London-Thursday newspaper round-up: Banks, BAA, MG Rover

Thu 30 Jul 2009

LONDON (SHARECAST) - Britain’s leading institutional investors are considering joining forces to bypass investment banks in a protest over the fees they charge for rights issues.

The head of UK equities for one of the City’s biggest long-term shareholders told The Times yesterday that institutions are considering options to take control of what has traditionally been the banks’ turf because they are so frustrated by high underwriting fees and deep-discount cash-raising.

BAA has warned potential bidders it will not sell Gatwick airport unless the asking price is met, despite its London assets incurring a £545.7m first-half pre-tax loss, says the Telegraph.

The bank debt held by companies fell for the first time since records began in 1997, in a sign of the credit squeeze facing smaller businesses. The data from the Bank of England support the chancellor's claims this week that in spite of the tens of billions of pounds spent on rescuing banks, companies are still struggling to gain access to finance, reports the FT.

Ruth Madoff was sued for $44.8m on Wednesday and accused of living a “life of splendour” by the trustee seeking to recover money for the victims of her husband, the disgraced former broker Bernard Madoff, writes the FT.

The Telegraph adds that Madoff has reportedly admitted that he cannot believe his $65bn (£39.7bn) "Ponzi" scheme was able to evade detection for as long as it did.

Lombok, the 19-store upmarket furniture retailer, has been bought out of pre-pack administration by a private equity-backed consortium after it became the latest furniture chain to collapse, according to the Independent.

The controversial report into the collapse of MG Rover might never be published, the Telegraph disclosed. The news comes amid speculation that the report could be politically damaging to Gordon Brown and other senior ministers, whose actions face scrutiny. The car maker collapsed with the loss of 6,000 jobs at the start of the 2005 general election campaign.

ESPN has secured its second major broadcasting agreement in the UK, with a deal to show its sports channels on Virgin Media. The Disney-owned broadcaster is also in late stage negotiations to wholesale the new ESPN channel, which goes live on Monday, to remaining pay TV providers BT Vision and Top Up TV, says the Independent.

AOL has promoted a former Google manager to resurrect the fortunes of its social network Bebo, more than a year after the last chief executive left. Stephane Panier was yesterday named head of Bebo's global operations, and has been handed the task of growing the business and adding more unique users in more countries, writes the Independent.

UBS looks certain to be forced into a bitter court battle over the identity of its wealthy American customers after US Government attorneys said that they were unlikely to reach a settlement with the Swiss bank, reports the Times.

Shares in Shanghai and Hong Kong tumbled on Wednesday as investors snapped up two newly listed mainland construction groups while selling down the rest of the market after reports that China’s central bank might rein in bank lending. Shares in China State Construction Engineering rose by as much as 90 per cent on their debut before closing 56 per cent stronger in Shanghai. China’s largest housebuilder had last week raised Rmb50.2bn ($7.34bn) in the world’s biggest initial public offering since Visa raised $19bn in March 2008, says the FT.

China has unleashed a new “format war” for control of the high-definition DVD market in an audacious attempt to unseat the Blu-ray disc as the sole global standard. The launch of the China Blue High-definition Disc (CBHD) for domestic use is viewed by analysts as a dramatic assertion of the country’s rising technological confidence and they believe that the format could mount a serious challenge to Blu-ray, according to the Times.