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BUSINESS WITH PERSONALITY BOURSES IN REVEALED: OUR SHORTLIST BATTLE OF TOP DEALMAKERS LSE FIGHTS TO KEEP TMX MERGER CITY A.M. AWARDS P20 ON COURSE P4 Issue 1,410 Friday 24 June 2011 www.cityam.com FREE OIL PLUNGES AFTER RESERVES RELEASE BRENT CRUDE OIL FUTURE INTRADAY CHART The release stoked political feuds, International Energy with Republicans and the oil indus- try accusing President Obama of vot- Agency’s emergency ing for the measure to boost America’s sluggish recovery. “This action threatens our ability supply tapped for just to respond to a genuine national security crisis and means we must third time in 37 years ultimately find the resources to replenish the reserve – at significant ▲ WORLD ECONOMY cost to taxpayers,” said Republican BY JULIAN HARRIS politician John Boehner. The move also puts pressure on oil FRENZIED trading saw oil drop by cartel Opec, which earlier this over six per cent yesterday, after the month failed to decide whether to International Energy Agency (IEA) release more oil into the market. said it would release 60m barrels of Some analysts said the release emergency reserves in the next could temporarily ease inflationary month, “in response to ongoing dis- 8:00 am 10:00 pm pressures in the West. Growing infla- ruption of oil supplies from Libya”. tion in Europe and the US has seen Brent crude sank to $107.14 Price: Price: central banks, particularly the (£75.63) per barrel, close to $7 down $114.21 Federal Reserve, come under fire. on the day, while US crude sank $107.26 A drop in the price of oil to $95 per close to $91 a barrel, down roughly barrel would wipe half a percentage five per cent from the day’s high. Oil prices plummeted yesterday after the IEA announced it would unlock 60m barrels of emergency reserves in the coming month point off inflation forecasts in the The news sent a chill through UK and Europe over the next 18 markets, helping to send the FTSE to hover dangerously near its 200-day behind the euro crashing to an all- reserves since it was founded in 1974 months, according to Alan Clarke of dropping 1.7 per cent to its lowest moving average. Positive news on the time low against the Swiss franc. in the wake of the Arab oil embargo. Scotia Capital. “For the Bank, this close since 16 March, when markets Greek budget, however, helped the Goldman Sachs said Brent crude The Gulf War (1990-1991) and could contribute to further delaying were plunging in the aftermath of US markets pare losses. could fall by $10-$12 a barrel by the Hurricane Katrina (2005) prompted the first interest rate hike, and may the Japanese earthquake. Weak employment data for the US end of July, after the surprise the two previous occasions when add to speculation of another round The Dow fell over one per cent also dented stocks across the pond, announcement from the IEA. supply was disrupted enough to con- of quantitative easing,” he said. immediately after the news, while while poor services and manufactur- It marked only the third time that vince the IEA to release millions of ALLISTER HEATH: P2 the S&P 500 Index shed 1.4 per cent ing data in the Eurozone was partly the IEA has unlocked emergency barrels per day in reserves. ECONOMICS: P17

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© Citigroup, Inc., 2011. Trading foreign exchange involves a high degree of risk. CitiFX Pro is only available to Professional Clients in the UK. CitiFX Pro is a service offered to you by Citibank International plc which is authorized and regulated by the Financial Services Authority. Registered Offi ce: Canada Square, Canary Wharf, London E14 5LB. VAT registration number GB 429 625 629 2 News CITYA.M. 24 JUNE 2011 Lessons to learn from Swiss watches NEWS | IN BRIEF Williams wades into energy deal US energy group Williams Companies last night tried to break up a rival’s do extremely well. Being the best at the boom in the emerging world is chosen to release 60m barrels of oil takeover deal with pipeline company something very special and unique incredibly exciting and is doing won- from its strategic inventories. At first Southern Union by making an unsolicit- almost guarantees success. This can be ders to cut poverty. World trade is set sight, the rationale looks clear: the IEA ed $4.9bn cash bid. Energy Transfer goods, agricultural products or servic- to rise from $37 trillion in 2010 to $150 is trying to compensate for the reduc- Equity had already offered Southern es such as foreign exchange trading or trillion in 2030 (in constant dollars) tion in Libyan supply, though this is a Union $4.1bn in a stock deal. Southern private secondary education. The sec- and $370 trillion by 2050. The explo- bit strange given that the soft patch in Union shares rose around 15 per cent in ond lesson is that it confirms the grow- sion in wealth this entails is mind-bog- the EU, UK and US economies means after market trading last night. Barclays ing importance of Asia; the Merrill gling. Intra-emerging markets trade is that demand for oil ought to fall. and Citi are advising Williams on its bid. EDITOR’S LETTER Lynch Cap Gemini world wealth report set to overtake trade within advanced What is really happening is that the this week