Cityam 2012-04-13

G
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BUSINESS WITH PERSONALITY
Google plots
share split as
profits surge
INTERNET giant Google last night
announced a two-for-one stock split
to ensure co-founders Larry Page
and Sergey Brin retain control over
the company.
Investors will receive one share
of new stock for each existing
Google share that they own. The
new stock will be listed on Nasdaq
under a separate ticker and will
have no voting rights, enabling
Page and Brin to retain control.
The surprise decision came as
the company announced profits of
$2.89bn (£1.8bn), a 60 per cent rise
year-on-year that exceeded
expectations, but also revealed a
worrying 12 per cent drop in
search advertising rates – the
company’s main source of income.
“When we went public, we
created a dual-class voting
structure. Our goal was to
maintain the freedom to focus on
the long term by ensuring the
management team retained
control over Google’s destiny,” Page
explained. “By investing in Google,
you are placing an unusual long
term bet on the team, especially
Sergey and me, and on our
innovative approach,” he added.
Net revenue, excluding fees paid
to partner websites, hit $8.14bn in
the first three months of 2012,
compared with $6.54bn in the
same period last year. Britain
accounted for $1.15bn – or 11 per
cent – of the company’s income
during the quarter.
The news came as Page marked a
year since he returned as chief
executive. Since then he has led the
$12.5bn takeover of Motorola’s
mobile phone business and
launched the social network
Google Plus.
Business secretary Vince Cable has again voiced doubts about government economic policy
GEORGE Osborne’s plan to cap tax
relief on charitable donations will cost
good causes billions of pounds, the
City warned last night, as a series of
senior MPs fed a growing political
revolt.
Investment manager Brewin
Dolphin and accounting firm Baker
Tilly spoke out against the proposal
while business secretary Vince Cable
said he was “sympathetic” to concerns.
Osborne is also under pressure from
the Arts Council and Universities UK
after a survey showed almost nine out
of every 10 charity bosses said gifts
from major donors will be severely hit
if tax relief is capped at £50,000 a year,
or 25 per cent of an individual’s
income, whichever is higher.
Brewin, which manages more than
£25bn, said this policy, which is part
of a drive to close tax loopholes, would
reduce donations by billions of
pounds a year.
Head of corporate affairs Charlotte
Black said: “For centuries the founda-
tions and bedrock of the charitable
sector has been the generosity of those
who see needs in society... The promo-
tion of a ‘Big Society’ and citizenships
runs counter to the financials disin-
centive announced in the Budget.”
George Bull, senior tax partner at
Baker Tilly, said: “The restrictions are
really ill-thought through and will
www.cityam.com FREE
have a lot of unintended effects... It is
wrong to encourage people [to donate]
on the one hand and then brand gen-
erous donors as tax avoiders.”
The political fall-out grew yesterday
as David Davis, the former shadow
home secretary and a senior Tory back-
bencher, called for a re-think while a
spokesman for Cable, a Liberal
Democrat, said: “Concerns have been
raised with ministers, including Vince,
by universities and he’s sympathetic to
those concerns.”
The row has sparked predictions of
another coalition u-turn, after changes
on policies including sentencing dis-
counts for guilty pleas, the forests sell-
off and cuts to school sport.
Iona Joy, head of charity effectiveness
at think tank New Philanthropy
Capital, said: “The government has
made a mistake – don’t confuse phi-
lanthropists with tax dodgers.”
When chief Treasury secretary
BY JAMES WATERSON
FTSE 100 ▲5,710.46 +75.72 DOW ▲12,986.43 +181.04 NASDAQ▲3,055.55 +39.09 £/$ 1.59 unc £/€ 1.21 unc €/$ 1.31 unc
ISSUE 1,611 FRIDAY 13 APRIL 2012
GRAND NATIONAL
SWEEPSTAKE KIT
See Page 33
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30/01/2012 till 26/02/2012 is 98,573
Danny Alexander was asked if there
would be a u-turn on the cap he told
the BBC “everyone should pay a
decent proportion of their income in
tax”.
He left the door open to a change
however, saying the coalition would
work with charities and philanthro-
pists to ensure the cap does not have a
“significant impact” on bodies which
depend on large donations.
CHARITYRAIDSET
TOCOST BILLIONS
BY PETER EDWARDS
City warns of damage to good causes as Cable calls for a rethink
SONY’SRISE ANDFALL
MAKER OF THE ICONIC WALKMAN IS FLOUNDERING
[email protected]
Follow me on Twitter: @allisterheath
IN BRIEF
North Korea launches rocket
nNorth Korea launched a rocket late
last night, although it is believed to
have crashed into the sea. The launch,
which took place at 11.39pm UK time,
was officially to carry a weather
satellite but has drawn international
criticism and sabotaged a food aid
deal with the United States. Critics say
the Unha-3 rocket would enhance
Pyongyang's ability to build a missile
capable of delivering a nuclear
warhead.
Report heralds US bank shake-up
nUS banks have been told to split the
roles of chairman and chief executive
in an attempt to avoid the threat of
another financial crisis in a report by
the Group of Thirty, an international
forum of regulators, central bankers
and private bank bosses. The report
blamed “pervasive failure of
governance at all levels” as a large
contributor to the 2008-2009
financial crisis.
Brazil bid for BG stake in Comgas
nBrazil's Cosan is in talks to buy
British BG Group's stake in the gas
distributor Comgas, in a deal that
would further diversify the Brazilian
energy group. BG and Cosan
confirmed yesterday their
negotiations over BG’s 60 per cent
stake in Comgas, Brazil's largest gas
distribution company, without
mentioning the value of the deal.
Their statements followed a report by
Brazilian magazine Exame that the
companies were discussing the sale of
BG's stake for 2.5bn reais (£857m).
G
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OECD predicts decades of
austerity lie ahead for UK
THE UK faces decades of more aus-
terity in order to bring its spiralling
debt under control and offset any
impact on growth, influential think
tank the Organisation for Economic
Cooperation and Development
(OECD) has warned.
The Paris-based group calculates
annual spending cuts and tax rises
amounting to eight per cent of GDP
a year – an estimated £120bn annu-
ally – for the next forty years are
required by the UK in order to
reduce debt to what it calls a “pru-
dent level”.
The OECD recommends that all its
34 developed country members
slash debt to 50 per cent of GDP by
2050 – giving them room to
respond to future crises and pre-
venting debt restricting growth – a
level which it deems happens at 70
per cent of GDP.
Its analysis indicates the UK will
have to suffer far worse cuts than
many of its Western counterparts
with only Japan, New Zealand, the
US, Luxembourg and Ireland facing
more severe cuts.
It warns that the problem will be
exacerbated as countries start to
unwind emergency measures put in
place at the height of the financial
crisis. In the UK, where interest
rates remain at their historic low of
EU seeks new curbs on bonuses
Bankers’ bonuses across Europe would be
capped at no more than their fixed
salaries under strict new curbs sought by
senior lawmakers in response to
continued public anger over financial
sector pay. EU parliamentarians are
drawing up new caps on bonuses to be
included in the latest bank capital rules.
Tesco to focus on smaller stores
Tesco is poised to slow its store expansion
in the UK as part of the strategic blueprint
to be outlined next week by new chief
executive Philip Clarke. The company is
expected to scale back openings of big
stores and store extensions, focusing
instead on smaller stores. The move is
expected to prompt other supermarkets
to follow suit, ending the so-called “race
for space” among UK grocers.
Ireland and France target Olympics
Ireland and France are luring teams from
across the globe for pre-Olympics training
camps. Swimmers from 13 countries have
signed up to train at Ireland’s national
aquatic centre and Pas-de-Calais, in
northern France, will host four countries.
Lloyds to dump fund managers
Lloyds Banking Group is dumping more
than half of its fund managers. Scottish
Widows Investment Partnership, which
manages £143bn for savers and investors,
is shutting down a string of its regional
investment desks.
Flora’s cottage in Scottish hotel sale
A cottage that was home to Flora
MacDonald – the Jacobite heroine who
helped Bonnie Prince Charlie escape
following the Battle of Culloden in 1746 —
is up for sale. It is now a hotel.
Royal Mail limits supply of stamps
Royal Mail is limiting the number of
stamps it supplies to retailers to ensure it
profits from record price rises later this
month. High street chains and post offices
said they were running out of stamps as
people began stockpiling them.
Temporary staff harm your health
Working with temporary staff harms your
health and wealth and can drive down
permanent wages by 5 per cent, according
to a new report from the National Institute
of Economic and Social Research.
Hollande Attacks Sarkozy's Record
French presidential challenger François
Hollande attacked Nicolas Sarkozy's
economic record yesterday, after the
President seized on Spain's rough ride in
financial markets to say a Socialist would
put France on the same track.
Spanish Budget Law Progresses
Spain's plan to toughen the central
government's control of regional finances
passed its first legislative hurdle in a
parliamentary vote Thursday. It develops
budget guidelines that Spain last year
enshrined in its constitution.
WHAT THE OTHER PAPERS SAY THIS MORNING
ITALIAN bank stocks dropped
sharply yesterday after renewed
worries about the government’s
ability to pay its debts pushed up
state borrowing costs.
Greece’s economic nightmare
continued as official data showed
unemployment increased to a
record high of 21.8 per cent in
January, and youth unemployment
hit 50.8 per cent.
Meanwhile UBS analysts warned
that the crisis is one of solvency
and so cannot be solved alone by
the liquidity pumped into the
system by the European Central
Bank.
The Italian government raised
€2.88bn in three-year bonds at a
yield of 3.89 per cent – sharply up
on the 2.76 per cent at a similar
auction last month.
Shares in UniCredit dropped 3.4
per cent after the auction, but
picked up later as markets around
the world jumped on hopes that
the Fed may boost its quantitative
easing program.
New York Fed boss William
Dudley said the economy is not yet
“out of the woods,” hinting that
the central bank could step in
with more support if necessary.
The Dow Jones rose 1.41 per
cent, FTSE100 jumped 1.34 per
cent and German DAX rose 1.03
per cent by the end of the day.
Investor fears
force Italian
debt yields up
The OECD’s report provides support for chancellor George Osborne’s deficit cuts programme
2
NEWS
BY TIM WALLACE
BY KATIE HOPE
The new jobs website for London professionals
To contact the newsdesk email [email protected]
CITYAMCAREERS.com
I
T has become increasingly difficult
to understand what the coalition
government is up to. Take its
decision to demonise those who
donate large amounts to charity,
depicting them in a grossly unfair
manner as tax avoiders who should
be ashamed of themselves. This is an
astonishingly stupid and nasty thing
to imply. The government claims that
some charities are dodgy. But if this
is true then the obvious answer is to
get the Charity Commission to do its
job more thoroughly, not demonise
all donors.
What really angers me is that the
coalition is misrepresenting how tax
relief works – it is implying that it
helps donors line their own pockets.
But the facts are clear. A wealthy indi-
vidual who earned a £1m bonus
would ordinarily pay £520k in tax
(assuming the bonus is wholly within
EDITOR’S
LETTER
ALLISTER HEATH
Government wrong to demonise generous philanthropists
FRIDAY 13 APRIL 2012
the 50p tax rate and including
employee national insurance) and
keep £480k. But if they gave £100,000
of this away, they would be able to
reclaim £37,500 in tax relief from
HMRC and end up paying £482,500 in
tax and keeping £417,500. In other
words, they would lose £62.5k in take-
home pay and be able to allocate
some of their tax bill to a cause close
to their heart (the charity would also
be able to reclaim some extra money
from HMRC). But the crucial and obvi-
ous part is that the philanthropist is
not better off – he or she is worse off.
His or her take-home pay is down, not
up. That is because he or she is being
generous, not engaging in a cynical
act to defraud the taxman. Is this gov-
ernment financially illiterate?
Charity relief works differently to
some other tax reliefs: by putting
money in their pension, which
remains their property (though they
cannot touch it until they retire) tax-
payers end up paying substantially
less tax than they would otherwise
have paid, and are therefore better
off, post-tax, than if they kept the
cash in their bank accounts. But char-
itable donations require a real sacri-
fice, regardless of tax relief. These
attacks on generous folk – including
many who work in business and the
City – are truly astonishing. Whoever
came up with such a strategy and
Apparently, it feels that some EU-
based charities are dodgy, but that EU
rules mean it cannot do anything
about this. If so, why doesn’t it say so?
It’s like the pasty tax: The government
felt that it had to hike taxes on pasties
to avoid an EU ruling that could have
forced it to cut Vat on other warm
food, such as fish and chips, and hand
over billions in compensation. But if
the EU is the problem why doesn’t it
tell anybody? No wonder Ukip is surg-
ing in the polls (it is at 11 per cent in
one), and Labour is substantially
ahead. When it comes to own goals,
the charity row is even more stagger-
ing than the coalition’s vicious
“green” plan to penalise those seek-
ing to build conservatories. What,
exactly, is this government up to?
thought it would be good PR for the
government ought to be taken out
and fired – immediately.
There is a good case to be made that
in a drastically reformed system, with
much lower tax and spending as a
share of GDP, there would be no need
for any reliefs. I have long supported a
flat tax where – above a generous per-
sonal allowance – everybody pays the
same, low rate on all labour and capi-
tal income. But that would be dramat-
ically different to what is on offer
today, and would trigger an explosion
in wealth creation and charitable
donations. The government, however,
is not implementing such a reform –
it is merely misrepresenting the
motives of those building the Big
Society it once purported to believe in
in a desperate bid to raise more tax.
Another explanation for the coali-
tion’s folly is doing the rounds.
0.5 per cent, it warns of a potential
“snowball” effect whereby an increase
in rates will see an equivalent jump in
debt servicing costs and a consequent
increase in public debt levels, if action
is not taken.
Average interest payments for OECD
member countries were 2.5 per cent
of GDP in 2007, but the think tank
says this could almost double to four
per cent by 2026.
“In the absence of corrective action,
higher interest rates could lead to sub-
stantial increases in debt, particularly
in high debt countries such as Japan
and Greece but also for those coun-
tries running large structural deficits
such as the UK, Ireland, New Zealand
and the US,” it says.
However, the OECD warns that cuts
should be implemented gradually so
as not to retard growth.
Its recommendations for reducing
debt levels include public health
reform and reductions in public sec-
tor wages to bring them in line with
those in the private sector, as well as
the introduction of a sales tax on
financial services, and removing tax
relief in some areas.
NDLGBR IRL LUX USA NZL JPN
How much consolidation is needed?
12
8
10
6
4
2
0
%of GDP
BORIS Johnson will this morning
launch a bid to take direct control
of Tech City Investment
Organisation, the development
body responsible for promoting
high-tech investment in East
London, City A.M. can reveal.
The mayor will also seek the
construction of a new science
institute in the Olympic Park and
seek to include a proposed cell
therapy centre in the plans.
“We are seeing incredible things
starting to happen in Tech City
and the area known as Silicon
Roundabout. But there has never
been a better moment for City
Hall to take a strategic lead,” the
mayor is expected to say at this
morning’s InnoTech Summit.
Mike Butcher, co-founder of
TechHub, a shared workspace near
Old Street roundabout, broadly
welcomed the news: “What we’re
talking about here is beating the
drum for technology in London –
bringing in investors and
supporting the organic creation of
companies in the area.”
But he said that politicians
should provide more incentives to
invest in the district: “We would
love to see this area given special
status. There was disappointment
that the Tech City area was not
made an enterprise zone.”
Boris Johnson
wants to take
over Tech City
BY JAMES WATERSON
THE FALLOUT from the Lehman
Brothers bankruptcy has netted its
administrator PwC almost half a bil-
lion pounds in fees since it was
appointed in September 2008.
In a progress report released this
morning, PwC said the total remuner-
ation paid since the start of the pro-
ceeding had reached around £495m
by the 12 March this year – with
administrators billing almost 230,000
hours in the past six months alone.
The latest update also gave the
clearest sign yet that European
lenders to Lehman Brothers could
see some of their money returned
this year, with PwC saying it was tar-
geting the first payments to cred-
itors before the end of 2012.
But just how much the
administrators expect to recov-
er is still up in the air, with
ballpark figures for the poten-
tial total claims ranging from
£14.7bn to £47.9bn.
As the total
amount that
Lehman fallout
earns £500m
for PwC so far
will be recovered is predicted to come
in at a maximum of £13.4bn, the
worst-case scenario would see just 28
per cent of claims returned to credi-
tors.
To date, only 2,372 of an estimated
5,350 outstanding claims have been
submitted to Lehman Brothers
International (Europe) – the US bank’s
principal UK trading company.
Though creditors have until 31
December to submit, they must meet
an earlier deadline to be in with a
chance of receiving a payout this year.
The news comes as US creditors of
the bank were told it would start the
first round of paybacks next week,
with a total of $22.5bn (£14.1bn) avail-
able for distribution. The figure
is significantly higher than
the $10bn estimated last
month, when Lehman
Brothers Holdings was offi-
cially taken out of bank-
ruptcy proceedings in the
US and its winddown began.
Dick Fuld was chief exec
of Lehman when it folded
BORIS Johnson yesterday blocked a
Christian advertising campaign
that promoted “gay conversion”,
saying that London should be
“intolerant of intolerance”.
The advert, funded by religious
groups opposed to gay marriage,
was due to appear on public buses
during the next two weeks and
declared: “Not gay! Ex-gay, post-gay
and proud. Get over it!”
Mayor blocks anti-gay adverts
appearing on London transport
BY ELIZABETH FOURNIER
Johnson used his position as
chairman of TfL to ban it from the
capital’s buses.
“It is clearly offensive to suggest
that being gay is an illness that
someone recovers from and I am
not prepared to have that
suggestion driven around London
on our buses,” the mayor said.
Labour’s Ken Livingstone backed
the mayor but added: “London is
going backwards under a Tory
leadership that should have made
these advertisements impossible.”
Last night the religious groups
responsible accused Johnson of
censorship, adding that regulators
had cleared the advert.
FRIDAY 13 APRIL 2012
3
NEWS
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Boris Johnson said that London should not tolerate intolerance
G
E
T
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Y
BY JAMES
WATERSON
MAYORAL
ELECTION
SPANISH retail bank Banesto was hit
by a €475m (£392m) provision for
bad real estate loans, it reported in
its first-quarter results yesterday.
Banesto, which is mostly owned
by Santander and is one of Spain’s
biggest high street lenders, reported
a halving in pre-tax profits to
€126m. That was above expectations
despite the massive property hit
and a further €366m writedown
from other bad loans.
The bad loans will stoke fears that
Spain’s housing crisis is still crip-
pling its banks as stricter regulations
force them to take further and fur-
ther writedowns on their toxic prop-
erty books.
Banesto warned that there is
more to come: it said that it has
now taken half of the property
writedowns required of it this year
by new Spanish regulations,
suggesting that further losses to the
tune of half a billion are in the
pipeline.
Along with the losses from its
property book, Banesto’s overall
loan book deteriorated in quality
compared to the last quarter of
2011, with non-performing loans
(NPL) growing from 4.68 per cent to
4.93 per cent. However, the bank
said the outlook for the industry is
worse still, with an average NPL rate
of 7.91 per cent.
Half a billion
property hit to
Banesto profits
BY JULIET SAMUEL
G
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Y
NBNK Investments has leapt back into
the fray by sending in a new bid for
632 Lloyds branches, as the deal to sell
them to the Co-op appears close to col-
lapse.
The bid, which values the package
of assets at between £1.5bn and £2bn,
is designed to make Lloyds think
twice about continuing with its strug-
gle to offload the business to the Co-
op. The mutual has come under fire
for not yet having a chief executive or
experienced management team in
place to run the bank, although the
NBNK goes on
offensive for
Lloyds branches
BY JULIET SAMUEL
Co-op Group insists it has a plan for
finding a CEO.
