Wednesday newspaper round-up: Equitable Life, Taylor Nelson/WPP, Alliance & Leicester

09/07/2008 

A damning report into the near-collapse of Equitable Life will highlight failings by government regulators and pave the way for billions of pounds in compensation to be paid out of the public purse.

The parliamentary ombudsman, Ann Abraham, will announce in a report due to be published next week that watchdog bodies were guilty of maladministration ahead of the demise of the world's oldest insurance company, reports the Telegraph.

Fears that financial contagion could tear across the banking sector have prompted leading shareholders in Bradford & Bingley to line up behind its £400 million cash-call. Leading institutional fund managers said yesterday that any losses they might suffer on their investment in B&B's rights issue would be dwarfed by their exposure to a potential collapse across the sector if the bank were allowed to fail, reports the Times.

GfK, the German market research group, has joined forces with a financial bidder in a last-minute attempt to prevent WPP from winning control of Taylor Nelson Sofres (TNS), The Times has learnt. The German company, which is in talks with TNS about a nil-premium merger, plans to top any bid that WPP's chief executive, Sir Martin Sorrell, may announce today.

The Telegraph adds that the board of WPP, the world's largest advertising company, met last night to decide whether to go hostile with its £1.08bn offer for Taylor Nelson. WPP chief executive Sir Martin Sorrell is expected to declare its hand ahead of this morning's 7.30am "put up or shut" up deadline imposed by the Takeover Panel.

Alliance & Leicester, which has been searching for a new chairman since the death of Sir Derek Higgs in April, is close to appointing a successor. The bank, whose share price has been rocked by fears it might have to raise new capital, is in the final stages of concluding talks with Alan Gillespie, who has been chairman of Ulster Bank for seven years, writes the Telegraph.

Institutional investors in Marks & Spencer are pushing for fresh talks with the board over the way that the company is run as they prepare to mount the largest protest vote against the high street retailer for a decade. Shareholders told The Times last night that whatever the outcome of today's M&S annual meeting, the company had to address concerns about how Sir Stuart Rose will manage the business as executive chairman after the profit warning that wiped £1 billion from M&S shares last week.

Primark's flagship Oxford Street store has generated sales of nearly £200m since it opened in April last year.The value fashion giant's flagship store, which is about 70,000 square foot, is thought to be delivering average weekly sales of between £2.5m and £3m. The revelation comes ahead of a third-quarter trading update for Primark's owner Associated British Foods tomorrow, which is expected to show that Primark's sales growth has slowed but remains ahead of its high-street rivals Marks & Spencer and Next, reports the Independent.

Waitrose plans to launch its first grocery convenience store early next year to take on Marks & Spencer, Sainsbury's and Tesco. The John Lewis Partnership-owned grocer has hired the consultant Anthony Wysome, a former senior project manager at Waitrose, as head of convenience to spearhead its push into the fast-growing £27.4bn market for small shops, says the Independent.

Acromas Holdings, the company created from last September's £6.3 billion merger of the AA and Saga, said that it expected to pursue a stock market flotation "in due course" after reporting strong trading across all its businesses. Andrew Goodsell, chief executive, said yesterday that he believed an initial public offering would be well received, although the timing depended on what he called "the vagaries of market conditions," reports the Times.

Irish banks' stocks tumbled yesterday on rising investor worries that Europe's best performing economy over the past decade was lurching towards recession. Alarmed at the speed of the downturn in the economy, investors marked down shares in Bank of Ireland by 9%, while Allied Irish Banks and Anglo Irish Bank both dropped 10%. Irish Life & Permanent suffered a 14% slide, says the FT.

Large US investment banks will be able to access emergency cash from the Federal Reserve into next year as long as financial market turmoil persists, Ben Bernanke said yesterday in a sign of the growing concern among US policymakers that market strains will continue for some time, writes the FT.

Siemens, the German electronics company that employs 20,000 people in the UK, is to cut 16,750 jobs as part of a major restructuring of its global business. A spokesman for the company said it was "too early to tell" how many British workers would be affected but with 5,450 jobs to go in Europe, excluding Germany, it is likely the UK division will be hit, reports the Telegraph.

BB. - Bradford & Bingley

BB.

Latest Prices
Name	Price	%
Bradford & Bingley	38.75	+13.97
Associated British Foods	773.00	+2.11
Alliance & Leicester	235.25	+9.55
Marks & Spencer Group	235.25	+1.62
Taylor Nelson Sofres	278.50	+12.30
WPP Group	474.00	+2.16