revealed that there are now economies by 2015 and overtake trade IEA is trying to act like a modern cen- AIB in talks over capital raising ALLISTER HEATH more people with liquid assets of $1m between advanced economies and tral bank: it is attempting a hubristic Allied Irish Banks announced yesterday or more in Asia than there are in emerging markets trade by 2030, game of aggregate demand manage- that discussions are continuing with the IT is my favourite fact of the day: Europe. This is not a zero sum game: according to Citi. But the opportuni- ment, hoping to boost consumer and Government over the terms and struc- exports of Swiss watches jumped by an the City has a huge opportunity to sell ties are immense for individuals, com- corporate spending on non-energy ture of a capital raising in order to satis- astonishing 40 per cent in May. Exports its wares to Asia. At the moment, this panies and countries that are willing items by temporarily pushing down fy recent stress tests. Ireland, which to China were up 41 per cent in May, to opportunity is partly being squan- to fight for them, as I argued last night the price of oil. It is a dangerous game already owns 93 per cent of the bank, South Korea by 39 per cent and to dered by self-inflicted regulatory and in my speech to the Lord Mayor’s excel- and it won’t work – though Barack could end up taking more control of the Singapore by 35 per cent. Even tax attacks on our competitiveness. lent formal dinner for the property Obama will of course be hoping to ben- bank and buying more shares, resulting Western demand is recovering, albeit The third lesson is that while overall industry at Mansion House. We need efit politically. The price of oil won’t in potentially significant additional dilu- not by as much. Swiss watches are not consumer spending is growing only to be on the right side of history – that stay low for long, so the IEA will have tion for existing ordinary shareholders exactly a mainstream industry – but marginally in many Western means being sufficiently competitive, used up a chunk of its reserves for not other than the state. It is expected that they make for a fascinating indicator economies, there is plenty of demand educated and savvy to cash in on the very much gain. Rather than going for discussions with the Government will and highlight several important les- for premium products globally. The next few decades of booming trade. short-term bursts of stimulus, the IEA finalised within a week and AIB then sons we must all learn. better-off have bounced back from the would be better off holding its fire in expects to be in a position to announce The first is that countries that spe- recession because their wealth and OIL POLITICS GONE MAD case of a real crisis. the final terms and structure of any cap- cialise in high value added products – incomes are highly leveraged to the IT is good news for consumers that the [email protected] ital raising transaction with the State. even manufactured goods – can still economic cycle. What is clear is that International Energy Agency (IEA) has Follow me on Twitter: @allisterheath AIB expects to remain as a listed firm.

7th Floor, Centurion House, 24 Monument Street, London, EC3R 8AJ IMF endorses Tel: 020 7015 1200 Fax: 020 7283 5334 Email: [email protected] www.cityam.com Editorial Editor Allister Heath Deputy Editor David Hellier Greek budget News Editor David Crow Acting Night Editor Marion Dakers Business Features Editor Marc Sidwell Lifestyle Editor Zoe Strimpel ▲ EUROZONE Greek lawmakers must pass the Sports Editor Frank Dalleres BY KASMIRA JEFFORD new new round of austerity measures Greek PM George Papandreou still faces an uphill battle to avoid a default Art Director Craig Gaymer through parliament next week in Pictures Alice Hepple GREECE has agreed on the details of a exchange for second rescue package Commercial five-year austerity plan with EU and worth €120bn that has been agreed to Sales Director Jeremy Slattery IMF inspectors hoping to steer the in principle by Eurozone members. Default a factor in bank test Commercial Director Harry Owen country away from bankruptcy. “The basic issue of the day is to Head of Distribution Nick Owen The beleaguered country’s new finalise the programme,” Venizelos finance minister Evangelos Venizelos told a news conference. “Our basic met with a delegation of EU and IMF aim is to regain our credibility.” ▲ EUROZONE of 91 banks will allow an assessment Distribution helpline officials in Athens yesterday to dis- Prime Minister George Papandreou of current market conditions on sover- If you have any comments about the distribution BY MARION DAKERS cuss measures for extra tax rises and was meeting with European Union eign risk and banks’ cost of funding. of City A.M. Please ring 0207 015 1230, or email € [email protected] spending cuts to plug a 3.8bn fund- leaders in Brussels last night where EUROPE’S banking regulator said that Haircuts to be applied to trading ing gap. talks were dominated by talks on pre- it has updated its stress test protocol book assets have been adjusted in Editorial Statement In a press conference yesterday, venting spread of Greece’s debt crisis. for the region’s banks to factor in a some cases to reflect losses