In its bid, NBNK, which recruited
former Northern Rock chief executive
Gary Hoffman as its boss and has Lord
Levene as chairman, boasted that it
“has considerable regulatory, gover-
nance and management experience”
to get the deal done. One senior bank-
ing source called it “a board to die for”.
It offered to do the transaction as a
demerger 100 per cent underwritten
by NBNK, which is backed by institu-
tions that include Invesco, Aviva, JP
Morgan, F&C and BlackRock.
The offer means that the sharehold-
ers of Lloyds, 40 per cent of which is
owned by taxpayers, could either take
cash or shares in the new venture.
If the Co-op deal collapses, however,
Lloyds could continue preparing its
branches for a flotation alongside nego-
tiations with NBNK because setting up
a self-standing payments system will be
required either way. NBNK said that it
has FIS on board to help it do this.
Lloyds is still in exclusive negotia-
tions with the Co-op but is close to a
final deadline for closing the deal.
TIMELINE | LLOYDS BRANCH SALE
Portugal’s biggest
bank to raise €1bn
UniCredit
new chair
SHARES in Portugal’s biggest listed
bank plunged yesterday morning
after it announced plans to raise up
to €1bn (£826m) to comply with
national capital regulations.
Banco Espirito Santo’s (BES) share
price closed down 10.5 per cent at
just over €1, meaning it has now lost
more than half of its value since the
start of 2012 and is worth €1.5bn.
The new shares have been priced at
39 euro cents each.
The rights issue, which will
complete by mid-May, is the second
time the bank has tapped up
BY JULIET SAMUEL investors for cash since 2008.
BES said that it has already
received indications of investor
interest in taking up the rights from
shareholders owning half of its
capital, while the investment banks
running the book have agreed to
take up another 50 per cent if
investors don’t buy them.
The aim is to push its core tier one
capital ratio up to 10.75 per cent,
whereas it is now 9.2 per cent.
Although EU authorities have only
demanded that banks bring the ratio
over nine per cent, the Bank of
Portugal has set a higher minium of
ten per cent.
UNICREDIT, Italy’s biggest bank,
has named Giuseppe Vita as its
new chairman, replacing outgoing
German chairman Dieter Rampl.
Vita, who is also the chairman of
Allianz in Italy, is believed to have
been chosen because of his long
career at German companies,
meaning he has good contacts in
Frankfurt.
The change of leadership, which
will be voted on by shareholders in
May, comes after a turbulent rights
offering by the bank early this year
that saw its value plunge.
Lord Levene’s buy-out vehicle NBNK is trying to claw its way back into the Lloyds deal
IN BRIEF
Santander gets renminbi licence
n Spain’s biggest bank has secured a
licence to trade renminbi in China, mak-
ing it the first Spanish or Latin American
bank to get permission to handle the
Chinese currency. The bank said that the
licence will boost its position as a
provider of trade finance for exporters to
and from China and will enable it to cap-
ture growing trade flows between Beijing
and Latin America. The announcement
coincided with a visit to China by bank
chairman Emilio Botín.
Bank of America streamlines units
n Bank of America has rid itself of one
business unit to streamline its opera-
tions. The move merges its credit cards
business with its retail lending business,
which could enable more cross-selling of
cards to customers. Lending to large cor-
porates will also move from its invest-
ment bank to be combined with its busi-
ness for smaller businesses, the Wall
Street Journal reported.
Sberbank mulls Denizbank bid
n Russia's top lender Sberbank is taking
another look at Denizbank, put up for
sale by stricken Belgian lender Dexia.
Last year, Sberbank dropped out of the
race for Denizbank, now worth $6bn, as
it focused on integrating its acquisitions
of Russian brokerage Troika Dialog. But
now that talks with Qatar National Bank
(QNB) over the sale of Denizbank have
stalled over price, Sberbank is keeping
an eye on negotiations. "We are interest-
ed in entering the (Turkish) market and
are also looking at Denizbank. But we are
not in talks at the moment," a Sberbank
spokeswoman said. However, reports
suggested that QNB has raised its offer,
meaning Sberbank could be left in the
cold.
Lloyds Banking Group PLC
5Apr 4Apr 10Apr 11 Apr 12Apr
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32.50
31.50
31.00
30.50
30.00
p
31.92
12Apr
FRIDAY 13 APRIL 2012
4
NEWS
cityam.com
BOTTOM
LINE
DAVID CROW
Vickers report morphs from a fudge to a whitewash
down this recommendation after
being nobbled by the Treasury. He
conceded that a sale of 632 branches
would be fine, but only if they were
sold to a bidder that already had a
foothold in the UK banking market.
Unless the new bank had a six per
cent share of the personal current
account market, said Vickers, it
would struggle to attract new
customers, allowing the large
incumbent banks to keep their
advantage.
The bank that is being sold by
Lloyds, known as Verde, will only
have a 4.6 per cent share, so the
buyer would ideally have a market
share of around two per cent. Enter
The Co-operative, which was named
as the preferred bidder in December,
but whose offer now looks close to
collapsing.
At the time, the Co-operative
suited everybody. Lloyds wanted to
sell the branches to someone who
already owned a banking network,
because the sale would be less likely
to fall through. Vickers would be
happy because, following the
acquisition, the Co-op would have a
combined 6.6 per cent share. And the
government, which owns most of
Lloyds, was happy to see it go to a co-
operative organisation.
Alas, the Co-operative’s bid is in
serious trouble. Talks with the FSA
are taking far longer than they
should be, suggesting the City
watchdog is concerned about the Co-
operative’s ability to pull off such a
large acquisition. The group is
struggling to appoint a banking chief
executive while its supermarket
business is floundering. Yesterday,
we learned that Lord Levene’s start
up NBNK, beaten in the first round,
is back with a new bid.
If Co-operative does walk away,
Lloyds has two choices. Sell to NBNK
(there are no other serious buyers) or
flog the branches through an IPO.
Neither option will satisfy Vickers’
insistence that the new bank have a
market share of over six per cent.
At any rate, the real reason banks
are so uncompetitive lies in over-
regulation. The rules surrounding
how much and what kind of capital
they must keep against every loan
are so onerous that it is virtually
impossible to compete on price.
The Vickers report, heralded as the
biggest shake-up of banking in a
generation, has gone from a fudge to
a white-wash.
[email protected]
Follow me on Twitter: @davidcrow83
J
UST six months after the
publication of the Independent
Commission on Banking’s final
report, Sir John Vickers’
recommendations on boosting
competitiveness are falling on deaf
ears.
Initially, Vickers recommended in
his interim report that Lloyds be
made to sell “substantially” more
than the 632 branches it is being
forced to put on the block to satisfy
European rules on state aid. Only
then, said Vickers, would a credible
“challenger bank” be created, with
the strength to take on the Big Five:
RBS, Santander, Lloyds, HSBC and
Barclays.
In his final report, Vickers watered
November 2009
It emerged that the EU would force Lloyds
to sell a large chunk of its business to
comply with competition rules following
its merger with HBOS. It set an end-of-
2013 deadline to complete a sale or float.
April 2011
The Independent Commission on Banking
(ICB) said in its interim report that Lloyds
should “substantially enhance” its sale.
Summer 2011
Lloyds kicked off the sale with minimal
regard for Vickers’ demands after the
Treasury made it clear it did not mind.
September 2011
The ICB’s final report substantially
watered down its demands.
December 2011
The Co-op was named as preferred bid-
der over NBNK, the only other bidder.
March 2012
Lloyds admitted it will not meet its first
quarter 2012 deadline for signing a con-
tract with the Co-op.
BY JULIET SAMUEL
THE WORLD’S largest international
banks need to shore up their balance
sheets to the tune of hundreds of bil-
lions of euros if they are to hit regula-
tory targets to improve financial
stability, a report from the Basel
Committee revealed yesterday.
The monitoring report also revealed
most banks fail to meet liquidity cov-
erage ratio requirements, and overall
are €1.76 trillion (£1.45 trillion) short.
However analysts warned the Basel
III rules were pushing banks away
from lending at the worst possible
time, taking credit away from firms
and consumers just when the econo-
my needs a boost from spending.
The study was based on June 2011
data from 103 international banks
with at least €3bn in Tier 1 capital
plus 109 others. It showed the average
large bank has 7.1 per cent common
equity Tier 1 capital, exceeding the 4.5
per cent minimum requirement.
However, additional requirements,
including the capital conservation
buffer and the surcharge for globally
systemically important banks, push
that requirement to seven per cent.
To hit that target, banks must raise
an additional €485.6bn before dead-
lines, which range from 2015 to 2019.
That huge gap compares with
€356.6bn pre-tax profits made by all of
the banks surveyed in the twelve
months before the data was analysed,
BY TIM WALLACE
and the necessary capital will have to
be raised through asset sales, share
issues and cutbacks in loan issuance.
Economists questioned whether this
level of pressure on banks to delever-
age will benefit the industry and the
wider economy.
“The extent of the regulatory
demands on the banking industry is
already undesirably severe, and as the
Basel III deadlines approach, the pres-
sure can only intensify, particular in
Europe where banks have most to do,”
said Jamie Dannhauser from Lombard
Street Research. “These figures make
clear how much further the European
banking sector is going to have to
retrench in coming years.”
The banks studied are also €1.76 tril-
lion short of liquid assets.
Only 45 per cent of banks meet or
exceed the 30-day liquidity coverage
ratio requirement, giving banks “a
huge mountain to climb” by the 2015
deadline, warned Dannhauser.
Banks are very heavily reliant on
public debt to meet the liquidity rules
– 57.7 per cent of eligible assets are
securities issued or guaranteed by sov-
ereigns, central banks and other pub-
lic sector entities. A further 27.6 per
cent is held in cash or central bank
reserves.
The Basel rules place great value on
state-issued securities, deeming them
risk free, and thus stockpiling them is
the cheapest way for a bank to build
up its levels of eligible liquid assets.
AMERICAN investment banks face a
new threat to their profits as
BlackRock plans to launch a trading
platform that would cut out Wall
Street.
The world’s largest money manager
has devised a platform which would
allow it to trade bonds directly with
the rest of its industry.
The electronic trading hub would
be run by its Solutions business,
BlackRock confirmed to City A.M. yes-
terday. It would give clients including
sovereign wealth funds and other
asset managers the opportunity to
trade in areas such as corporate
bonds and mortgage securities.
“If there’s savings available to
BY PETER EDWARDS
clients, we want to give it to them,”
Richard Prager, a BlackRock manag-
ing director and head of global trad-
ing, told the Wall Street Journal.
He said it would fill a gap in the sup-
ply of market liquidity rather than
competing with or “cannibalising” US
investment banks.
Yesterday a spokesman for the New
York firm said the new platform is “an
extension of BlackRock’s broader
efforts to streamline trading and
access liquidity across various
means”.
It would match buyers and sellers of
the same securities, known as “cross-
ing trades” and BlackRock Solutions
would charge a small fee for the serv-
ice that would beat the price of ordi-
nary Wall Street trading commis-
sions. BlackRock is awaiting approval
for the platform from the US
Securities and Exchange Commission.
The move comes after steady criti-
cism of Wall Street by BlackRock chief
executive Laurence Fink. He has spo-
ken out against the “spread” between
a bond’s purchase and selling price
while last year he warned against
“turning our back” on the anti-Wall
Street protests across more than 1,400
American cities.
In January BlackRock posted a 16 per
cent fall in its fourth quarter profits
as fees from investment advisory
work fell away amid the global tur-
moil. It said net income dropped to
$555m (£358.7m), or $3.05 per share.
IN BRIEF
MF Global trustee to sue staff
n The trustee liquidating MF Global’s
broker-dealer said yesterday he may
bring civil lawsuits against some of the
company's employees in connection with
a massive shortfall in customer funds
created in the days leading up to its
collapse. Trustee James Giddens said he
may assert claims for breach of fiduciary
duty and for violating rules governing
the segregation of client funds. Giddens
referenced “individuals at” MF Global's
parent company and its broker-dealer,
but did not name potential targets.
Man hires head of forex for AHL
n Man Group has hired a foreign
exchange veteran for its $21bn (£13bn)
flagship fund AHL, as the hedge fund
manager tries to revive performance at
its key computer-driven unit. Ravi
Chari, who has worked for 12 years in
systematic trading at hedge funds, joins
Man from computer trading firm IKOS,
where he headed its futures and foreign
exchange funds, Man said yesterday. He
will work alongside David Denison, the
current head of foreign exchange at
AHL, which employs around 130 people.
FRIDAY 13 APRIL 2012
6
NEWS
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Banks €485bn
short of Basel
capital targets
BlackRock plans bond hub
US REGULATORS said yesterday
that Goldman Sachs will pay $22m
(£14m) to settle civil charges over
allegations that it lacked adequate
policies to prevent its analysts
from sharing non-public
information with Goldman traders
and select clients.
The charges stem from a
practice known as “huddles” at
Goldman, which came to light
several years ago. Stock research
analysts would meet traders to
share their best trading ideas,
which were then passed along to
preferred clients. The charges did
Goldman agrees to pay £14m
fine to settle huddles charge
BY HARRY BANKS
not include any allegations of
insider trading.
“Despite being on notice from
the SEC about the importance of
such controls, Goldman failed to
implement policies and
procedures that adequately
controlled the risk that research
analysts could preview upcoming
ratings changes with select traders
and clients,” said Robert Khuzami,
the SEC’s head of enforcement.
Goldman agreed to pay the
penalty and revise its policies to
correct the problem.
A spokesman for the bank,
Michael DuVally, said Goldman
was pleased to resolve the matter.
Piper’s operations chief.
The reshuffle will also see Asia
Pacific and Middle East managing
partner Alastair Da Costa step
down with his role split into two
separate positions. Sir Nigel
Knowles, who will remain as
global managing partner and
chief executive, said
yesterday the changes
would “bring a fresh
perspective to the firm”.
IN BRIEF
John Mack joins LendingClub
nFormer Morgan Stanley chief
executive John Mack joined the board
of LendingClub Corp yesterday.
LendingClub said it picked Mack for
his experience in the bond market.
Mack has a long history on Wall Street,
where he joined Morgan Stanley’s
bond department in 1972, eventually
becoming president of the bank in
1993. LendingClub, which is not yet
profitable, targets consumers who use
their loans given at a lower rate to pay
off credit card debt. Since its launch in
2007, it has originated more than
$580m worth of loans.
KKR invests $65m in China deal
nKKR & Co agreed yesterday to invest
$65m (£40.7m) in China Cord Blood
Corp, making it the global private
equity firm’s first healthcare
investment in China. KKR’s investment
will give the firm about 24 per cent of
China Cord Blood on a fully diluted
basis. China Cord Blood, with a market
cap of about $200m, would use the
money to expand in China, analysts say.
Emerging markets boost L’Oreal
nFrench cosmetics maker L'Oreal
yesterday reported 6.4 per cent like-
for-like revenue growth for the first
quarter, lifted by big-spending
consumers in emerging markets and
renewed appetite for luxury goods.
Emerging markets reported €2.09bn
in sales for the quarter, eclipsing for
the first time Western Europe, which
reported sales of €1.95bn. L’Oreal said
it was confident that it would
outperform rivals in 2012.
G
E
T
T
Y
EMERGING markets fund manager
Ashmore has shrugged off fears of a
slowdown in China as it yesterday
posted a boost of more than nine
per cent to its assets in its third
quarter.
Finance director Graeme Dell told
City A.M. there could be pitfalls in
Chinese growth – factory output fell
there last month – but said the “size
and dynamic” of the economy con-
tinue to make it attractive.
“We remain positive for the long
term outlook for China.”
Dell said overall Ashmore had
invested more in buying assets, par-
ticularly corporate debt, in November
and December last year and reaped
the benefits in the quarter.
Assets under management rose 9.1
per cent to $65.9bn (£41.3bn) in the
first three months of this year.
Investment performance added
$4.3bn to assets, complementing a
net inflow of $1.2bn in new money.
“Consistent with Ashmore’s long
standing investment approach of
adding risk during periods of mar-
ket volatility... all investment
No China crisis
for Ashmore
as assets swell
BY PETER EDWARDS
themes have subsequently delivered
positive investment performance in
what has been a strong third quar-
ter,” it said.
Holdings in equities, debt and local
currencies contributed most to the
increase in assets, Ashmore added,
saying the group’s performance was
in line with expectations. However it
experienced “modest net outflows”
in equities and blended debt prod-
ucts during the period.
Numis analyst David McCann rated
Ashmore a “hold” and said future
growth in earnings “may not be as
strong” as the growth potential of
assets under management.
Shares closed up 0.9 per cent.
HK Exchange taps
banks to finance bid
HONG Kong Exchanges and
Clearing Ltd (HKEx) is in talks
with banks to help finance its bid
to take over the London Metal
Exchange (LME), a sign that the
world’s most valuable bourse is
aggressively pushing ahead with a
bid.
Sources close to HKEx yesterday
said it was seeking to raise up to
$3bn (£1.88bn), in what would be
the first-ever acquisition loan
taken by the bourse.
However as the loan
discussions were not public, the
sources would not reveal the
BY HARRY BANKS
bank nor the amount.
Analysts value LME, the world’s
largest market for industrial
metals, at between £500m to
£1.5bn.
LME has short-listed three other
suitors – CME Group, NYSE
Euronext and InterContinental
Exchange (ICE) – with 7 May set as
the deadline for second-round
bids.
HKEx is the world’s largest
bourse by market capitalisation,
with a value of $18bn (£11.3bn)
and sitting on cash and short-
term investments of HK$30bn
according to Thomson Reuters
data.
Ashmore Group PLC
5Apr 4Apr 10Apr 11 Apr 12Apr
395
385
375
365
p
389.40
12Apr
A SERIES of private equity houses
including Bridgepoint and
Blackstone are considering a bid
for ticket agency
thetrainline.com.
The bookings website, currently
owned by British buyout firm
Exponent, is up for sale with first-
round bids expected to be in by
later this month.
It could go for up to £400m
after environmental concerns and
record high petrol prices
triggered a surge in demand for
rail travel in recent years.
Annual journeys on the rail
Bidders close in on Trainline as
rail travel sees surge in demand
BY PETER EDWARDS network have reached more than
1.4bn, the highest for a peacetime
year since the 1920s.
Exponent was close to engaging
advisers from Rothschild to sell
Trainline in late 2010, according
to speculation, although it never
confirmed its intentions.
The website was set up in 1999
and was bought by Exponent from
Richard Branson’s Virgin for
£163m in July 2006.
London-based Exponent also
owns bed retailer Dreams and veg-
etarian foods brand Quorn.
Yesterday Exponent,
Bridgepoint and Blackstone
declined to comment.
FRIDAY 13 APRIL 2012
8
NEWS
cityam.com
It’s estimated that Trainline could be sold for up to £400m
Police watchdog slams links to
News Corp as lawsuits reach US
SENIOR London police staff linked to
the News Corp phone hacking scan-
dal showed poor judgement, took
bad decisions and got too close to
journalists working for Rupert
Murdoch’s newspapers, an independ-
ent watchdog said yesterday.
While the Independent Police
Complaints Commission (IPCC)
rejected allegations of corruption
involving two of the top personnel
at the Metropolitan Police (MPS), it
was highly critical of their and
senior colleagues’ media
relationships.
The IPCC said despite a growing
BY HARRY BANKS
clamour over phone hacking
centred on Murdoch’s News
International, the British
newspaper arm of his News Corp
empire, senior people at the force
appeared “to have been oblivious to
the perception of conflict”.
