn, while the value of the FTSE All-Share Index rose by 7.1%. This time last year, deficits stood at just £93bn. The PPF said 6,304 schemes are now in deficit - representing 85% of the total, the Telegraph reports.One of Britain's top bankers has thrown his weight behind claims that much of what investment banks do is "socially useless". In a speech at the Banking in the Process of Change Conference in Frankfurt on Tuesday, Stephen Green, chairman of HSBC, called for a cultural overhaul among banks, including an end to "excessive" bonuses, to ensure markets are more socially responsible and less obsessed with short-term profits, the Telegraph reports.A group of 72 former Dresdner Kleinwort traders have sued the bank's new owner Commerzbank claiming it reneged on tens of millions of pounds of guaranteed bonus payments. Eight of the traders, who worked for Dresdner Kleinwort in the City of London until it was sold to Commerzbank in September, are claiming bonuses in excess of €1m, with the disputed payments totalling around €34m, the Times reports.Burberry is poised to enter the FTSE 100 for the first time, in a further sign of its revival under chief executive Angela Ahrendts, who took the helm in July 2006. The luxury fashion retailer, best known for its check patterns, is set to join the London Stock Exchange's premier listing tomorrow, following the move by the media group Thomson Reuters to end its London listing, the Independent writes. Tens of billions of pounds will have to be raised through flight taxes to compensate developing countries for the damage air travel does to the environment, according to the Government's advisory body on climate change. Ticket prices should rise steadily over time to deter air travel and ensure that carbon dioxide emissions from aviation fall back to 2005 levels, the Committee on Climate Change says, reports the Times.