related to This newspaper adheres to the system of Venizelos announced details of some possible Greek default. current market values, the EBA said in self-regulation overseen by the Press Complaints of the measures including a new “sol- Greece’s new finance The European Banking Authority a statement. Commission. The PCC takes complaints about the idarity levy” on all Greek wage earn- minister Evangelos (EBA) has until now refused to include Results of the latest round of stress editorial content of publications under the Editor’s ers of between one and five per cent. the possibility of a sovereign default in tests are expected to be revealed on 13 Code of Practice, a copy of which can be found at Venizelos unveiled a www.pcc.org.uk The budget would also include lower- its tests. July, following the first tranche of tests new levy on workers Printed by Newsfax International, ing the minimum threshold for The EBA said yesterday it was closely last year, which fell short of predicting Beam Reach 5 Business Park, income tax to €8,000 a year from its to help cut debts monitoring the perilous financial situ- how Europe’s banks would fare under Marsh Way, Rainham, Essex, RM13 8RS current level of €12,000. ation in Greece and that its stress test pressure. WHAT THE OTHER PAPERS SAY THIS MORNING

threat would also apply to those that do not sign up to a proposed Treasury code of conduct aimed at cutting the CHINESE PREMIER DECLARES VICTORY cost of schemes built under the pri- FSA WARNS OF NEW BREED OF LIAR MOBEN AND DOLPHIN SHOPS COLLAPSE GOOGLE SERVED WITH SUBPOENAS IN OVER INFLATION vate finance initiative, Jesse Norman, LOANS The parent company of Moben BROAD ANTITRUST PROBE Chinese premier Wen Jiabao has the MP for Hereford said. The City Watchdog has warned that kitchens and Dolphin bathrooms has The US Federal Trade Commission is declared victory over domestic infla- buy-to-let mortgages designed for applied to go into administration, poised to serve Google Inc. with civil tion, saying that the government has TWITTER RISKS USER BACKLASH landlords are being misused by bro- becoming the latest victim of the subpoenas, according to people famil- successfully reined in price pressures. WITH PLAN FOR BOLDER ADVERTS kers to get around the rules requiring slowdown on the high street and the iar with the matter, signaling the “China has made capping price rises Twitter is looking at introducing borrowers prove their income. Before moribund housing market. start of a wide-ranging, formal inves- the priority of macro-economic regu- advertisements among the short mes- the credit crunch, self-certification Homeform, owned by Sun Capital tigation into whether the Internet- lation and introduced a host of target- sages that users see in the most active mortgages allowed borrowers to Partners, the US private equity firm, search giant has abused its ed policies. These have worked,” Mr part of the social networking service, obtain a home loan without proving filed an “intention to appoint admin- dominance on the Web. Google and Wen writes in today’s Financial according to people with direct their income, but these became istrators” with the courts yesterday. the FTC declined to comment. Times. “We are confident price rises knowledge of its plans. The move known as “liar loans” because they will be firmly under control this comes as Twitter looks at a wider were fraudulently used by some IRISH DATA REVEALS TWO-SPEED GEITHNER PRAISES IMF CANDIDATE year.” Consumer price inflation has range of options to generate revenues home owners to exaggerate earnings. ECONOMY CHRISTINE LAGARDE been rising since the middle of last from a service that has so far failed to Strong net exports and profits from US Treasury Secretary Timothy year, reaching a 34-month high of 5.5 make money from its audience as CHEQUE GUARANTEE CARDS TO END Irish-based multinationals saw GDP Geithner praised French Finance per cent in May. effectively as rivals such as Facebook. The cheque guarantee system will be jump 1.3% in the first quarter. The Minister Christine Lagarde yesterday, The move to place “promoted tweets” withdrawn next Thursday (June 30), data reverses a 1.4% drop in GDP saying through a spokeswoman that THREAT TO NAME AND SHAME PFI in the main “stream” of tweets on the despite protests from consumer recorded in the previous quarter, but she is “an exceptionally talented can- COMPANIES service is likely to be controversial groups and charities, particularly economists cautioned that the turn- didate” to head the International A Conservative MP is to identify pub- with users who have seen only limit- those representing older people, so around was more to do with external Monetary Fund. Mr. Geithner has yet lic finance initiative groups that ed and unobtrusive marketing mes- that it will make it impossible to pay demand than any recovery at home. to endorse a candidate, though the refuse to offer the taxpayer a volun- sages so far in Twitter’s five-year by cheque at many retailers, petrol Consumer demand dropped 1.9% in US has historically backed a European tary rebate on their profits. The same history. stations and restaurants. the quarter, the worst in two years. for the top IMF job. CITYA.M. 24 JUNE 2011 News 3 Private equity