“It is clear to me that the
professional boundaries became
blurred, imprudent decisions taken
and poor judgment shown by senior
police personnel,” IPCC deputy
chairman Deborah Glass said in a
statement.
The IPCC’s report follows
investigations into John Yates, the
country’s former top counter-
terrorism officer, and Dick
Fedorcio, the MPS media chief, over
their relationship with Neil Wallis,
a former deputy editor at the News
of the World, the Murdoch tabloid
at the heart of the phone-hacking
furore.The IPCC concluded that
there was no evidence of corruption
but ruled that both men had
breached internal policies.
The IPCC comments come after
British lawyer Mark Lewis, who has
filed several phone hacking suits in
the UK, said yesterday that he is
taking legal action in the US on
behalf of three alleged victims of
phone hacking by the News of the
World. The move marks the first
legal action in the US.
Aviva considering plans to sell
£1bn US life insurance business
INSURANCE giant Aviva is
considering selling its US business,
which is estimated to be worth
around £1bn – but analysts say that
regulatory conditions mean it may
struggle to dispose of the division.
Chief executive Andrew Moss
reportedly told an investor
conference that the company is
open to offers for its American unit,
which was acquired by his
predecessor for over £2bn in 2006.
However potential European
BY JAMES WATERSON
buyers could be put off from bidding
because of the introduction of the
so-called Solvency II directive which
will require European firms to hold
more capital against their American
businesses.
Barrie Cornes, an insurance analyst
at Panmure Gordon says a disposal is
not sensible in the short term: “The
US operation has effectively been on
the stocks for over two years, but
Aviva would not consider letting it go
for an indicated 50 per cent discount
to the price that it paid for it in 2006.”
“Whilst obviously Aviva would con-
sider any serious offer for any part of
the business, in our view a suitable
offer is unlikely in the short-medium
term,” he added.
Moss has a long-held aim to concen-
trate its efforts on its 12 core
markets – including America – but
faces pressure from shareholders to
improve results. Aviva USA specialises
in equity-indexed annuities, a busi-
ness that requires substantial
amounts of capital.
Shares in the firm closed up less
than one per cent at 313.4p.
Aviva declined to comment.
Management shake
up for DLA Piper
DAVID Bradley yesterday stepped
down as managing partner of law
firm DLA Piper, as part of a
management shake-up that will see
several changes made to its
executive board.
Bradley will return to fee-
earning work as a partner in
the firm’s employment,
pensions and benefits group
from 1 May, and will be
replaced at the business by
Andrew Darwin, DLA
BY ELIZABETH FOURNIER
David Bradley has stepped
down as managing partner
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G
E
T
T
Y
Aggreko upbeat on 2012 as it
wins £50m Dominican contract
AGGREKO, the world’s biggest
temporary power provider, said
yesterday underlying revenue had
risen by more than 20 per cent in
the first three months of the year,
putting it on track for further
growth in 2012.
Separately, the company
announced a 100 megawatt (mw)
contract in the Dominican
Republic valued at about $80m
(£50m) over two years.
The FTSE 100 company, which
provides generators to cover
BY HARRY BANKS
electricity shortfalls or power live
events, said sales at both its Local
and International Power Projects
(IPP) businesses had risen 21 per
cent in the first quarter.
Aggreko added that order intake
at its IPP business remained strong,
with a further 150 mw of new
projects secured since March, when
it reported 2011 profits ahead of
expectations. It also said the
trading was supported by the
upcoming London Olympics a
contract valued at about £50m.
“International Power Projects has
made an encouraging start to the
year and a healthy prospect pipeline
means we expect to deliver strong
growth for the year as a whole”, it said.
Bob Dudley said the firm is on track to boost operating cash flow by 50 per cent by 2014
Aggreko PLC
5Apr 4Apr 10Apr 11 Apr 12Apr
2,240
2,200
2,160
2,120
p
2,226.00
12Apr
GENEL Energy, whose chief
executive is former BP boss Tony
Hayward, yesterday gave an
upbeat statement on its
operations in Kurdistan.
According to the firm’s
operator in the region DNO,
the Tawke field in Kurdistan
is fulfilling expectations.
It said the Peshkabir-1
exploration well was ready
for drilling.
Genel has a 25 per cent
interest in Tawke while the
Kurdistan Regional
Government has a 20 per cent
working interest. It was
Genel gives positive outlook on
Kurdistan exploration fields
BY JOHN DUNNE producing 65,000 barrels of oil a
day at the end of last year.
Hayward said: "Operations on
the Tawke field continue
according to plan and we are on
track to increase capacity to
100,000 barrels of oil per day by
the end of 2012. Peshkabir-1 is
the first well in our extensive
exploration programme of
seven high impact wells
that we are drilling over
the next 18 months, and
we look forward to the
completion of the
testing programme.”
FRIDAY 13 APRIL 2012
10
NEWS
cityam.com
BP suffered a bloody nose over its
directors’ pay packets yesterday, as
shareholders at its annual meeting
voiced continued concerns about the
firm’s strategy two years after the
Gulf of Mexico oil spill.
Around 11.8 per cent of sharehold-
ers voted against the firm’s remunera-
tion plans, with a further 1.7 per cent
withholding their votes.
The number of opposing votes was
almost the same as during 2011’s
meeting, when investors had their
first opportunity to display anger over
BP gets bloody
nose overs its
directors’ pay
BY MARION DAKERS
the Gulf spill on 20 April 2010.
Chairman Carl-Henric Svanberg said
the firm has taken a “hard look” at its
assets this year and slimmed down its
operations to fund the Gulf clean-up.
BP has now made $23bn worth of its
planned $38bn asset sales.
Just over seven per cent voted against
Svanberg’s re-election to the board,
leaving his approval rating broadly
unchanged from a year ago.
But chief executive Bob Dudley,
whose pay packet of more than £4m
prompted the rebellion against remu-
neration, was backed for re-election by
99.75 per cent of shareholders.
The firm returned to profit and divi-
dend payments in 2011, having
endured what Dudley said was a
“major crisis” in the wake of the spill.
Dudley said BP plans to generate 50
per cent more operating cash flow by
2014 through new upstream projects.
The firm’s share price, however, is still
30 per cent below pre-spill levels.
A handful of protesters were dragged
out of the meeting at London’s ExCel
centre after staging a “die-in” to high-
light BP’s tar sands operations.
SHELL’S shares fell as much as four
per cent yesterday on worries over a
possible oil spill in the Gulf of
Mexico, before reassurances from
the company helped stabilise the
stock.
The FTSE 100-listed oil major sent
in a specialist vessel to assess a
sheen on the water near one of its
Gulf platforms, and said in the
afternoon that all its operations in
the area showed no signs of a leak.
Flights over the scene were also
taking place to establish the source
of the sheen, which measures
around one mile by ten miles.
Despite Shell’s promise of
“prudent caution” after the sheen
was spotted, the spectre of BP’s
Deepwater Horizon spill almost
exactly two years ago sent a chill
through the market.
But Shell’s London-listed A shares
settled to close down 0.75 per cent
at £21.25 yesterday following the
afternoon update.
BP owns a 28.5 per cent stake in
the Mars project and a 22.7 per cent
interest in the Ursa project,
between which the oil was found.
Shell said it would continue to
work with US regulators to find the
cause of the sheen, which is
estimated to be around six barrels’
worth of oil.
Shell says new
Gulf spill is not
from its wells
BY JOHN DUNNE
AND MARION DAKERS
IEA says oil market is starting to
turn a corner after record highs
GROWTH in oil supply has
outstripped rising demand for the
first time since 2009, the
International Energy Agency said
yesterday, adding that it “detects a
turning of the tide for market
fundamentals”.
Global supply is expected to grow
by 0.7m barrels per day during the
year, despite unplanned stoppages
in the North Sea and elsewhere
curbing output in OECD nations in
the first quarter by around 1.1m
barrels per day.
Countries are bolstering their
stockpiles of oil during the quieter
BY MARION DAKERS
spring months, the IEA noted.
Brent crude futures were trading
at around $119.50 a barrel
yesterday, down from the near-
record highs of $128 seen earlier in
the year.
However, the IEA does not expect
prices to ease much during the year
due to continued worries over Iran,
which produced 3.3m barrels per
day in March, down 50,000 barrels
during the month.
It has threatened to cut off
supplies in the face of increasingly
tough sanctions from the US.
However, the US and Saudi Arabia
have pledged to boost output to
offset any hit to global supplies.
“We cannot discount the
possibility that prices will remain
high so long as geopolitical
uncertainties remain,” the IEA
added in its monthly oil report.
Analysts said that while the
report initially suggests a well
supplied market, there remain
concerns about replacing Iranian
crude.
Gareth Lewis-Davies, energy
commodity strategist at BNP
Paribas, said: “At an initial level the
report appears to present a market
that is well supplied ... but if you
look closely, concerns around Iran
and fact that stocks are still low
remain key issues.”
FRANCE’S Total yesterday pulled
out of a £70m bid for AIM-listed
oil explorer Wessex Exploration.
The oil giant was looking to gain a
greater share of a huge field off
the coast of French Guyana, in
which it already has a 25 per cent
stake.
The oil major said yesterday it
had decided against pursuing
Wessex, after the company’s board
said that shareholders were
against the 10p a share offer.
Wessex owns 1.25 per cent of
the Zaedyus project, which could
hold as much as one billion
barrels of oil, as well as onshore
licences closer to home in
Total pulls out
of Wessex bid
BY HARRY BANKS
Hampshire.
Wessex told Total about the
unfavourable reaction of investors
last month, leaving the French
group with a deadline of Monday
to revise their offer under
takeover rules.
In a statement, Wessex said “The
board are of the view that the
approach of 10 pence per ordinary
share undervalues the company
and was inadequate to secure their
support for any offer which Total
might consider at this level.”
The company holds its share in
the French Guyana field through a
joint venture with fellow AIM-
listed Northern Petroleum, which
has also been the subject of
takeover speculation.
Wessex added: “Wessex
confirms that, having raised £12m
(gross) of additional funding in
November 2011, the company is
fully funded for all current
requirements, including
participation in a further Zaedyus
appraisal well.”
Genel chief executive Tony
Hayward is confident.
BP PLC
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520
500
480
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440
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444.85
12Apr
BRITISH aerospace parts supplier
Umeco is set to be bought by
American firm Cytec after the board
recommended a £274m takeover bid.
The offer of 550p a share pushed
Umeco shares up 48 per cent
yesterday and Cytec said it had
commitments from the top three
shareholders to vote in favour of the
deal. The Leamington Spa-based
firm, which counts Boeing, Airbus
and BAE Systems among its
customers, also works for Formula
One teams.
£274m bid for
UK firm Umeco
BY JAMES WATERSON
BRITISH Airways said yesterday
1,200 jobs were under threat as a
result of plans to integrate the
recently-purchased airline BMI into
its Heathrow operations.
The Unite union said it was “very
saddened at the scale of the job
losses being proposed” as BA soaks
up 42 of BMI’s lucrative landing
slots at Britain’s busiest airport.
The brunt of the job cuts will be at
BMI’s head office at Castle
Donington and at regional airports.
BA said the integration plan for
BMI, which is losing over £3m a
week, would retain about 1,500
jobs, including around 1,100 cabin
crew, pilots and engineers based at
Heathrow.
Talks with unnamed potential
buyers for BMI Baby and BMI
Regional are continuing, BA said.
Keith Williams, British Airways’
chief executive, said: “BMI is heavily
loss making and is not a viable busi-
ness as it stands today.
“As we look to restructure the
business and restore profitability,
BA looks to cut
1,200 jobs as it
integrates BMI
BY MARION DAKERS
job losses are deeply regrettable but
inevitable.”
The firm said in a statement that it
will look into placing some staff in
the east Midlands in jobs with other
local industrial firms such as Rolls-
Royce.
It added that BMI’s planes will be
repainted to carry BA’s livery.
BA won regulatory approval for its
£172m deal to buy BMI from
German carrier Lufthansa on 30
March.
As part of this clearance, European
authorities ruled that BA must sell
on 14 of BMI’s 56 highly sought-after
Heathrow landing slots to rivals.
International Consolidated Airlines Group
5Apr 4Apr 10Apr 11 Apr 12Apr
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FRIDAY 13 APRIL 2012
11
NEWS
cityam.com
GUY PARSONS has stepped down as
chief executive of Travelodge to
allow executive chairman Grant
Hearn to take full control of the
debt-laden group.
The budget hotel chain, which
owns nearly 500 hotels across the
UK, Ireland and Spain, said Hearn
will resume the role as chief
executive which he held until 2010.
The move follows financial
restructuring talks that will see
Goldman Sachs and two US hedge
funds take control of the company.
Grant Hearn said the board “has
expressed their wish for me to lead
Travelodge chief Guy Parsons
to be replaced by former boss
BY KASMIRA JEFFORD the business once again.”
Echoing comments made by
Phillip Clarke at Tesco following
chief executive Richard Brasher’s
departure, Hearn said “clearly
there cannot be two captains
running a ship and as a result Guy
has decided to leave the company”.
It emerged in February that
hedge funds, Avenue Capital and
GoldenTree Asset Management
were negotiating a debt for-equity
swap to take control from Dubai
International Capital (DIC), which
bought Travelodge in 2006.
The investors have agreed to
inject £70m capital to prevent the
business defaulting on its loans.
Guy Parsons, (above) chief executive of Travelodge, will be replaced by Grant Hearn
INVESTORS put more cash into
hedge funds in March, data from
hedge fund administrator GlobeOp
shows, encouraged by a rebound in
financial markets.
Net inflows into hedge funds, as
measured by the GlobeOp Capital
Movement Index, which tracks
monthly net subscriptions to and
redemptions from hedge funds
managing $187bn, were 0.35 per
cent of that total during March,
better than the 0.02 per cent net
withdrawal seen in March a year ago.
March boon for
hedge funds
BY HARRY BANKS
JD SPORTS Fashion yesterday said
full-year pre-tax profits were ahead
of expectations despite suffering a
loss of £2.2m from its newly
acquired Blacks business.
The retailer -- which sells sporting
goods from top brands like Nike and
Adidas -- said pre-tax profits fell 14 per
cent to £67.4m from £78.6m a year
earlier, largely as a result of invest-
ment into recent purchases including
Blacks.
JD said the ailing outdoor goods
chain “was in a very fractured state”
following its £20m acquisition last
year with “a severe lack of stocks” in
many core high performing lines.
Chief executive Peter Cowgill said
the group was still determining the
size of the 215-strong estate, despite
already shutting 81 loss making
Blacks stores.
“Determining the size of the long
term store base will depend on store
performance when set against newly
negotiated rents and associated
property costs,” he said.
Despite a fall in profits, revenue
surged 20 per cent to £1.06bn. The
company also said it would pay a
final dividend of 21.2 pence, up 10
per cent from last year.
Cowgill said the group expected
some uplift from the Olympics but
remained cautious as consumer
budgets remained squeezed.
JD Sports sees
profits dented
by Blacks deal
BY KASMIRA JEFFORD
MOTHERCARE revealed yesterday it is
to close a further 111 stores in the UK
and suspend its dividend as part of
the embattled retailer’s efforts to
revive its fortunes.
The baby products chain, which is
facing intense competition from
online retailers and supermarkets,
already announced plans last year to
close 110 of its 273 branches by 2013.
However, chairman Alan Parker said
yesterday that after closing 62 stores
in the year to March, the group
planned to scale back its UK estate to
More closures
for Mothercare
as sales decline
BY KASMIRA JEFFORD
just 200 stores by 2015 – consisting of
173 Mothercare branches and 27 Early
Learning Centres.
The retailer, which has renegotiated
its banking facilities with its lenders,
said the cost saving programme would
cost around £35m.
The move is expected to boost profits
by £13m by March 2015 and shave-off
£20m in non-store overheads on an
annualised basis.
Mothercare made the announce-
ment as it reported a steeper decline
in fourth quarter UK like-for-like sales,
down 8.2 per cent compared with a 5.2
per cent decline in the previous quar-
ter.
Despite problems in its home mar-
ket, Mothercare’s overseas business
has continued to thrive, with like-for-
like sales up by 18 per cent in the
fourth quarter of the year.
The closures are part of the strategic
review being undertaken by Alan
Parker. Simon Calver, who joins as
chief executive from Lovefilm later
this month, will give full results of the
strategic review in May.
A hint of the review plans to come
sent shares up 7.8 per cent to 183p.
WILL SONY MAKE A RECOVERY?
Interviews by Kendal Gapinksi and Michael Pooler
I think it has a hard task ahead. There is
immense pressure from Apple and Samsung.
There is a desire for it to come back, but there is very
strong competition whose products are cheaper.
These views are those of the individuals belowandnot necessarily those of their company
DOMINIC CAMILERI
STRUCTURE TONE
”
It is too big not to recover. It would take a long
time for it to disappear. But it depends on
having the right people on board to innovate. At the
moment it is struggling.
JAMES FLETCHER
FRIENDS LIFE
I’ve heard that its mobiles aren't doing that
well. It is a tough job competing against
Apple. Sometimes you just need to stick to the basics –
it should just concentrate on its strengths.
INGRID DRDICA
HOBBS
”
”
Sony to focus on mobile, games
and imaging as it slashes jobs
SONY’S new chief executive Kazuo
Hirai set out his stall for a wide-rang-
ing overhaul at the struggling tech
firm yesterday.
The group, which employs hun-
dreds of staff in the UK, said its head-
count will fall by 10,000, or six per
cent, this year, which includes roles
that are moving to other companies
as a result of asset sales.
The cuts will result in ¥75bn
(£581m) in restructuring costs in the
current financial year, and follow
BY MARION DAKERS
two rounds of job losses under previ-
ous chief Howard Stringer.
Hirai also unveiled a renewed focus
on mobile phones, digital imaging
and Sony’s Playstation branch, as he
tries to reshape the firm to boost sales
after years of accelerating losses.
Sony aims to make 85 per cent of
its operating income from these busi-
nesses by 2014, as it scales back its
unprofitable TV division.
“I am determined to transform and
revive Sony. This is our only chance to
change,” Hirai told a packed news
conference.
Sony expects to have made a record
£4bn loss in the year just ended.
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Chairman Alan Parker has suspended the dividend
Mothercare
5Apr 4Apr 10Apr 11 Apr 12Apr
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12Apr
Mothercare left no surprises, with full year profit expectations unchanged.
On strategy, Mothercare announces incremental cost savings and store closures.
Mothercare UK is not loss making solely due to its store base; we believe the
problems centre on product and price, which are not mentioned today.
ANALYST VIEWS
”
“
The update gave a first look at the outcome of the structural and opera-
tional review. With a new financing agreement also announced, we were partic-
ularly impressed by the quantum of non-store overhead savings that
have been identified and are increasingly encouraged by the outlook.
”
The bare bones of the three year “transformation and growth” strategy
have been announced centring around taking significant costs out of the UK and
rightsizing the store base. You have not got significant detail on the core
pillars at this stage...the proof of the pudding will be in the eating.
”
IS THERE HOPE FOR
MOTHERCARE REVIVING
ITS UK BUSINESS? Interviews by Kasmira Jefford
JOHN STEVENSON PEEL HUNT
“
ANDREW WADE NUMIS
“
DAVID JEARY INVESTEC
FRIDAY 13 APRIL 2012
13
NEWS
cityam.com
A FUTURE where you will swipe
your phone instead of your credit
card looks set to be placed on hold
a little while longer, with the
European Commission expected to
delay its decision on a UK “mobile
wallet” scheme.
The commission will reveal its
decision later today on a joint
venture proposal between
Vodafone, Everything Everywhere
and O2 to create a standard
mobile payments platform.
However, it is understood the
Commission will not reject the
proposal outright.
Telcos frustrated as EU
delays mobile wallet
BY STEVE DINNEEN
Sources say the decision was not
influenced by the UK’s other
operator, 3, which has spoken out
against the plans.
The operators had initially
planned to showcase the scheme
at the Olympics this summer but
were forced to abandon the
deadline after facing a series of
hurdles.
It is understood the European
Commission wants extra time to
consider the next move from
Google, which has already
launched Google Wallet in the US.
Apple is also thought to be near
to including contactless payment
technology in its iPhone.
Earnings slump at Punch as it
continues to close down pubs
PUNCH Taverns’ profits fell by 20
per cent in the first half of the year,
it said yesterday, but reassured it
was on track to meet its full-year
profit expectations despite weak
consumer market conditions.
The tenanted-pubs business,
which demerged its better-
performing managed pubs division
Spirit last year, said its pre-tax
profit in the 28 weeks to 3 March
fell to £33m from £41m a year ago.
Punch, which plans to dispose its
non-core pubs over five years, said
average net income per pub rose
less than a per cent.
BY HARRY BANKS
Like-for-like net income for core
estate, which includes the pubs
which the company plans to retain,
declined 2.1 per cent.
Punch, which is in negotiations
with bondholders to pay down its
£2.2bn debt pile, said it reduced
debt by three per cent during the
first half, when it sold 214 pubs and
other assets for £62m.
Chief executive Roger Whiteside
said the group remained on track
with its strategy to dispose between
400 and 500 non-core pubs for the
full year, which will see it bring
down the number of its pubs to
about 3,000 from the current 5,004.
“Notwithstanding the continuing
challenging climate we have a clear
operational plan to return the core
estate to growth in the medium-
term and extract maximum value
from our non-core assets,” he said.
Punch Taverns
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12Apr
Sony Corp
9Apr 6Apr 10Apr 11 Apr 12Apr
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12Apr
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TIM Allan, the former spin doctor for
BSkyB who started his professional
career as a press adviser to Tony Blair,
has agreed to sell a majority stake in
his public relations firm Portland to
the global marketing group
Omnicom.
The deal values Portland at around
£20m (depending on the group’s per-
formance over the next three years)
and Allan’s stake at several million
pounds.
It will involve Portland working
closely with g+Europe, a European-
focused consultancy specialising in
reputation management.
Former Blair adviser
sells his PR agency
Portland already has offices in
London, New York and Nairobi,
where it does work with Kofi Annan,
the UN-Arab league envoy.
Portland was founded in 2001 by
Allan who took the BSkyB account
with him when he left the firm. Its
clients now include Google, Apple,
Tesco, Virgin Media and McDonald’s.
Its advisory board comprises Allan’s
former boss from BSkyB Tony Ball,
former Conservative Minister and tel-
evision pundit Michael Portillo and
Sir Chris Powell, who is a former chief
executive office of the advertising
agency BMP.
Allan’s time at BSkyB coincided
with a bitter battle between it and its
rival ITV, which was then in the
process of launching a rival digital
television platform, ITV Digital. At
the time one of Allan’s main press
rivals was David Cameron, then press
office for Carlton, one of ITV Digital’s
principal shareholders..
The rivalry was often quite bitter
but that hasn’t prevented Allan from
hiring a number of people with
Conservative party links. Portland
was advised on the deal by SI Partners
and Kemp Little.
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THECAPITALIST
FRIDAY 13 APRIL 2012
THOSE who fear they might have a lit-
tle difficulty finding their moral
compass might want to attend a dis-
cussion on Tuesday night at the
Institute of Directors (IoD).
IoD director general Simon Walker
will be in conversation with Ken
Costa, the former UBS and Lazards
investment banker, more commonly
known these days as “The Ethical
Banker.”
Costa, who has claimed that mar-
kets have lost sight of their moral
duty, is advising the Archbishop of
Canterbury on reconnecting the
financial with the ethical following
the recent protests at St Paul’s
Cathedral.
City A.M. readers can register for
free by emailing [email protected].
In conversation
with Ken Costa
Tim Allan will stay on after the deal Turn up to hear the Ethical Banker
EDWARD Munch’s iconic picture, known as The Scream, was on show yesterday at
Sotheby’s in London ahead of a sale in New York on 2 May. Also on sale that evening
will be Andy Warhol’s 1963 Double Elvis and a Pablo Picasso portrait. The Scream is
expected to fetch around $80m.
MUNCH’S SCREAM COMES TO LONDON
RYANAIR yesterday cut 60 weekly
flights from Edinburgh Airport in a
bid to force operator BAA to lower
its fees.
The low-cost carrier warned that
its move to axe eight routes from its
winter schedule could cost up to
500 jobs at the airport.
Ryanair blamed BAA’s “uncompet-
itive” fees, and said its annual pas-
senger traffic at Edinburgh would
fall by 500,000 on a year ago due to
the cuts.
Edinburgh, however, was already
braced for Ryanair’s more modest
winter plans. “It was expected as we
saw similar cuts in last year’s win-
ter schedule,” said managing direc-
tor Jim O’Sullivan.
Edinburgh Airport is expected to
Ryanair blames
airport fees for
Edinburgh cuts
BY MARION DAKERS
change hands this year after BAA
put it on the market following a
competition ruling.
Ryanair argued that its routes
needed to be finalised before the
sale, as its current deal ends in
October. “We need to sign a new
contract now to allow us to plan our
winter schedules, irrespective of
who owns the airport… We need to
have our planning and schedules in
place,” said a spokesperson.
O’Sullivan said the airport is
“look[ing] forward to further negoti-
ations with Ryanair once the sale of
the airport is concluded.”
He added that Ryanair is being
asked to pay the same air traffic con-
trol costs as every other airline.
Earlier in the week, BAA said
March traffic at Edinburgh had fall-
en 2.8 per cent on last year.
ADVISERS INVESTEC
Hays boosted by Germany but
UK banking market still weak
SHARES in recruitment firm Hays
climbed as much as 11 per cent
yesterday after it posted steady
growth in global net fee income,
despite a drop in profits at its UK
business.
CEO Alistair Cox said the UK
had been hit by weakness in
banking and the private sector,
leading to a decline in domestic
net fees of five per cent in the
three months to 31 March.
The gloomy UK outlook echoes
yesterday’s update from peer
Michael Page, which said weak
markets were dragging on growth
despite reporting an uptick of
seven per cent for the first
quarter.
Overall growth at Hays was 10
per cent, supported by a strong
performance across the group’s
continental Europe practice –
particularly in Germany where
net fee income rose by 36 per
cent. Australia and New Zealand
also led expansion in Asia Pacific,
contributing to a five per cent
increase overall.
BY ELIZABETH FOURNIER
Melrose chairman Christopher Miller is among the top staff being rewarded
IN BRIEF
Swatch snaps up watch case firm
n Swatch Group is buying high-end
watch case maker Simon Et Membrez
for an undisclosed sum, the group
announced yesterday, in a deal that
will improve its own production
division. Simon Et Membrez, with 250
employees, will continue to trade
under its name and will also carry on
supplying third parties. The deal also
includes a 60 per cent stake in the
related case polishing company,
Termiboites SA, which has 50
employees.
Online shoppers boost UK Mail
n UK Mail Group’s performance in
the fourth quarter was in line with its
expectations, the group said
yesterday. Driven by increased online
shopping, UK Mail reported a volume
growth of 10 per cent. Its reported
revenues for the quarter increased by
14 per cent, compared to the previous
year. Total revenue growth for the
year increased by eight per cent,
boosted by both its Courier and
Pallets businesses reporting revenue
growth for the year.
Price cuts hurt Carrefour’s sales
n Europe’s biggest retailer,
Carrefour, reported lower first quarter
sales than analysts had expected
yesterday. First quarter sales were
€22.5bn (£18.6bn). Sales fell 2.1 per
cent, not including fuel, currency and
calendar effects, while French
hypermarket sales dropped 5.8 per
cent. It said that its recently
implemented ‘Reset’ plan for French
hypermarkets had also hurt sales, as
volume growth had not yet made up
for its price cuts.
Hays PLC
88.50
12Apr
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FRIDAY 13 APRIL 2012
15
NEWS
cityam.com
NEW JOBS
NEW COMPANIES
EVERYDAY
CITYAMCAREERS.com
WWW.CITYAMCAREERS.COM
OVER
OR SCAN HERE
2500
FINANCE, LEGAL & I.T
SALARIES UP TO
JOBS
£300K
DIRECTORS at manufacturing
buyout firm Melrose sold shares
worth nearly £69m yesterday in
order to raise cash to pay tax on their
long-term incentive awards.
Stock amounting to four per cent
of the firm’s total share capital was
placed with institutional investors
through an accelerated bookbuild
managed by Investec.
Directors were given stock worth
£126m yesterday as an incentive
scheme from 2009 paid out.
Around half of these shares were
subsequently sold at 400p each.
Shares in Melrose closed up 3.15 per
cent at 418.8p yesterday.
Executive chairman Christopher
Miller was awarded 7.5m shares
under the scheme, and yesterday
sold 4m. Chief executive David
Roper and chief operating officer
Simon Peckham, who were also
given 7.5m shares each, sold on
4.2m and 3.75m respectively.
Finance boss Geoff Martin was
awarded 4.69m shares and sold on
2.58m yesterday. All three continue
to hold millions of shares.
Melrose execs
sell on shares
after windfall
BY MARION DAKERS
The international boost meant
the group was able yesterday to
revise its profit forecasts, saying it
now expects full year operating
profits to come towards the top
end of market estimates that
range from £108m-£130m.
Finance director Paul Venables
struck a more positive note than
in the company’s last update,
when he admitted the firm was
taking a “cautious position” on
the outlook for the rest of 2012.
Yesterday he said that though
markets were “complex and far
from uniform” there were signs
that companies should be “more
positive than three months ago”.
In the UK, the overall drop in
income came largely from a
slowdown in the private sector,
where net fee income fell by six
per cent – largely due to
decreased activity in the firm’s
banking and “City-related
specialisms”.
Fees from the public sector also
lagged, falling by two per cent,
while IT, legal and energy
recruitment were the key areas
where Hays clawed back some
domestic growth.
To offset the decline, the firm
said it was continuing to focus on
cost cuts as a means of protecting
profit margins – and admitted it
had decreased consultant
headcount in the UK by five per
cent over the quarter.
Net debt decreased by around
£18m over the period to £160m,
and Venables maintained that
Hays would “continue to invest
selectively in certain growth
areas”. But he ruled out
acquisition in core market
Germany, saying the company
would “rather be aggressive in
organic growth”.
KEITH Anderson and Chris Baird of Investec
advised Melrose on yesterday’s secondary
share placing.
Anderson is co-head of corporate broking at
Investec and has advised a range of top
clients on their finances.
He and Baird were recently appointed as a
broker to Halma, a FTSE 250 UK technology
provider, having advised the firm in previ-
ous years while the pair worked at Dresdner
Kleinwort.
Anderson joined Investec in 2002 having
been previously at WestLB Panmure, where
he was head of corporate broking and a
member of the investment banking man-
agement committee. He is also a member of
the Institute of Chartered Accountants of
Scotland.
Baird, meanwhile, has been managing
director in advisory at Investec since 2009,
having previously held the MD position at
Dresdner Kleinwort.
Baird started his career as a chartered
accountant, qualifying with PwC, before
joining Kleinwort in 1995.
Investec has picked up a string of clients
since taking over Evolution in September,
including engineering group Ricardo and
Halma.
By Michael Pooler
KEITH ANDERSON
CO-HEAD OF
CORPORATE BROKING
Roche sales remain flat as Illumina bid battle rages
RUSSIA-FOCUSED gold miner
Petropavlovsk said gold production
in the first quarter of 2012 rose 60
per cent on the same period a year
ago, boosted by higher grades of the
precious metal extracted from its
Pioneer mine in Russia’s Far East.
The company said it produced
120,800 ounces and is on track to
produce its target of 680,000 ounces
of gold this year, with production as
usual weighted towards the second
half of the year.
The first quarter of the year is
always challenging due to low winter
temperatures, said chairman Peter
Hambro in a statement, adding that
despite this the company beat its
forecast for the sixth quarter in a
row.
Production from its Pioneer mine
grew 79 per cent during the quarter
to 65,600 ounces.
Its 2012 production target will be
an eight per cent rise from the previ-
Petropavlovsk
sees 60pc rise
in its gold haul
BY HARRY BANKS
ous year.
Meanwhile FTSE-250 miner
Centamin said gold production at its
flagship mine in Egypt was marginal-
ly below its estimates despite a strike
in the first quarter, sending the
miner’s London-listed shares up four
per cent.
The company’s shares dropped
sharply on 6 March after it said opera-
tions at its Sukari mine had been
halted due to labour unrest. It
resumed operations on 12 March.
The Egypt-focused miner said pro-
duction in the first quarter rose nine
per cent to 49,071 ounces. It had
expected to produce 50,000 ounces.
Centamin said it mined and
processed fewer tonnes than in the
fourth quarter because of the disrup-
tions.
The plant achieved record produc-
tivity, with tonnes per hour rates
exceeding five million tons per
annum during the period, the com-
pany said.
L
A
U
R
A

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E
A
N
/
C
I
T
Y

A
M
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5Apr 4Apr 10Apr 11 Apr 12Apr
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524.50
12Apr
FRIDAY 13 APRIL 2012
16
NEWS
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BY HARRY BANKS
SWISS drugmaker Roche dangled the
prospect of a higher offer before
reluctant US bid target Illumina
yesterday along with broadly flat first-
quarter sales supported by its top-selling
cancer drugs.
Genetics specialist Illumina has
rejected Roche’s $6.7bn sweetened
takeover offer and has also urged
investors to vote against Roche’s bid to
get its own nominees on to the US firm’s
board at a meeting next week to push for
talks.
Chief executive Severin Schwan said
that Roche would have to consider “all
its options” if Illumina shareholders
voted against its proposals at that
meeting.
“If Illumina were to engage with us,
we would consider any information
supporting Illumina’s contention that
our offer undervalues the company and
its prospects,” Schwan said in a
statement.
His comments echo those made in a
letter to Illumina shareholders late on
Wednesday in which Schwan also
ridiculed Illumina’s claim to be “the
Apple of the genomics business”.
Roche, the world’s largest maker of
cancer drugs, said first-quarter sales fell
one per cent to SwFr11.03bn, but rose
two per cent at constant exchange rates,
meeting the average analyst forecast.
Centamin PLC
5Apr 4Apr 10Apr 11 Apr 12Apr
69
67
65
63
p
66.40
12Apr
GRAINGER, the UK’s largest
quoted residential landlord, said
yesterday it expects a lift in the
value of its UK portfolio and an
improvement in sales when it
reports its half year results next
month.
The Newcastle-based company,
which operates in Germany as well
as the UK, said completed sales
from both portfolios in the six
months to the end of March will be
ahead of the same period last year.
Andrew Cunningham, chief
executive of Grainger, has been
focusing on cutting the group’s
overall level of debt, which stood
at £1.44bn at the end of January.
The group said yesterday that its
efforts to pay down debt “will
become evident” as a result of its
disposal programme in the past six
months. Numis analyst Chris
Millington, expects to see a £80m
reduction in debt in the full year.
“Grainger’s trading update
shows the group is making
progress across all the key areas of
its business. Rents are growing
strongly, values of sales are ahead
of September 2011 and net debt is
now starting to fall”, he said.
Grainger also anticipates both
rental income and fee income will
increase, mainly due to the
acquisitions of HI Tricomm and
the GenInvest portfolio last year.
However, the firm warned that
profits may be below those
achieved in the first half of 2011,
when it said pre-tax profit had
been “materially enhanced by the
partial reversal of mark to market
movements on its long term
financial derivatives and by gains
on acquisitions.”
Grainger is on
track to pay
down debt pile
BY KASMIRA JEFFORD
Churchill Mining seeks $2bn in
coal dispute with Indonesians
CHURCHILL Mining is heading to
an international court of
arbitration in May to fight for
$2bn (£1.25bn) compensation in a
dispute over an Indonesian mine
that has one of the world's biggest
undeveloped coal reserves.
Last week, Indonesia’s supreme
court moved to reject an appeal
by Churchill Mining which has
been fighting Indonesia’s
Nusantara Group for almost four
years over the rights to develop
coal reserves with a value that the
company estimates at $3bn.
BY JOHN DUNNE “If nothing happens, we would
proceed with lodging our
application around the end of
May,” Churchill’s executive
chairman, David Quinlivan said
yesterday, when asked whether the
matter would go to international
arbitration.
“The arbitration would take
place in a country that is neutral
to Indonesia and Great Britain,”
said Quinlivan, whose company
will seek 75 per cent of the value
of the asset, or about $2bn.
“It will be against the sovereign
nation of Indonesia, which
allowed our licences to be revoked
in what we say is an unfair and
improper manner.”
The 350-square-km (135-square-
mile) mine site in East Kutai, a
district in East Kalimantan
province, is estimated to contain
2.8bn tonnes of coal reserves.
Indonesia is the world’s top
thermal coal exporter, and its fast-
growing mining sector accounts
for about 12 per cent of its GDP.
From late 2007 until early 2008,
Churchill bought a 75 per cent
stake in Indonesian firm PT
Ridlatama, which it says received
four mining licences from the East
Kutai government, and then spent
about $50m on the project.
COMMERCIAL property developers
in Britain have enjoyed their
busiest month in more than two
years, according to research out
today.
Public sector work has expanded
for the first time since February
2010, while private sector
developers posted their first growth
in nine months, figures compiled
by Markit for Savills showed.
Around one in four commercial
developers recorded a rise in overall
activity in March, compared to 12
per cent who said that work was in
decline.
“Encouragingly, this recovery
appears to be broad-based and not
BY MARION DAKERS
just London-focused,” said Michael
Pillow, head of building
consultancy at Savills.
A net balance of 18.6 per cent of
developers outside London and the
south east reported a rise in
activity, the research said.
Industrial properties and
refurbishment jobs were the fastest-
growing sectors, with a net 17.2 and
13.6 per cent reporting growth
respectively.
A net balance of seven per cent of
firms working on public sector
office space, by contrast, reported a
dip in activity in March.
This is the best reading since
April 2010, however, and an
improvement on a negative balance
of 20.5 per cent in February.
Commercial property firms at
their busiest in over two years
Wenlock in costume Miniature taxi cabs
Branded breakfast bowls Multi-coloured pen lids Official London 2012 t-shirts
Engraved paperweights Wenlock on plastic cups Olympic figurines
LONDON 2012 IMAGE OF THE WEEK
Between now and the start of the
Olympics, City A.M. is publishing its
Olympic Image of the Week. If you
have a shot you think our readers will
like, please email [email protected]
with IOW2012 in the subject line. Full
details: cityam.com/london-2012
JOHN Lewis, one of London 2012’s sponsors,
has rolled out the official Olympic merchandise
to all of its UK stores. It will now offer over
3,000 products, a small selection of which are
shown above. Wenlock, the Olympic mascot,
and Mandeville, the Paralympic mascot, feature
heavily, alongside iconic symbols of London.
IN BRIEF
US jobs recovery slows down
nThe number of Americans newly
claiming unemployment benefits
unexpectedly rose last week to its
highest level since January, official
figures showed yesterday. New claims
rose 13,000 to 380,000 in the week to
7 April, and the previous week’s
claims were also revised up from
357,000 to 367,000. Falling numbers
of claims over recent months had
raised hopes that the economy was
accelerating, and economists hope the
downward trend can continue.
Warm weather boosts Eurozone
nEurozone industrial production rose
in February against January, beating
market expectations of a contraction,
but January’s output was revised lower,
official data showed yesterday. Warm
weather pushed industrial output up
0.5 per cent month-on-month in
February, though the annual figure
showed a 1.8 per cent fall on the same
month of 2011. Eurostat also revised
down previously released data to show
no change in output in January against
December from the previously reported
0.2 per cent increase.
Fed hawk in new call over inflation
nInflation in the US will be above tar-
get next year and may force the Federal
Reserve into earlier tightening than
expected, according to Minneapolis
representative Narayana Kocherlakota.
One of the Fed’s more hawkish econo-
mists, Kocherlakota said at a speech
last night that normalisation of interest
rates could begin as soon as late this
year – in contrast to Fed expectations.
G
E
T
T
Y
FRIDAY 13 APRIL 2012
17
NEWS
cityam.com
ECONOMISTS have warned that weak
international sales are dragging down
the UK’s economic growth, as official
figures yesterday revealed falling
goods exports in February.
The trade deficit rose for the sec-
ond consecutive month, up £0.9bn to
£3.4bn, driven by falling goods
exports to non-EU countries.
Furthermore, January’s deficit was
revised up from £1.8bn in initial esti-
mates to £2.5bn.
The goods deficit with EU countries
fell £0.4bn to £3.8bn in February,
while the deficit with non-EU coun-
tries rose from £3.7bn to £5bn.
Car exports led the drop, falling
£0.3bn to non EU countries includ-
ing the US, Russia and China, and
£0.2bn to EU countries.
Chemicals exports offset some of
those losses, rising £0.2bn, and oil
exports rose £0.1bn, largely to France
and the Netherlands.
Goods imports were almost
unchanged, with a £0.2bn rise in oil
imports offset by a £0.2bn drop in
intermediates,
BY TIM WALLACE
Services trade held steady with a
surplus of £5.4bn in February.
“These disappointing figures sug-
gest that net trade’s positive contribu-
tion to GDP growth in the final
quarter of last year is likely to have
been a one-off,” said Vicky Redwood
from Capital Economics.
“Barring a sharp narrowing in
March, the deficit in the quarter as a
whole will be about £2bn bigger than
the £7bn recorded in the fourth quar-
ter of 2012, equivalent to about 0.5
per cent of quarterly GDP.”
“Accordingly, it looks as though net
trade was a drag on GDP growth in
the first quarter.”
World Bank bullish on China’s
long-term growth prospects
CHINA’S economic growth will
slow to a 13-year low in 2012
according to a World Bank report
published yesterday, although it
should avoid the “hard landing”
feared by its leaders.
The report predicts growth of
8.2 per cent on the previous year,
firmly higher than the 22-year
low of 7.5 per cent forecast by
BY MICHAEL POOLER
Chinese Premier Wen Jiabao last
month.
A slowdown in growth of
consumption and investment
rates, coupled with weak external
demand, are behind the
predictions.
The headline figure indicates
the economy is expanding below
its potential, but this will
moderate the risk of overheating
and “[increase] the prospects of a
soft landing”, said to Ardo
Hansson, lead economist for
China at the World Bank.
The Bank believes this will
create room for policy responses
laying foundations for sustainable
long-term growth.
Next year will see a fillip as
economists predict a boost in
growth of 8.6 per cent, a sharper
bounce than had been predicted
last November.
CENTRAL bank cash and European economic reforms have created “some
improvement in the economic climate,” said International Monetary Fund (IMF) boss
Christine Lagarde yesterday. But “the risks remain high, the situation fragile,” she
warned, urging IMF members to give the fund more cash to combat financial crises.
LAGARDE WARNS OVER SOVEREIGN FLARE UP
The UK’s trade deficit widened again in February
Feb
2011
Apr
2011
Jun
2011
Aug
2011
Oct
2011
Dec
2011
Feb
2012
2
0
-2
-4
-6
£
b
illio
n
, s
e
a
s
o
n
a
lly
a
d
ju
s
te
d
Weak exports
weigh on GDP
growth hopes
TIGHTER credit conditions are
starting to impact on lending to
home-buyers, according to chartered
surveyors’ figures published today.
Loans for home purchase dropped
to 43,450 in March – an 11 per cent
drop on February and the lowest
since December 2010, e.serv’s
mortgage monitor revealed.
First-time buyers particularly
suffered, with loans for homes
under £125,000 falling 14 per cent,
BY TIM WALLACE
from 12,247 in February to 10,428.
Banks were also increasingly
reluctant to lend to those with
small deposits – only 10 per cent of
loans went to buyers with deposits
below 15 per cent.
“Until now high-street mortgage
lenders have been able to absorb
steadily increasing costs, rather
than passing them onto the
consumer,” said e.serv’s Richard
Sexton. “Mortgage availability will
continue to fall in the next three
months.”
House buyers suffer as credit
conditions batter mortgages
FRIDAY 13 APRIL 2012
18
LONDONREPORT
Norton Rose
The law firm has announced two
new partner hires. Maartje
Govaert (pictured) joins as an
employment partner from De
Brauw Blackstone Westbroek and
Herman Wamelink joins as a
banking partner from Allen &
Overy. Govaert has 13 years
experience practising
employment law in London, New
York and Amsterdam, and Wamelink has broad experience
advising financial institutions on acquisition transactions.
Brookfield Investment Management
The investment management firm has announced that Mark
Northway is joining as managing director. Northway has
over 20 years experience in the industry, and most recently
was global head of credit capital markets at Landesbank
Baden-Wuerttemberg.
Man Group
Ravi Chari has been appointed co-head of foreign exchange
at AHL, Man’s systematic managed futures manager. Chari
joins from Ikos Asset Management, where he headed its
futures and FX funds. He was previously portfolio manager
at Millenium Partners, and has worked for DKR Capital.
PwC
Guy Shepherd has been recruited to lead PwC’s actuarial
systems and modelling services. Shepherd joins after 17
years at Prudential, where he was most recently head of
actuarial and business intelligence systems and responsible
for implementation of its IT programme underpinning
Solvency II.
Bullabulling Gold
Peter Mansell has joined the mining exploration firm as
non-executive chairman. He was over 35 years experience
in corporate law and has served as director of West
Australian Newspapers and Zinifex.
Law Society
The professional body for solicitors has elected Andrew
Caplen to the post of deputy vice president, effective July
2012. Caplen has been a council member since 2000 and is
due to become president of the society in 2014.
Zomm
The technology firm has announced the appointment of
Mike Lanphear as vice president of global sales. Lanphear
has held executive roles at Verizon/GTE and Openwave, and
most recently was director of global business for Zvelo.
Smith & Nephew
Baroness Virginia Bottomley, the former MP, has been
appointed non-executive director of the medical
technology firm Smith & Nephew. She is also non-executive
director of Bupa and a trustee of The Economist.
WHO’S SWITCHING JOBS Edited by Tom Welsh
+44 (0)20 7092 0053
morganmckinley.com
SPECIALISTS IN GLOBAL PROFESSIONAL RECRUITMENT
Second day of
bounce back
on Wall Street
U
S stocks scored a second day of
solid gains yesterday, led by
materials and energy stocks,
as investors set aside weak
figures on the domestic labour
market.
Rumours about strong growth fig-
ures due overnight from China
helped wash away some of the wor-
ries that hit stocks during a five-day
streak of losses that ended with
Wednesday’s rebound.
Basic materials shares led gains as
commodity prices advanced. The S&P
materials sector index jumped 2.8 per
cent. US Steel gained 7.5 per cent to
$29.36. Freeport-McMoRan Copper
& Gold rose 5.9 per cent to $37.89 and
an index of gold and silver miners’
shares rose 3.7 per cent.
Overall the Dow Jones industrial
average jumped 181.19 points, or 1.41
per cent, to 12,986.58 at the close. The
Standard & Poor’s 500 Index gained
18.86 points, or 1.38 per cent, to
1,387.57. The Nasdaq Composite Index
climbed 39.09 points, or 1.30 per cent,
to 3,055.55.
The rebound pushed the S&P 500
back above its 50-day moving average,
a sign that traders may see the recent
pullback of more than four per cent
as an opportunity to catch up with
the benchmark’s gains. The index is
up more than 10 per cent in 2012.
Concerns about the Eurozone’s debt
crisis were eased by lower Italian
bond yields.
Benchmark bond yields in Italy and
Spain dropped following solid
demand at this week’s Italian debt
auctions, while the euro hit a one-
week high against the US dollar, indi-
cating a reduction in near-term
concern about the Eurozone’s debt
troubles.
In a sign that the US labour mar-
ket’s recovery may be stalling, govern-
ment data showed new US claims for
unemployment benefits rose unex-
pectedly last week to their highest
level since late January. But some
economists cited the Easter holidays
for the spike in claims, adding that
they expected applications will keep
declining in the weeks ahead.
Google shares rose one per cent to
$657.67 in extended trading after the
company reported its quarterly
results and announced a proposal to
effectively implement a 2-for-1 stock
split.
After the bell, shares of Dow
Chemical rose 1.8 per cent to $33.25
after the company boosted its quarter-
ly dividend by 28 per cent and fore-
cast earnings growth for the
foreseeable future.
Early into earnings season, results
are beating Wall Street’s expectations
at a fast clip. Analysts say the expecta-
tions could have been lowered too
much and stocks can seem cheap
after the S&P’s recent pullback of over
four per cent.
“Earnings so far have been better
than expected, and that reinforces
the view that forecasts had gotten too
pessimistic,” said David Joy, chief mar-
ket strategist at Ameriprise Financial.
B
RITAIN’S top share index hit a one-
week closing high yesterday as
mining stocks jumped on market
talk that China, the world’s
biggest metals consumer, could report
strong economic growth numbers today.
Economists polled by Reuters in March
forecast that China’s GDP expanded 8.3 per
cent in the first quarter of 2012 versus a year
earlier. But several traders cited market talk
of a nine per cent rise, prompting investors
to snap up equities.
The UK mining index climbed 3.1 per
cent, extending its recent rally, also helped
by firmer copper prices , which rose fur-
ther above technical support at $8,000 a
tonne as worries over the global economic
outlook eased.
Global miner Rio Tinto rose 4.5 per cent,
Vedanta was up 2.9 per cent, while BHP
Billiton gained 2.8 per cent. The sector
helped the FTSE 100 index to finish 75.72
points, or 1.3 per cent, higher at 5,710.46
points, the highest close since 5 April.
“This speculation [on Chinese GDP growth]
helped to increase near term demand for
stocks whilst US trade data also boosted risk
appetite,” said Joshua Raymond, chief mar-
ket strategist at City Index.
The US trade deficit narrowed unexpect-
edly in February as exports hit a record
high, imports from China and other key
suppliers declined and oil import volume
fell to the lowest in 15 years.
“A stronger than expected reading in
Chinese GDP data would be hugely impor-
tant for calming fears of a sharp slowdown
in global growth. And considering much of
the FTSE 100’s prospects are weighted in
the performance of heavyweight mining
stocks, the reading will play a strong role
in how the FTSE 100 opens today.”
UK banks were also in demand, with a
fall in Italian bond yields after clearing its
latest round of auctions improving senti-
ment towards the financial sector. The
banking sector suffered heavily last year as
many banks were highly exposed to debt-
laden peripheral Eurozone economies.
Banks rose 2.2 per cent, while Barclays
was up 5.4 per cent. Lloyds gained 4.3 per
cent as New banking venture NBNK made
a fresh bid for 632 Lloyds bank branches.
Charts showed positive near term signs,
after the FTSE 100 bounced back on
Wednesday from a support level of 5,570,
which provided a floor in January. “The
index is set for a rebound. Its nine-day RSI
(relative strength index) fell into the over-
sold zone yesterday and coincided with the
support level,” said Julian McCormack,
technical analyst at Brewin Dolphin.
However, Michael Jarman, chief market
strategist at H2O Markets, remained cau-
tious and said the rally in share prices was
just a short-term technical bounce and due
to encouraging US trade balance deficit fig-
ures. “I’m still fairly defensive and expect
any short term moves to be short-lived.”
Among individual movers, autos and
aerospace parts firm GKNtopped the FTSE
100 risers’ list, up 6.2 per cent, as Credit
Suisse upped its rating to “outperform”
from “neutral”.
Its shares were also supported by a 49 per
cent jump in British aerospace parts sup-
plier Umeco after specialty chemicals
maker Cytec Industries said it had made
an offer valued at about $439m for Umeco.
Aggreko gained 3.1 per cent as the
world’s biggest temporary power provider
said underlying revenue had risen by more
than 20 per cent in the first three months
of the year, putting it on track for further
growth in 2012. Aggreko’s trading volume
was 2.5 times its 90-day daily average.
Royal Dutch Shell recovered to end 0.8
per cent lower after said a sheen discovered
in the water near its offshore Gulf of
Mexico oil wells was estimated to total
about six barrels of oil and that its facilities
showed no signs of leaks.
Miners lead FTSE higher on hopes
of strong economic growth in China
BESTof theBROKERS
GKN PLC
5Apr 4 Apr 10Apr 11 Apr 12Apr
210
190
195
200
205
p
203.30
12 Apr
GKN
Credit Suisse has upgraded the carmaker from “neutral” to
“outperform” and has left its target price unchanged at 240p. The
broker points out that GKN’s shares have underperformed the sector
by four per cent in the last month, thanks to concerns over its possible
purchase of Volvo Aero, providing a buying opportunity. Credit Suisse
reckons GKN is in pole position to buy Aero, now that MTU has pulled
out of the race.
African Barrick Gold PLC
5 Apr 4 Apr 10 Apr 11 Apr 12 Apr
400
370
350
360
380
390
p
351.20
12 Apr
AFRICAN BARRICK GOLD
Goldman Sachs has downgraded the miner from “neutral” to “sell”
and has cut its target price from 570p to 380p. The broker sees ABG as
a “structural laggard” compared to fellow gold companies, with lower
growth and higher costs. Goldman has also recently lowered its
forecasts for gold prices this year as the US economy continues to
recover.
Tesco PLC
5 Apr 4 Apr 10 Apr 11 Apr 12 Apr
340
325
320
330
335
p
325.85
12 Apr
TESCO
Nomura rates the supermarket “buy” with a target price of 430p. The
broker expects to see pre-tax profit up 2.7 per cent at £3.9bn when
Tesco reports its full year results next Wednesday, with a UK margin of
5.7 per cent. Nomura also flags up Tesco’s real estate strategy as an
issue to watch, with a shift towards smaller stores expected as it
moves away from opening new hypermarket-sized outlets.
5,710.46
12 Apr
5,850
5,750
5,700
5,800
5,600
5,650
FTSE
4 Apr 5 Apr 10 Apr 11 Apr 12 Apr
DASHBOARD CITY
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FRIDAY 13 APRIL 2012
19
MARKETS
cityam.com
I
N THE tradition of digital success
leading to massive antitrust
lawsuits, the US Department of
Justice (DoJ) this week filed a suit
against Apple and five publishers
for allegedly conspiring to keep
ebook prices artificially high. Apple’s
epublishing rival Amazon rubbed
salt on the wound by promptly
cutting its Kindle ebook prices even
further. But no one should be too
smug. The upturning of traditional
publishing models has only just
begun and neither Apple nor
Amazon – certainly not a DoJ
prosecutor – has the answer to where
it will all end up.
Some think that Apple and the big
publishers should be seen as heroes,
bravely defending a model that
I
T IS difficult to think of an issue
that has generated more self-
righteous moralising by politicians
of all parties than the recent furore
over “abusive” tax avoidance. Some
of the pronouncements emanating
from Westminster would lead one to
believe that tax avoidance is one of the
great crimes of our age. Except it’s not
a crime.
What has been overlooked in the din
of the debate is that tax avoidance is
perfectly legal and, one might say,
mandatory. Is the company director
who fails to take all legal steps to min-
imise the company’s tax liabilities real-
ly doing his best as a custodian of the
company’s assets?
However, the question has become: is
tax avoidance moral? With the econo-
my and public finances in bad shape, is
it right for individual taxpayers to seek
to minimise their liabilities? Surely, the
moralists argue, it is incumbent on
each and every one of us to pay our fair
share?
The current explosion of comment
comes as no surprise. It suits the gov-
ernment very well to promote and fos-
cityam.com/forum
To suggest taxpayers
should be the arbiters
of the right amount of
tax is arrant nonsense
In association with
THEFORUM
Twitter: @cityamforum on the web: cityam.com/forum or by email: [email protected]
Agree? Disagree? Got a sharp comment?
The Forumwants you to join the debate.
Top responses will be reprinted in The Forum.
‘
20
FRIDAY 13 APRIL 2012
ANDY WHITE
Government fails the moral code
it is now demanding of taxpayers
ter a view that tax avoiders are bad and
their activities are damaging to the
country. Attacking tax avoiders rein-
forces the government’s mantra that
“we’re all in it together”.
To further shape the debate, the gov-
ernment has deliberately blurred the
distinction between avoidance and eva-
sion by tacking the word “abusive”
onto the former. Exchequer secretary
to the Treasury David Gauke was
recently quoted as saying: “Aggressive
tax avoidance is anti-business and busi-
nesses should pay their full tax”.
Previous announcements have referred
frequently to taxpayers paying the
“right” amount of tax, while George
Osborne has repeatedly expressed his
outrage at the activities of those tax-
payers who follow the advice of the
Lord Justice General, Lord Clyde, who
famously said: “No man in the country
is under the smallest obligation, moral
or other, so to arrange his legal rela-
tions to his business or property as to
enable the Inland Revenue to put the
largest possible shovel in his stores.”
Is the government seriously suggest-
ing that taxpayers should look at their
income and gains and decide what tax
bill it would be fair to pay? There-in lies
anarchy.
The problem here is that, despite the
government’s efforts to redefine the
English language, there is no such
thing as the “right amount” of tax and,
if there were, it would not be for HMRC
or, still less, taxpayers to define what it
is.
But more crucially, if the government
wants us to behave in this utopian way,
it has an obligation to do likewise.
Should it not also only claim the “right
amount” of tax?
In a recent VAT case, heard on 22
February in the first-tier tribunal,
Hung On Chan, a restaurateur, had for
many years deliberately overpaid VAT
so that he could be absolutely sure that
he would not be penalised for under-
paying. These are unusual circum-
stances, but those are the facts.
His accountant subsequently pointed
out to him that this was unnecessary,
so he adjusted later his VAT returns to
recover what he had overpaid.
Sensible? Law-abiding? Not in the eyes
of HMRC.
Because the “error” was deliberate,
he should have used a different
method for reclaiming the overpay-
ment. Instead of adjusting future
returns, he should have made a volun-
tary disclosure. The financial effect
would have been identical, but the
process different. But because he used
the wrong procedure, he lost his case
and wasn’t allowed to reclaim the VAT
that everyone agreed he had overpaid.
So did Chan pay the right amount of
tax? Did HMRC rely on an accurate, but
unfair, reading of the legislation to
maximise its position? Does any of this
sound familiar?
Tax liabilities should be assessed in
accordance with laws made by parlia-
ment. If gaps and loopholes appear,
then it’s quite right and proper that
laws should be amended to correct the
situation. But to suggest that taxpayers
should somehow be the arbiters of
what is the right amount of tax is
arrant nonsense and a complete abro-
gation of responsibility.
This is not a moral question any more
than it is a moral question for drivers
to decide on the right speed limit for a
particular stretch of road.
But if the government insists on tax-
ing us in accordance with some sort of
moral code, shouldn’t it instruct HMRC
to do exactly the same?
Andy White is a tax partner at Carter
Backer Winter.
allows them to produce books of real
quality and authors to make a living.
On this view, the DoJ is merely a
hapless stooge of Jeff Bezos as he
ruthlessly uses content as a loss-
leader to gain market share.
But anyone who thinks like that is
in for a nasty shock. First of all,
Apple is also in the business of
undercutting traditional publishing.
As Walter Isaacson’s biography of
Steve Jobs revealed, Jobs planned
that the iPad would be a
replacement for textbooks, the
prices of which have spiralled in the
US to over $200 (£125). Jobs thought
the market, which has also been
accused of cartel-like tactics to
maintain its pricing levels, was “ripe
for destruction”. After the launch of
iBooks 2 this January, with a clear
focus on educational content, Apple
clearly has textbooks in its sights.
Some publishers may have found it a
temporary ally, since Apple came late
to Amazon’s ebook party and needed
to get on the right side of
rightsholders, but there’s no reason
for that to last. Apple has been pretty
ruthless in its attitude to other
ebooksellers, changing the rules of
its app store in its own favour. It isn’t
going to be any more sentimental to
Hachette, Macmillan, Penguin and
the others when the time comes.
That doesn’t make Amazon the
hero of this story, either. True, its
wholesale price model does more to
recognise the disruptive nature of
electronic publishing, where
marginal costs fall to zero. But it is
hardly innovative, simply replicating
an approach long accepted for
physical books. Meanwhile Amazon’s
commitment to digital rights
management (DRM) via a dedicated
Kindle format harks back to the
most short-sighted policies of the
music industry’s traumatic
encounter with digital disruption.
With many ereaders barely out of
their Christmas wrapping paper, it is
far too early to tell what publishing’s
future will look like. But it would be
foolhardy to trust either Apple’s
strategic commitment to agency
pricing or Amazon’s gated Kindle.
Far more intriguing is Amazon’s
Kindle Direct service, which has
already allowed 26-year-old Amanda
Hocking to become a self-published
millionaire, while selling books at
$0.99 a copy, making even Amazon’s
$9.99 bestsellers look absurdly
overpriced. With that kind of supply
chain disintermediation on the
horizon, government lawyers are the
least of the industry’s worries.
Marc Sidwell is City A.M.’s business
features editor.
THE LONG
VIEW
MARC SIDWELL
Publishing’s future hangs in the balance: This is no time to pick winners
21
Kamall on Barnier
[Re: I value the City: EU commissioner
responds to criticisms, yesterday]
Michel Barnier’s reply falls short on specifics
and won’t reassure London hedge funds
and private equity houses. Barnier holds
hundreds of meetings with the industry, but
listening to what is said at them is another
matter. The industry doesn’t have faith in a
process that gives it a few weeks to
scrutinise technical detail and make
representations, which are then dismissed
in a high-handed fashion by officials. He is
right that the European Parliament and
Council can reject these implementing
measures. But, when they are so specifically
targeted at the UK’s industry, it’s hard to
form coalitions with states that either
couldn’t care less or have a continental
approach to free markets. He is slipping
through controversial measures with limited
democratic scrutiny. At one meeting,
technical measures were discussed in
French, with no translation for those whose
primary language was English. I believe in
proportionate and necessary regulation.
That’s why I’m concerned by this tidal wave
of directives. While I recognise that the EU is
mandated to implement G20 commitments,
it should remember that the G20 also
agreed to keep markets open. The most
important lesson for London's financial
services industry is that European
regulators require often inflexible rules.
They’ll fill in gaps during the Level 2 process
rather than rely on principles and reason.
SyedKamall, ConservativeMEPfor London
The Forum is open for you to take part. Got a sharp comment
on one of today’s columns? Do you have another subject you
want to share your opinion on? We want to hear your views.
Email [email protected] or visit cityam.com/forum
W
ITH a sense of
inevitability the
spotlight has landed on
Spain. Though the
headlines proclaimed
that the Eurozone crisis has
returned with a vengeance, the
truth is it never left. Spain is not
Greece, but, many of the market
fears surrounding the economy are
still both well-founded and
expected. There are three major
causes of concern: the exposure of
Spanish banks, regional
governments’ fiscal profligacy and
a risk that structural reforms won’t
reap benefits soon enough.
The vulnerable banking sector
remains the likely trigger for any
future downturn in Spain. One in
five of the loans by Spanish banks to
the bust real estate and construc-
tion sectors is seen as “doubtful”, i.e.
at serious risk of never being repaid.
Against some €136bn (£112bn) in
potentially toxic loans, Spanish
banks hold only €50bn in loss provi-
sions. And things are likely to get
worse. House prices have declined
quickly over the past six months
and may fall by another 35 per cent,
if there is to be the same level of
adjustment as seen in Ireland.
This is troubling, firstly, because
Spain cannot afford to bail out its
banks. And, secondly, because
Spanish banks have been the main
recent buyers of Spanish sovereign
debt. If these banks don’t have the
cash to buy Spanish debt, then who
will? This massively increases the
prospect of a self-fulfilling bond run
on Spain and the chances of an ill-
fated Spanish bailout.
Not to be outdone, the regions
look to be harbingering plenty of
problems of their own. The regions
have seen the amount of unpaid
debt on their books rise by €10bn
(38 per cent) since the start of the
TOP TWEETS
Is there more the FCO can do to boost trade
diplomacy? [Re: Look behind the headlines
for the real story on UK trade diplomacy,
Wednesday] << Interesting article. Answer is
yes, and yes we are.
@WilliamJHague
The key point is that the government will do
nothing to undermine house prices.
@DBSSays
Like job creation, housing supply ultimately
will improve through private sector initiative.
@gpolitica
Ken Livingstone lost his job because of his
policies. Now people want him back? They
deserve all they get, but why should I suffer?
@Sulalee1
Should George Osborne reverse the cap on
income tax relief for charitable donations?
YES
This proposal needs an urgent rethink before it does irreversible
damage. Major donors face at least six months of confusion and
charities are already losing gifts as a result. High-level donations
form a significant proportion of voluntary income, and framing tax
relief on donations to charity as a tax avoidance measure betrays a
serious lack of judgement. The generous should be supported, not
pilloried. Nearly 1,000 organisations have signed up to the “Give it
Back, George” campaign, voicing fears about the impact that the
cap could have on their ability to deliver vital projects and services.
It’s not just “household name” charities that stand to lose out; small
grassroots organisations, and a range of faith groups, cathedrals,
arts organisations and universities, are putting up a united front. In
these challenging times, we need more philanthropy, not less.
Stuart Etherington is chief executive of the National Council for
Voluntary Organisations.
Sir Stuart Etherington
NO
JP Floru
The charitable donations incident deflects from the tragedy of zero
growth. Instead of the Treasury’s increasingly desperate measures
to go after the last crumbs, it should allow the pie to grow. That
means we shouldn’t reverse Osborne’s decision but go further,
replacing our complex system of reliefs with a flat income and
corporation tax rate of 15 per cent. Excessive tax avoidance results
from excessive tax levying. If taxes were reasonable, nobody would
bother avoiding them. The light of aspiration and prosperity would
wake up the country from its slumber and create a sustainable
economic boom in no time at all. Jobs and hope would replace dole
and dependency. The poorest could finally climb the ladder without
the need for charity or government hand-outs. With the increased
tax receipts we could start paying back the national debt. It has
been done before; it can be done again.
JP Floru is senior research fellow at the Adam Smith Institute.
RAPIDresponses
The pain in Spain
has put its banks
back on the rack
crisis. The total in unpaid bills now
tops €36bn. Yet again, this cost is
likely to be transferred to the cen-
tral government, which can ill
afford it, and risks the country miss-
ing its deficit target, further
fuelling market jitters. The regions
are also expected to contribute 44
per cent of the planned deficit
reduction this year. But with the
budget still hot off the press, the
largest and wealthiest regions are
already rejecting Madrid’s ordered
spending cuts.
The good news is that the new
Partido Popular government is
pushing through some much need-
ed structural reforms.
Unfortunately, it will take time for
the benefits to be felt, and in the
short term they are likely to
increase already skyhigh unemploy-
ment while doing little to boost lag-
ging demand.
Spain remains a serious and
diverse economy, with relatively
good administration and infrastruc-
ture – talk of a full bailout pro-
gramme is premature. The most
likely outcome is some sort of aid
for the banking sector – probably
with the help of the European sta-
bility mechanism. As much as we
hate seeing risk being transferred to
taxpayers, it might be better for
Spain to swallow this bitter pill now
and ask for aid for its banks, than
risk it dragging the whole economy
– and the euro – over the edge.
Raoul Ruparel is the head of economic
research for Open Europe.
FRIDAY 13 APRIL 2012
RAOUL RUPAREL
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Above: Pond Bay. Left: a
relaxation area outdoors.
Right: Elegant architecture
frames the ocean from every
angle.
A pair of ocean idylls
in the BVI and Mallorca
This Port D'Andratx
stunner offers the
best of sunny luxury
I’m fairly sure it doesn’t get
much better than 100 Pond Bay
for a paradise island getaway. This
newly built, 8,000 sq ft BVI idyll is a
five minute drive from the Virgin
Gorda yacht harbour, commercial
centre and main ferry dock of
Spanish Town.
The house, which includes its
own spacious spa, is set back from
the water and slightly elevated,
affording views to drool over. A
private path leads you to Pond Bay’s
beaches (pictured) in no time.
What’s extra great about it,
though? The design, we say: the
property is sun-filled year round
and designed to ensure that the
main pavilion and each of five
dreamy bedroom suites have
unobstructed views of the ocean
and neighbouring islands.
What about the land? Located on
an acre of virgin hillside, 100 Pond
Bay is brushed by strong tropical
breezes. A private entrance through
a beautifully landscaped area leads
to parking for the main pavilion
and each suite. We should hope so.
$8.7m through Knight Frank.
www.knightfrank.com or call Christian
de Meillac on: (44) 90020 7861 1097.
22
FRIDAY 13 APRIL 2012
cityam.com
PROPERTYDREAM HOMES
A state-of-the art villa to make
your glitziest friends weep with
jealousy – but at least they’ll be able
to stop off on their yacht tour round
the Med and see you.
This 540 sq m, four to five bedroom
pad revolves around sun and water,
with a magnificent pool area with
sauna and Jacuzzi, an array of
terraces both open and covered (of
course), extravagant summer BBQ
equipment and a three-car carport.
The architecture is wonderfully
futuristic, done up to outstanding
specifications and fittings, with
under-floor heating, sophisticated
air conditioning, picture windows,
designer floors, Bose-sound system,
elaborated lightning system,
comprehensive.
The ground floor includes an
ample entrance hall, light-flooded
living and dining room and fully-
fitted guest wing. The kitchen is all
Poggenpohl.
The property itself, set over an acre,
is so lovely it’s unlikely you’ll want to
leave. But if you do, Port D’Andratx
is a gorgeous town, surrounded by
striking, rugged terrain. Its harbour
attracts the great and the good:
celebrities known to favour the Port
include Claudia Schiffer, who has a
home there.
€9.8m through Knight Frank
Relaxing space
overlooking the Med, and
right, the high-spec
kitchen.
WORDS BY
ZOE STRIMPEL
Knot House SE1
£650,000 leasehold
A duplex apartment set in the heart of Shad Tames & ofering 2 double bedrooms,
2 bathrooms (1 en-suite), reception room with balcony overlooking Tower Bridge Piazza,
separate kitchen with balcony & underground parking.
Abbey Street SE1
£1,350 per week
A unique warehouse conversion boasting exposed brickwork, dual aspect windows,
high ceilings & wooden foors. Te accommodation comprises a large reception room,
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Baltimore Wharf E14
£635,000 leasehold
A stylish 2 bedroom duplex apartment in this brand new dockside development located
close to Canary Wharf. Boasting fxtures & fttings of an excellent standard, the apartment
also benefts from valet parking & 24 hour concierge.
Eaton House E14
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A stunning apartment in the prestigious Canary Riverside development in Canary Wharf.
Te property comprises 2 double bedrooms, 2 bathrooms, separate fully ftted kitchen &
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Tower Bridge & City
020 7357 7999
[email protected]
Tower Bridge & City
020 7357 6911
[email protected]
Canary Wharf & Docklands
020 7510 8300
[email protected]
Canary Wharf & Docklands
020 7510 8310
[email protected]
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BAROMETER
ED MEAD
DIRECTOR OF DOUGLAS & GORDON
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FRIDAY 13 APRIL 2012
cityam.com
PROPERTYSALES
1200
1000
800
600
400
200
0
Jan2012
high(1029)
Dec 2011
low(211)
Sep Oct NovDec Jan Feb Mar Apr MayJun Jul Aug
2010 2011 2012
Demand
500
400
300
200
100
0
Sep Oct NovDec Jan FebMar Apr MayJun Jul Aug
July 2010
high(448)
Dec 2006
low(127)
Supply
2010 2011 2012 Demand 2012
Demand 2011
Supply 2012
Supply 2011
Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec
1600
1400
1200
1000
800
600
400
200
0
Supply & Demand
DOUGLAS & GORDON AVERAGE LONDON SALES PRICE INDEX
Q1 2011 Q2 2011 Q3 2011 Q4 2011
1 bed flat £ 368,333 £ 374,167 £ 383,750 £ 383,500
2 bed flat £ 543,333 £ 557,083 £ 570,083 £ 579,583
3 bed house £ 1,174,167 £ 1,209,583 £ 1,257,500 £ 1,277,083
4 bed house £ 1,780,833 £ 1,905,833 £ 1,905,000 £ 1,933,333
“Securing a mortgage in
the current market has
never felt so hard and
creeping mortgage
rates, with many lenders
adding half a percent to
Standard Variable Rates,
are adding to the tough
conditions. However,
against a backdrop of
continuing short supply,
D&G has managed to
increase its market
share. Longer opening
hours and a renewed
focus on marketing by all
our offices has paid off
with one of our best
months for new business
in the last four years as
buyers who are in a
position to buy move
quickly to secure a deal.”
Properties are still short in supply, but swift buyers can still grab a good deal
FRIDAY 13 APRIL 2012
26
cityam.com
PROPERTY FOCUS ON
CURRENT MORTGAGE DEALS Source: MoneySupermarket.com
Lender Fixed/Flexible Rate Until APR Maximum Loan
(per cent) (per cent) to Value (per cent)
Chelsea BS Flexible 2.39 May 2014 5.4 70
Norwich & Peterborough BS Flexible 2.49 2 Years 4.7 75
Yorkshire BS Flexible 2.49 June 2014 4.7 75
Vernon BS Flexible 2.6 2 Years 4.7 70
First Direct Flexible 2.69 2 years 2.8 65
HSBC Fixed 2.54 June 2014 3.9 60
Market Harborough BS Fixed 2.69 April 2014 5.1 75
Hanley Economics BS Fixed 2.69 April 2014 5.1 60
Chelsea BS Fixed 2.94 May 2015 5.3 70
BEDFORD ROAD
Price: £3.1m
This six-bedroom estate is a great property for relaxation with a south facing garden and a roof
terrace. It has two shower rooms and a bathroom. With two reception rooms, the property is per-
fect for social gatherings. Contact savills.co.uk or 020 8987 5550
FOCUS ON: CHISWICK
HARTSWOOD ROAD
Price: £1.9m
This semi-detached family house features five bedrooms, two reception rooms and a spacious
entrance hallway. The house has three floors and is approximately 227 square meters. Outside, it
has a large west-facing garden. Contact savills.co.uk or 020 8987 5550
THE OLD BURLINGTON
Price: £1.25m
Dating back to the XV century, this historic grade II house was formally “The Burlington Arms”.
With a cellar and a courtyard, this spacious three bedroom home is great for a family looking for
a piece of history. Contact savills.co.uk or 020 8987 5550
CHESTERFIELD ROAD
Price: £3m
This seven-bedroom house has been extensively refurbished to attract a large family. It includes an
integrated but self-contained flat, perfect for a nanny or relative. It features a wine cellar and five
reception rooms. Contact savills.co.uk or 020 8987 5550
FRIDAY 13 APRIL 2012
27 PROPERTY FOCUS ON
CHISWICK WHARF
Price: £1.2m
This four bedroom, two bathroom property is located close to the Chiswick Mall, a prime walking
path with a great view of the River Thames. This Georgian style townhouse offers rear views
across communal gardens, and features two formal reception rooms and a separate garage.
Contact chesteronhumberts.com or 020 8995 3443
HUNTINGDON GARDENS
Price:£950,000
Forming part of a private development of apartments and houses, this four bedroom townhouse
features modern designs, including a modern fitted kitchen and breakfast room. This property
has a garage and off street parking, three bathrooms and a west facing garden. Contact ches-
teronhumberts.com or 020 8995 3443
STRAND ON THE GREEN
Price: £795,000
A charming terrace cottage, this property has picturesque views across the river towards the
Kew Bridge. This smaller property is great for a young family with two bedrooms, a modern
kitchen and spiral stairs leading to the first floor. Contact chesteronhumberts.com or
020 8995 3443
CHISWICK HIGH ROAD
Price: £750,000
A spacious split-level flat, this period house has three bedrooms, a large reception room and a
separate kitchen/breakfast room. Outside, it has a south facing garden and off-street parking.
Contact chesteronhumberts.com or 020 8995 3443
COMMUTING AND EDUCATION
A popular suburban retreat from London,
Chiswick is located at the start of the M4,
which provides a direct route to Heathrow
Airport and the M25. There’s plenty of
transportation nearby with the Chiswick
National Rail station and the District line
crossing through the region as well, giving
access to the city. Chiswick also boasts a
great variety of schools, including top
ranked St Mary’ RC School, Grove Park
Primary School, and Westminster Under
School.
WHAT IS THERE TO DO?
Chiswick has a lively sports culture, home
to a number of local rugby teams and the
Rocks Lane Multi Sports Centre, where
tennis, football, and netball courts are
available for hire to the public. Since the
area is located on a meander of the
Thames River, competitive and recre-
ational rowing is popular. It has a mix of
trendy shops, restaurants, and pubs.
Outdoor activities include the Chiswick
Mall and the Gunnersbury Triangle Nature
Reserve.
NEED TO KNOW| AREA INSIGHT
LOCAL AREA
|
PRICES
SOURCE: LAND REGISTRY
Detached Semi-Detached Terraced Flats
Chiswick £1.2m £1.3m 810,000 £380,000
Don’t be fooled – The Cabin in the Woods is not your average teen slasher movie
T
he killer killed. The
inevitability and
unfathomability of death.
Death, death, death. Spot,
spot, death, spot, death. You
know what you get with Hirst.
His pickled shark has
become shorthand not just
for his body of work but
for a generation of
modern art, as have his
ubiquitous spots, which
follow you around the
Tate like a recurring
migraine.
His career has
seen him shift
from the man
who put British
modern art on
the map, to the
artist people
loved to hate,
to – judging by
the reception of his last show –
the man they just hate.
This retrospective is a reminder
that the first opinion was
justified. There isn’t a single piece
that isn’t instantly recognisable as
Hirst’s. His fascination with death
has seeped so far into the public
consciousness that seeing these
works collected feels a bit like
going to a family reunion, or,
perhaps, a brightly coloured
funeral.
The “live” installations are
the real crowd pleasers. It is
hard not to gawp with a
school-boy’s morbid
fascination at A Thousand
Years, his giant tank
featuring maggots hatching
into flies, feasting on the
congealed blood of a
rotting cow’s
head, only to be
fried in a tiny
burst of
electricity in a nearby bug-zapper.
A room full of live butterflies,
preceded by works crafted from
the corpses of their dead cousins
is another neat demonstration of
the fragility of life. His later work
seems to revel in its own
crassness – topped by a room
dripping in gold and diamonds –
as he struggled to integrate his
fame and wealth into the
recurring themes of his work.
And then, there is his
installation in the Turbine Hall:
For the Love of God (which,
incidentally, is what you’ll say
when you see the size of the
queue). It takes balls to put a
single skull, albeit a rather
glittery one, in the biggest display
space in the country. But this is
Hirst – balls are not something he
lacks.
The final room of his exhibition
is – fittingly – a shop: a two-
fingered salute, perhaps, to those
who deride his work as mass-
produced and profit-obsessed.
Spot t-shirts, butterfly umbrellas,
skull hoodies. And, if you have a
couple of grand to spare, your
Hirst’s Tate retrospective is brash,
crass and completely compelling
LIFE&STYLE
FRIDAY 13 APRIL 2012
29
cityam.com
GOING OUT
FILM
DELICACY
Cert 12A
hhhii
FILM
THE CABIN IN THE WOODS
Cert 15
hhhhi
ART
DAMIEN HIRST
Tate Modern
hhhhi
‘
Cabin in the Woods has the goods
T
he Cabin in the Woods is one of
those films you really need to
see before you read about it.
Ideally, you should stumble
across it by mistake. I suggest running
blindfolded into a cinema with your
fingers crammed into your ears and
hoping that by sheer bloody-minded
willpower you end up sitting in the
right screen as the film starts. This, of
course, puts me in a rather difficult
position. So… Well, this is awkward.
I will endeavour not to give too much
away. For the first half hour, you will
probably wonder what all the fuss was
about. It looks, on first sight, like a
photo-fit teen slasher movie (an
American teen slasher movie: this is
important but I can’t tell you why).
The five protagonists roll straight off
the horror production-line. You have
the slutty blonde, the jock, the stoner,
the hot geeky girl and the sensitive
bloke. They go on a spurious road trip
to a mysterious cabin, which, I don’t
think it would be giving too much
away to reveal, is located somewhere
in the woods. They strip down to their
smalls and swim in the lake. They get
drunk and play truth or dare. For a
while it’s only by virtue of knowing
Buffy the Vampire Slayer’s Joss
Whedon is attached that you give it
the benefit of the doubt. You soon
realise, though, that it’s all played
with a knowingly arched eyebrow: this
is a horror movie about horror movies,
and about the very concept of horror.
It pokes fun at familiar tropes in the
way Scream did 16 years ago, with its
spelling out of the rules: “never drink
or do drugs”, “never have sex”, “never,
ever, ever say ‘I’ll be right back’”. But
where Scream was content to point
out the rules, Cabin pulls back the cur-
tain entirely, exposing the wonderfully
grizzly machinery behind it.
In years to come students will play
bingo watching this. Cellar filled with
creepy dolls? Check. Hands clawing
their way from graves? Check.
Dismembered limbs crawling back for
one last scare? House! It is crammed so
full of references to classic fright
movies – some subtle, some rather less
so – that anyone even vaguely versed
in the genre will lap it up.
It’s also very funny. Even the (very
regular) stoner jokes bear the hall-
marks of Whedon’s off-kilter dialogue.
Some of the gags might be dumb but
you can laugh at them without feeling
guilty because, you know, it’s clever. I
think.
What starts out as a tightly wound
monster-in-the-window horror eventu-
ally spirals into an all-out celebration
of human entrails. Whedon creates an
early-era Peter Jackson gore-fest on a
late-era Peter Jackson budget. Quite
how he does it… Well, you’ll just have
to watch it to find out. I’ll lend you my
blindfold.
WHAT happens when a really attrac-
tive woman fancies a not-so-attractive
man? Does the world explode? No,
according to this typically kooky
French rom-com, where the widowed,
heartbroken Nathalie (Audrey Tautou
on classic “cute” form) finds love again
in a gawky but funny Swedish co-work-
er Marcus.
Delicacy is neither revelatory, nor
particularly fresh but it’s still a lot bet-
ter than that the majority of
Hollywood rom-coms – largely down to
Francois Damiens, who proves himself
a great comic actor.
It suffers from an unclear narra-
tive – is Nathalie settling for someone
she’s not really into? Is this supposed
to show us that you don’t need to
fancy someone in order to fall in
love with them? It’s more likely
the point is that love moves in
mysterious ways, etc, etc, but
this isn’t made clear. Also, the
idea of punching above/below
one’s weight isn’t as shocking as
the characters seem to think.
However, director David
Foenkinos mines as much
comedy gold as he can from
the situation – mostly to
good effect. Stevie
Martin
AS everyone knows; it’s really irritat-
ing when you go on a family camping
trip not knowing there’s $4m in your
trunk and that you’re being chased
by ruthless killers who want it back.
Jim Caviezel is Nate Sidwell, a man
hated by his family due to his past
imprisonment for tax evasion. The
trip is supposed to bring them
together but, instead, they end up in
the centre of a fairly average, rather
dull action movie.
There are a few almost laughably
predictable twists thrown in for good
measure, a lot of intensity from
Caviezel, and a suitably intimidating
performance from Frain as leader of
the bloodthirsty gang after the cash.
Caviezel (My Own Private Idaho)
and Frain (Sunshine) are both
far too charismatic and
interesting to be doing
these character-by-num-
bers roles.
Antonio Negret’s
direction gives them lit-
tle leeway, and lacks the
creativity needed to
inject life into pro-
ceedings, leading
to a saggy middle
and a predictable
finale after what
could have been,
at least, sort of
fun. StevieMartin
FILM
TRANSIT
Cert 15
hhiii
Audrey Tautou’s character in
Delicacy is in full “cute” mode
Hirst’s work
has lost none
of its impact
Prepare to be shocked by Joss Whedon’s
unusual horror flick, says Steve Dinneen
30
FRIDAY 13 APRIL 2012
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31
TV & GAMES
cityam.com
T
E
R
R
E
S
T
R
I
A
L
BBC1
SKY SPORTS 1
7pmSky Sports News 7.30pmLive
Football League 10pmTake It Like
a Fan 10.30pmPremier League
Preview11pmFootball League
12amPremiership Rugby Union
1.30amTake It Like a Fan 2am
Premier League Preview2.30am
Football League 3.30amTake It
Like a Fan 4amPremier League
Preview4.30am-6amLive
European Tour Golf
SKY SPORTS 2
7pmRoad to London 7.30pmLive
Premiership Rugby Union 10pm
School of Hard Knocks 11pm
WWE: Smackdown 1amWWE:
Bottom Line 2amSporting Greats
2.30amRoad to London 3am
School of Hard Knocks 4am
Premiership Rugby Union
5.30am-6amTake It Like a Fan
SKY SPORTS 3
6pmEuropean Tour Golf 8pmLive
PGA Tour Golf 11pmEuropean Tour
Golf 1amPGA Tour Golf 4amVolvo
Ocean Race 5amAmerica’s Cup
World Series 5.30am-6amKings
of the Snow
BRITISH EUROSPORT
6pmLive Weightlifting 8pmLive
Boxing 10pmBoxing
11pm-12.30amFencing
ESPN
6.45pmPremier League Preview
7.15pmESPN Kicks: Serie A
7.30pmLive Bundesliga 9.30pm
French Top 14 Rugby Union
11.15pmESPN Kicks: Serie A
11.30pmPress Pass 2012 12am
Live ATP Tennis 2amPremier
League Preview2.30amMMA Live
3amLive UFC 4amNBA Action
4.30am-7.30amLive Australian
Rules Football
SKY LIVING
6.30pmCSI: Crime Scene
Investigation 7.30pmCriminal
Minds 8.30pmCougar Town 9pm
Criminal Minds 10pmCSI: Crime
Scene Investigation 11pmBones
12amThe Love Machine 1am
Criminal Minds 2.40amMedium
3.30amBones 4.20amMaury
5.10am-6amJerry Springer
BBC THREE
7pmDoctor Who 7.45pmDoctor
Who Confidential 8pmDon’t Tell
the Bride 9pmLive at the Apollo
10pmEastEnders 10.30pmRussell
Howard’s Good News 11pmFamily
Guy 11.45pmAmerican Dad!
12.30amAngry Boys 1amWorld
Series of Dating 1.30amRussell
Howard’s Good News 2amLee
Nelson’s Well Good Show2.30am
Don’t Blame the Dog 3.30amSun,
Sex and Suspicious Parents
4.30amWorld Series of Dating
5am-5.30amLee Nelson’s Well
Good Show
E4
7pmHollyoaks 7.30pmHow I Met
Your Mother 8pmSupernanny US
9pmFILMDate Movie 2006.
10.40pmShameless 12amThe Big
Bang Theory 12.55amScrubs
1.50amHow I Met Your Mother
2.15amThe IT Crowd 2.40am
Rules of Engagement 3.05am
Greek 3.45amMade in Chelsea
4.40am-6amSwitched
HISTORY
7pmStorage Wars 7.30pmPawn
Stars 8pmStorage Wars 9pm
American Pickers 10pmAmerican
Restoration 11pmAmerican
Pickers 12amStorage Wars
12.30amPawn Stars 1amSwamp
People 2amThe Universe 3am
America: The Story of the US 4am
Heir Hunters 5am-6amAncient
Discoveries
DISCOVERY
7pmBear Grylls: Born Survivor
8pmAircrash Confidential 9pm
Whale Wars 10pmAmerican
Chopper: Senior Versus Junior
11pmWorld’s Toughest Prisons
12amBear Grylls: Born Survivor
1amWhale Wars 2amMonsters
Inside Me 3amDeadliest Catch
3.50amIce Pilots 4.40am
Wheeler Dealers 5.30am-6am
Destroyed in Seconds
DISCOVERY HOME &
HEALTH
7pmSupernanny 8pm19 Kids and
Counting 9pmSextuplets & The
City 10pmKate Plus 8 11pmI
Didn’t Know I Was Pregnant 12am
Sextuplets & The City 1amKate
Plus 8 2amI Didn’t Know I Was
Pregnant 3amSupernanny 4amA
Baby Story 5amBirth Days
5.30am-6amBaby Tales
SKY1
7pmThe Simpsons 7.30pmThe
Middle 8pmModern Family
8.30pmRaising Hope 9pmAn
Idiot Abroad 10pmGlee 11pmA
League of Their Own 12amDog the
Bounty Hunter 1amFILMPrimal
Doubt 2007. 2.45amDanny Dyer’s
Deadliest Men 3.40amFootball
Behind Bars 4.35amCustoms
5.05am-6amOops TV
BBC2 ITV1 CHANNEL4 CHANNEL5
S
A
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E
L
L
I
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E
&
C
A
B
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6pmBBC News 6.30pmBBC
London News 6.55pmParty
Election Broadcast 7pmThe One
Show: BBC News 8pmEastEnders
8.30pmWould I Lie to You? 9pm
Have I Got News for You 9.30pm
CHOICE Not Going Out 10pmBBC
News 10.25pmRegional News
10.35pmThe Graham Norton
Show11.20pmThe National
Lottery Friday Night Draws
11.30pmThe Matt Lucas Awards
12.05amEastEnders 2am
Weatherview2.05amSign Zone:
Natural World: Queen of the
Savannah 3.05amKen Russell: A
Bit of a Devil 3.55amBritain’s
First Photo Album4.25am-6am
BBC News
6pmEggheads
6.30pmCelebrity Antiques
Road Trip
7.30pmGreat British Menu
8pmMastermind:
8.30pmGardeners’ World
9pmBrick by Brick: Rebuilding
Our Past
10pmCHOICE Twenty Twelve
10.30pmNewsnight
11pmThe Review Show
11.45pmWeather
11.50pmFILMDown in the
Valley: Drama, starring Edward
Norton. 2005.
1.35amFILMYella 2007. 3amBBC
News 4.25am-6amClose
6pmLondon Tonight
6.25pmParty Election
Broadcast
6.30pmITV News and
Weather
7pmEmmerdale
7.30pmCoronation Street
8pmPoms in Paradise
8.30pmCoronation Street
9pmPiers Morgan’s Life
Stories: William Roache
10pmITV News at Ten 10.30pm
London News 10.35pmFILM
Charlie Wilson’s War. 2007.
12.25amThe Zone; ITV News
Headlines 2.30amFILMA Home
at the End of the World 2004.
4am-5.30amITV Nightscreen
6pmThe Simpsons
6.30pmHollyoaks
7pmChannel 4 News
7.30pmUnreported World
7.55pm4thought.tv
8pmCome Dine with Me
9pmThe Million Pound Drop
Live
10.35pmRude Tube: Extreme
Rides
11.35pmThe Mad Bad Ad Show
12.25amFILMThe Beach. 2000.
2.25amRandom Acts 2.30am
Mesh: Covert 2.35amStonehouse
Reunion 2.40amMy Name Is Earl
3amFranklin & Bash 3.45amSt
Elsewhere 4.30amPrivileged
5.10am-5.55amCountdown
6pmHome and Away
6.30pm5 News at 6.30
7pmRobson’s Extreme Fishing
Challenge: 5 News Update
8pmEddie Stobart: Trucks and
Trailers: 5 News at 9
9pmThe Mentalist
10pmCHOICE Castle
10.55pmLaw & Order:
Criminal Intent
11.55pmInside Hollywood
12amSuperCasino
3.55amMotorsport Mundial
4.20amMichaela’s Wild Challenge
4.45amMichaela’s Wild Challenge
5.10amNick’s Quest 5.35am-6am
Nick’s Quest
Fill the grid so that each
block adds up to the total
in the box above or to the
left of it.
You can only use the
digits 1-9 and you must not
use the same digit twice in
a block. The same digit may
occur more than once in a
row or column, but it must
be in a separate block.
COFFEE BREAK
KAKURO
QUICK CROSSWORD
LAST ISSUE’S
SOLUTIONS
KAKURO
WORDWHEEL
Using only the letters in the Wordwheel, you have
ten minutes to find as many words as possible,
none of which may be plurals, foreign words or
proper nouns. Each word must be of three letters
or more, all must contain the central letter and
letters can only be used once in every word. There
is at least one nine-letter word in the wheel.
SUDOKU
Place the numbers from 1 to 9 in each empty cell so that
each row, each column and each 3x3 block contains all the
numbers from 1 to 9 to solve this tricky Sudoku puzzle.
SUDOKU
QUICK CROSSWORD
WORDWHEEL
Copyright Puzzle Press Ltd, www.puzzlepress.co.uk
1 2 3 4 5
6 7
8
9 10 11
12 13 14
15 16 17 18
19 20
21
22
23 24
21 18
12 27
15 23 5
15 13
31
29 26
28
3 10
14 20 8
13 14
21 28
9
9
24
30
22
12
15
11
30
12
19
7
17
36
16
34
17
38
11
6
4
15
ACROSS
1 Apostolic (5)
4 Drizzle (4)
6 ___ Major, the
Great Bear
constellation (4)
8 Deflect, fend of (5)
9 Time starting when
travel in the region
beyond the earth’s
atmosphere became
possible (5,3)
12 Yours and mine (4)
13 Enlist (5)
15 Bout, period of
indulgence (5)
17 Boorish (4)
19 Giving delight and
satisfaction (8)
21 Longs for (5)
22 Genuine (4)
23 Deprivation (4)
24 End resistance (5)
DOWN
1 Items used to secure
washing to a line (4)
2 Colourful rice (5)
3 Enticements (5)
4 Very, very hungry (8)
5 Connected with
birth (5)
7 Aromatic grey-
green herb (4)
10 Grandeur (4)
11 Spreading plants
such as ivy or
periwinkle (8)
14 Kitchen appliance (4)
15 Floral leaf (5)
16 If not, then (4)
17 Large gathering
of people (5)
18 Nickname for the
southern United
States (5)
20 Precious metal,
symbol Au (4)
A
D
C
I
E R
H
S
G


4

4



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S H E E P B B O P
P G E N E R A A
O N I O N I L C
U N C G R A V E
S I N C E R E L
E E U A N
R S E R V I L E
C O M M A E K U
L O L S L A N T
U S T O R E Y E
E A T N T E N O R
6 9 8 7 9 2 8
4 1 3 2 5 8 1 2
8 2 8 2 7 4
9 3 4 6 1 5 3 2
7 4 3 8 9 6 8 9
1 7 4 1
9 5 9 6 8 5 7 3
7 2 4 6 1 3 8 2
1 2 5 3 6 1
8 6 9 7 2 8 9 6
1 3 6 2 1 3 4
4
4
4
4
4
4
4
4
4
The nine-letter word was
ANGUISHED
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S
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L
E
BBC1 BBC2 ITV1 CHANNEL4 CHANNEL5
FRIDAY 13 APRIL 2012
NOT GOING OUT
BBC1, 9.30PM
New series. Tim becomes part of a
band at work and Lucy falls for the
guitarist, prompting a jealous Lee to
try his hand at the rock ‘n’ roll lifestyle.
TWENTY TWELVE
BBC2, 10PM
The team explores ways of linking the
Games with the Queen’s Diamond
Jubilee, and a decision has to be made
on the future of the Olympic Stadium.
CASTLE
CHANNEL5, 10PM
The team investigates a murder
committed 10 years previously after a
courier carrying important documents
is killed. Nathan Fillion stars.
TVPICK
Bleu is the National colour
FRIDAY 13 APRIL 2012
32
THEPUNTER
RACING TRADER
BILL ESDAILE, OUR RACING EXPERT, PREVIEWS THE JOHN SMITH’S GRAND NATIONAL
nPointers…
ALBERTAS RUN 3.05pm Aintree (today)
FINGAL BAY 4.15pm Aintree (today)
OSCAR WHISKY 2.45pm Aintree (tomorrow)
S
YNCHRONISED, last month’s
Cheltenham Gold Cup winner,
heads the weights and the
betting for tomorrow’s John
Smith’s Grand National (4.15pm) and
will bid to become only the second
horse to win both races in the same
season. He will be the 17th to line up
at Aintree and only Golden Miller,
way back in 1934, managed to pull
off the double.
At the time of writing, he is a best-
priced 15/2 with Paddy Power, who
incidentally are offering five places
for each-way backers, and I can cer-
tainly see him starting shorter.
However, he isn’t the biggest of horses
to shoulder such a massive burden
and both his ungainly jumping style
and his inability to hold a position
certainly won’t help him around
here.
David Pipe’s Junior is bidding to
become the first horse to add a Grand
National win to a CV that also con-
tains victories at both Royal Ascot and
the Cheltenham Festival. He has a
tremendous attitude and it’s hard to
envisage him not playing a part in the
finish if he takes to the fences. He is as
short as 10/1 with Coral and that’s
just too short in my opinion for a
horse who has no secrets from the
handicapper.
There has been plenty of money all
week for mudlarks West End Rocker
and Giles Cross, but the ground
appears to be turning against them
and they can only drift in the betting.
The first of the four I’m going to rec-
ommend and, in my opinion the
most likely winner, is the Evan
Williams trained CAPPA BLEU. The
lightly-raced 10-year-old has that all
important mixture of class, speed and
stamina and is available at 16/1 with
Coral.
The former winner of Cheltenham’s
Foxhunter Chase back in 2009 has
only seen the racecourse seven times
since, but really caught the eye when
third in the Welsh National over
Christmas. The ground would have
been far too soft that day, but he
plugged on well with his big weight.
Ever since Gordon Elliot’s CHICAGO
GREY won last season’s National
Hunt Chase over four miles at the
Cheltenham Festival, I’ve had him
marked down as a potential Grand
National winner. I have absolutely no
doubt that his shrewd handler, who
tasted Aintree success back in 2007
with Silver Birch, will have given him
the perfect preparation for the race.
He sneaks into the race off a lenient
mark (set to carry under 11 stone) and
has the ideal jockey in the saddle in
the shape of Paul Carberry. There is
no better man for nursing a horse
around these fences, although even
he may have his work cut out if
Chicago Grey throws in one of his
occasional howlers. I’m prepared to
take that risk as these fences may
make him concentrate and will take
some of the 14/1 available with Paddy
Power.
KILLYGLEN was in the process of
running a cracker in last year’s race
when falling four fences from home.
He arrives at Aintree in better form
this time round and can race off a five
pound lower mark than 12 months
ago. He can be backed each-way at
20/1 with Coral and that looks fair
value.
My final selection has to be last
year’s winner BALLABRIGGS, narrow-
ly ahead of Becauseicouldntsee and
Black Apalachi. Admitedly, he has to
carry 10lb more than he did 12
months ago, but he bolted up that
day and arrives here a fresh horse on
the back of only one run at Kelso.
Previous Grand National winners
don’t often come back here and win,
but they often show up well and I
think he’ll finish in the money.
IT isn’t easy to pinpoint value on
this afternoon’s Aintree card, but I
don’t think the bookmakers have
got it right in the John Smith’s
Melling Chase (3.05pm). I’m a big
fan of Finian’s Rainbow, but he has
always struck me as a genuine two-
miler and he has been beaten both
times he has been stepped up to
2m4f plus. He’s 5/4 with Coral, but
it’s a long punishing straight at
Aintree and I’m happy to take him
on with the remarkable
ALBERTAS RUN.
Jonjo O’Neill’s 11-year-old has
never been given the credit he
deserves, but he has won three
times at the Cheltenham Festival
and was only just touched off by
Riverside Theatre in the Ryanair
this year. He also won this race in
2010 and finished second to
Master Minded last year. He is a
tremendously gutsy horse and is
worth a bet at 10/3 with Paddy
Power.
It was a real shame that
FINGAL BAY didn’t make it
to Cheltenham as it would
have been fascinating to see
him take on Simonsig in the
Neptune Novices’ Hurdle.
Compensation awaits, however,
in this afternoon’s John Smith’s
Sefton Novices’ Hurdle (4.15pm).
The step up to three miles
promises to suit and the rain that
came earlier in the week has made
the ground perfect for Philip
Hobbs’ runner.
Nicky Henderson had a
memorable Grand National
Saturday 12 months ago,
despite not even
having a runner in
the big one.
He landed
the first
three
races on
the card with
Spirit Son,
Finian’s
Rainbow and OSCAR
WHISKY and there is every chance
he can pull off the same treble
tomorrow.
Both Simonsig and Sprinter
Sacre are sure to go off very short
prices in the opening two contests,
but Oscar Whisky is certainly
backable at 9/4 with Coral in the
John Smith’s Aintree Hurdle
(2.45pm). There seems little doubt
that Dai Walters’ pride and joy is
best at 2m4f and it looked as
though he simply didn’t stay when
taking on Big Buck’s in the World
Hurdle last month.
He showed real guts when
winning this race last year,
sticking his neck out to hold off
the challenge of Thousand Stars.
That rival takes him on again, but
I’d expect my selection to confirm
the form. Rock On Ruby has to be a
danger on his Champion Hurdle
form, but he had a tough race that
day and I’d actually be more
scared of his stablemate
Zarkandar. If Sporting Index offer
a match bet on the two Nicholls
runners, I’d definitely favour last
year’s Triumph Hurdle winner.
Oscar Whisky primed to land another Aintree Hurdle
BILL ESDAILE’S 1-2-3-4
Cappa Bleu Chicago Grey
Killyglen Ballabriggs
1 2
3 4
SIMON CLARE’S 1-2-3-4
Ballabriggs The Midnight Club
Seabass Rare Bob
1 2
3 4
PADDY POWER’S 1-2-3-4
On His Own According to Pete
Becauseicouldntsee Seabass
1 2
3 4
Cappa Bleu (left) and Chicago Grey
(above) are fancied to run well in
tomorrow’s John Smith’s Grand National
7/1
Gold Cup winner
ridden by AP McCoy
and will go off
favourite
Grand National Office Sweepstake
40 horses, 4 1/2 miles, 30 fences. It’s the world’s most famous steeplechase
at Aintree tomorrow, and Bill Esdaile casts his expert eye over the field.
Synchronised
14/1
A dashing grey with
plenty of stamina
but has some
jumping issues
Chicago Grey
20/1
Last year’s Irish
National winner has
a squeak for Nina
Carberry
Organised-
confusion
40/1
Been placed the last
three years but Paul
Moloney deserts
him tomorrow
State Of Play
14/1
Last year’s winner
but much more
weight in the saddle
this time
Ballabriggs
80/1
Decent on his day
but would be a big
surprise if he was
good enough
Tatenen
14/1
Irish runner who
will be staying on
when others have
cried enough
Treacle
100/1
Didn’t seem to
enjoy the fences
when he ran here in
December
Swing Bill
50/1
Disappointed at
Cheltenham but had
excuses, needs to
bounce back
Weird Al
20/1
Katie Walsh could
become the first
female jockey to
win the National
Seabass
33/1
Finished sixth last
year but reportedly
didn’t enjoy the
experience
The Midnight Club
150/1
Won his last two but
will be a huge
surprise if he bags
the hat-trick
Postmaster
40/1
Grey old timer who
stays all day but has
been deserted by
Ruby Walsh
Neptune
Collonges
25/1
Wins the prize for
the best name but
needs to prove his
stamina
Shakalaka-
boomboom
40/1
2009 winner but is
getting on a bit now
and needs to find
some form
Mon Mome
11/1
Second in the Welsh
National and big
shout if more rain
arrives overnight
Giles Cross
28/1
In top form but did-
n’t get past the
fourth last year and
has a big weight
Calgary Bay
12/1
Won the Becher
Chase impressively
and must have a big
each-way chance
West End Rocker
66/1
Form figures read
more like a number
plate and looks
outclassed
Arbor Supreme
100/1
Doesn’t look capa-
ble of giving Kim
Bailey a second
National win
Midnight Haze
50/1
Irish-trained out-
sider who has failed
to complete on last
two starts
Alfa Beat
25/1
Malcolm Jefferson
will be doing a rain
dance for this
soft-ground lover
According To Pete
20/1
Cheltenham Festival
winner who has a
massive chance
if staying trip
Sunnyhillboy
66/1
Has gone well over
the course before
but struggling for
form this season
Vic Venturi
33/1
Classy but encoun-
ters this trip and
these fences for the
first time
Planet Of Sound
12/1
The mount of Ruby
Walsh and could
easily finish on his
own in front
On His Own
20/1
Was running a
stormer when
falling four out last
year and respected
Killyglen
100/1
Grand old stager but
looks the weakest of
Dessie Hughes’
four runners
In Compliance
40/1
Now a teenager but
was runner-up here
in 2010 and loves
the place
Black Apalachi
28/1
Not without a
chance but has
failed to finish on
his last two starts
Always Right
40/1
Fourth in last year’s
Irish National and
one of the more
likely outsiders
Quiscover
Fontaine
100/1
Only seven and that
age group have a
very poor record in
the National
Viking Blond
66/1
Impressed two
starts back at
Sandown but jump-
ing still a worry
Deep Purple
16/1
The big hope from
Wales and he has all
the key attributes
needed to win
Cappa Bleu
150/1
Nothing he has
achieved so far
would suggest he is
up to this
Tharawaat
66/1
The grandad of the
race and hasn’t
been good enough
in the past
Hello Bud
10/1
Royal Ascot and
Cheltenham Festival
winner who could
re-write history
Junior
40/1
A solid jumper from
Ireland who proba-
bly lacks the class
and stamina to win
Rare Bob
20/1
Got no further than
the second last year
but not ruled out at
decent price
Because-
icouldntsee
150/1
Sneaks in at the
bottom of the field
but has been in
terrible form
Neptune Equester
✄
they have only lost one of the previous
six meetings between the sides and they
look a far more united outfit under Di
Matteo’s guidance. They have lost only
once since he took over from Andre
Villas-Boas and have won eight of his 11
games.
Chelsea might be relying on an age-
ing squad, but they have all been here
and done it before, so will be more than
comfortable on the national stadium’s
FRIDAY 13 APRIL 2012
34
THEPUNTER FOOTBALL
cityam.com
TOTTENHAM..................................
CHELSEA........................................
Sunday 6.00pm, ITV1
hallowed turf. However, the teams
haven’t been split after 180 minutes of
Premier League action this season after
a 1-1 draw at White Hart Lane in
December and a goalless encounter at
Stamford Bridge last month.
They were also level after 90 minutes
in the 2008 Carling Cup final, before
Jonathan Woodgate’s extra-time winner
for Spurs, meaning there is plenty of
appeal about the draw at 11/5 with
Coral. I do, though, expect Chelsea to
take their place in the final for the
fourth time in six years and fancy a bit
of Blue Square’s 12/1 for them to win in
extra time as well as the evens available
for Chelsea to qualify.
Whatever happens, I don’t see there
being many goals. Since Wembley
reopened, six of the 10 FA Cup semis
played under the famous arch have seen
two or fewer scored in 90 minutes.
Furthermore, the last eight Spurs-
Chelsea matches have recorded a total
haul of 16 goals, so a sell of Sporting
Index’s prediction of 2.6 for this match
is advised.
T
HE intensifying battle for the top
four takes a back seat this
weekend as two of the principle
rivals for the final Champions
League spot go head-to-head at
Wembley.
Given Tottenham’s current league
form – one win, three draws and four
defeats in their last eight outings –
Harry Redknapp’s charges will be glad
of the distraction, and another chance
of reaching a first FA Cup final in more
than two decades.
Since Gary Mabbutt lifted the 1991
trophy, they have lost semi-finals to
Arsenal twice, Everton, Newcastle and
Portsmouth. Despite that, and their
troubling league run, Spurs are
favourites, albeit marginal ones, to pre-
vail in Sunday evening’s contest. They
are 8/5 with Coral to win in normal
time and, with the game to be decided
on the day, a general price of 5/6 to qual-
ify by any means.
As well as this match, and their own
tilt at fourth place, Roberto di Matteo
has another spinning plate to handle,
in the shape of a Champions League
semi-final clash with Barcelona, with
the first leg of that tie commencing less
than 72 hours after the final whistle at
Wembley.
While Redknapp may hope that
clouds Chelsea’s focus, there seems lit-
tle prospect of them not being suffi-
ciently motivated.
The Blues have let their dominance
slip a little in this fixture of late, but
HIS departure might not have
an effect on the playing staff,
but the timing of Damien
Comolli’s Liverpool exit is more
than a little odd, coming this
close to such a huge game for
the club.
The Reds lifted the Carling
Cup yet, rather than use that as
a launch pad, they have
undermined their achievement
by allowing their season to go
almost completely flat. There is
no prospect of Champions
League football next season, for
a third year in a row, so
everyone at the club will be
desperate to deliver the FA Cup
to Anfield.
Not that any of that will
concern David Moyes. Although
Everton have lost both league
matches to their neighbours
this season, the Scot will be
convinced that his players have
got it in them to deny his fellow
countryman, Kenny Dalglish, a
place in a second domestic
showpiece of the season.
The Toffees are certainly the
in-form club. They have
leapfrogged their neighbours in
the table on the back of taking
10 points from their last four
games and have lost just twice
in three months. Liverpool's
victory at Blackburn was their
first in the league since beating
Everton in mid-March and only
their second in nine top-flight
matches. An injury-time header
from Andy Carroll earned those
three points, so Coral’s offer to
refund losing bets on first/last
scorer, correct scores and
scorecasts if the last goal is
scored from a header could be
worth keeping in mind, but
Everton have a great
opportunity to win this game.
Moyes’s men look a good
investment at 15/8 with Coral to
win in normal time.
Unfortunately for spectators
at the games and on TV, this
match should set the tone for a
low scoring weekend at
Wembley as I don’t see either
side having the appetite for an
attacking approach.
Liverpool will be keen to
protect Brad Jones, who is set to
make just his second start since
joining from Middlesbrough in
August 2010 thanks to the
suspensions to Pepe Reina and
Alexander Doni, while
Everton’s success is built on
their solid foundations.
Selling goals with Sporting
Index, at 2.3, is again the call
from a spread betting
perspective and both the 1-0
and 2-0 scorelines to Everton
look perfectly feasible. They
have earned five of 13 league
wins by a goal to nil and are on
a mini-spree of 2-0 triumphs,
with six registered in 2012
already. Have 1-0 as the main
bet of the two at 8/1, with a
saver on 2/0 at 14/1, both at
Coral.
LIVERPOOL................................
EVERTON...................................
Tomorrow 12.30pm, ESPN
BEN CLEMINSON, OUR FOOTBALL EXPERT, WITH HIS BEST FA CUP SEMI-FINAL BETS
nPointers…
Draw at 11/5 with Coral
Chelsea to win in extra time at 12/1 with
Blue Square
Sell total goals at 2.6 with Sporting Index
The boys in
blue to have
their way at
Wembley
nPointers…
Everton at 15/8 with Coral
Everton to win 1-0 at 8/1 with Coral
Sell total goals at 2.3 with Sporting Index
Chelsea have lost only one of their previous six meetings with Tottenham
Brad Jones is set for just his second Reds start
ENGLAND head coach Stuart
Lancaster has suffered the first
major blow of his fledging tenure
after Saracens’ Andy Farrell
rejected the opportunity to join
his staff on a permanent basis.
Farrell, an integral part of the
interim coaching team that
steered England to second place
in the Six Nations last month,
insists he has unfinished business
with the Premiership champions.
“We have made decent progress
during this period but, in truth,
as a club, we have barely
scratched the surface of our
potential,” he said. “The job isn’t
anywhere near half done, and I
have decided I want to help
finish the job.”
Rugby Football
Union chief executive
Ian Ritchie remains
confident this setback
will not hamper rookie
Lancaster’s mission
to return
England to the
pinnacle of
world rugby.
“We will
continue to
work hard
with Stuart
Lancaster to
build a
world class coaching team as we
look towards the Rugby World
Cup in 2015,” said Ritchie.
Farrell’s decision to stay loyal to
Sarries leaves a gaping hole in the
England set-up ahead of the three-
Test tour to South Africa in June.
Favourite to fill the void is
former New Zealand attack
specialist Wayne Smith,
currently with Super 15 side
Waikato Chiefs, although
his unavailability for the
summer trip could
prove a stumbling
block.
G
E
T
T
Y
UNDER-FIRE Liverpool manager
Kenny Dalglish has been given a ring-
ing endorsement by the club’s
American owners and backed to stay
in charge beyond the summer, after
the axe fell on director of football
Damien Comolli yesterday.
Dalglish’s position has come
under increasing pressure following
the Reds’ worst run for 59 years and
amid criticism of his public pro-
nouncements, not least in relation to
the Luis Suarez racism accusations.
But on the eve of tomorrow’s FA
Cup semi-final it is transfer guru
Comolli who has paid the price
instead, with Liverpool chairman
Tom Werner insisting no further
changes were on the horizon.
“We’ve got great confidence in
Kenny. We feel the team is going to
make strides in the future and he
enjoys our full support. We don’t
envisage any other changes,” said
Werner. “We’ve got great confidence
in the other people in football opera-
tions, and so the answer is there will
be no future changes of significance.”
A vote of confidence is often seen
as a harbinger of an imminent sack-
ing, but Werner’s words of support
hint that Dalglish will remain in
charge not just for this season but
beyond. The American stressed that
he and owners Fenway Sports Group
“prefer stability” but felt compelled
IN BRIEF
Webber’s Bahrain doubts
n FORMULA ONE: Red Bull’s
Mark Webber has admitted
motorsport chiefs have a
“massive decision” to make
over whether to cancel this
month’s Bahrain Grand Prix,
amid ongoing civil unrest in the
Gulf state. “If we have a choice,
I want to race,” said Webber,
who added: “There is no
beating about the bush, it is
sensitive out there.”
Meanwhile, McLaren’s Lewis
Hamilton has been handed a
five-place grid penalty for this
weekend’s Chinese Grand Prix
due to a change of gearbox.
Spurs star taunts Chelsea
n FOOTBALL: Winger Gareth
Bale insists Tottenham are
superior to FA Cup semi-final
opponents Chelsea. Bale said:
“If we’re on our game we can
reach the final because I feel we
have the better team.” Chelsea
will be without defender
Branislav Ivanovic, after his
three-match ban was upheld.
Shearer: Name boss now
n FOOTBALL: Former England
striker Alan Shearer has urged
the Football Association to
appoint Fabio Capello’s
successor immediately and
remains convinced Tottenham
manager Harry Redknapp is the
right man. “I would absolutely
100 per cent still go for Harry
Redknapp,” he said. “Now the
time has come and so be it if
they upset one or two people.”
FRIDAY 13 APRIL 2012
35
Everyone who has come in since Damien has
been here was my choice. He did a fantastic job
of bringing them in
‘
SPORT
cityam.com/sport
BY FRANK DALLERES
THE ULTIMATE EXPERIENCE
DOZD\VDKHDGRIWKHJDPH
Experience corporate entertainment at its finest
with first class dining and enthralling football
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UNSTOPPABLE BIG BUCK’S IN 17TH HEAVEN
BIG BUCK’S made racing history yesterday by claiming a 17th successive race victory, in
the BGC Partners Liverpool Hurdle at Aintree. Ruby Walsh eased the Paul Nicholls-
trained nine-year-old, who was a 2-9 favourite, to a nine-length triumph on the first day
of the Grand National meeting to surpass Sir Ken’s 1950s run of wins.
to make some changes, and begin the
search for Frenchman Comolli’s
replacement, as thoughts turn to
summer recruitment.
“We’re coming close to the end of
the season and the transfer window
for the summer, and we felt it was
important to make this change expe-
ditiously,” he added.
Werner conceded FSG had been
“dissatisfied” with a season that will
not reap Champions League qualifica-
tion and relies on beating Everton
tomorrow to keep alive FA Cup hopes.
Comolli was hired in 2010 to over-
see Liverpool’s transfer policy but
Dalglish emphasised he himself had
the last word on all signings and
called the former Tottenham direc-
tor’s departure “disappointing”.
The Merseysiders’ business has
come under scrutiny following the
Daglish given Liverpool
backing as Comolli axed
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Lancaster honeymoon over as
Farrell snubs England position
BY TOM ROBINSON
expensive failures of Andy
Carroll, Stewart Downing,
Jordan Henderson and Charlie
Adam, who cost a combined
£80m last year, to deliver on
lofty expectations.
n Luis Suarez, £22.8m from Ajax
nAndy Carroll, £35m from Newcastle
nStewart Downing, £20m from Aston Villa
nJose Enrique, £5m from Newcastle
nJordan Henderson, £16m from Sunderland
nCharlie Adam, £9m from Blackpool
nSebastian Coates, £6m from Nacional
nCraig Bellamy, free from Man City
nAlexander Doni, free from Roma
nTOTAL £113.8m
COMOLLI’S SIGNINGS
Dalglish muddies Liverpool’s transfer policy
Farrell says his work at
Saracens is not yet done
Results