Coalition closes its could fall foul advertising agency of Bribery Act and slashes budget ▲ ENFORCEMENT PRIVATE equity firms in the UK could be held liable for bribes paid by offi- cials at companies they own, the ▲ POLITICS consolidate those reductions, while Serious Fraud Office has said, follow- BY KASMIRA JEFFORD ensuring that the remaining spend Global Ports chief Nikita Mishin is hoping to get the firm’s float away smoothly ing uncertainty in the sector as to and activity on advertising and mar- what it would mean for business. THE government has confirmed it will keting is better coordinated and exe- SFO director Richard Alderman close its Central Office of Information cuted.” warned private equity clients of the and that its advertising budget has It also said the coalition’s public sec- Global Ports prices IPO law firm Debevoise & Plimpton LLP in been cut by almost 70 per cent. tor spending cuts in June last year had London this week that they could be The closure of the agency, which led to a near-70 per cent cut in advertis- face prosecution for bribes even commissions government advertising ing and marketing spend from £532m ▲ CAPITAL MARKETS company at a deep discount to a though they know nothing about and publicity campaigns, will result in in 2009-10 to an estimated £168m in BY RICHARD PARTINGTON recent valuation by analysts, in an them although they will have the loss of up to 400 jobs. the past 12 months. indication of the measures firms are received the benefit through divi- The decision follows a review in Prospect, the union for profession- Russian port operator Global Ports prepared to take to successfully dends or other distribution. March by the former permanent secre- als, condemned the move to axe the has priced its up to $572m (£355m) float. “As owners of companies, private tary for government communications, COI saying it was “in complete breach London initial public offering (IPO) Trading of the firm’s global depos- equity, as well as the big institutional Matt Tee, who proposed replacing COI of the government’s declared policy of at the lower end of the range, in a itory receipts will begin on the shareholders, has a responsibility to with a new body. promoting shared services across cen- bid to get the float away amid tough London Stock Exchange today, ahead society to ensure that the companies Instead, the cabinet office will take tral and local government”. market conditions. of full trading before the end of the in which they have a shareholding over advertising and marketing activi- The organisation, which was found- The container terminal operator month. operate to the right standards,” ty, taking on 20 of COI’s staff to boost ed in 1946, best known for producing will price its shares in the lower half Deutsche Bank, Goldman Sachs, Alderman said. its existing communications teams. public information films, also of its $14.70 to $16.10 range, sources Morgan Stanley and Troika Dialog The Bribery Act, which will come The cabinet office, which published appoints advertising agencies and han- close to the deal told City A.M. last acted as joint global coordinators into play on 1 July, will make it a cor- its response to the COI review yester- dles media buying on behalf of govern- night. and joint bookrunners on the public porate offence for failing to prevent day said “the reforms are designed to ment departments. The list price puts shares in the offering. bribes paid in the UK and abroad. Harry Potter and the publishers of fury @

downloaded from its own store – How JK Rowling hopes to change the onto its Kindle device. The move has been likened to face of publishing by sidelining the Radiohead’s decision to self-publish their album In Rainbows through likes of Amazon, by Steve Dinneen their own website, @ forgoing traditional JK ROWLING yesterday delivered a 18,000-words worth of record labels. They warning shot to the publishing new material on the set up an innovative industry that it must adapt to the boy-wizard. “honesty box” sys- rapidly-changing online world or In short, it will offer tem after splitting risk becoming marginalised. fans an experience, from EMI, allowing The Harry Potter author revealed rather than just anoth- fans to choose how she will offer her record-breaking er place to buy a book. much they paid for children’s books for download The venture, which the record. through her own website, circum- has been two years in However, while @ venting the need to visit digital book- the making by UK digi- the scheme may shops like those owned by the likes tal agency Think, is a work for estab- of Amazon and Apple. major disappointment lished brands like The Scottish author, who for ebook retailers, who Rowling and launched the venture yesterday at will miss out on mil- Radiohead, it is the Victoria & Albert Museum in lions worth of down- unlikely to pro- London, had refused to allow her loads fees. vide enough income to be series to be released in a digital for- Rowling joins authors including sustainable for smaller independent mat, despite pressure from publish- horror writer Stephen King in creat- content owners. ers and retailers keen to milk the ing their own digital outlet for their “I’m phenomenally lucky that I Pottermania cash cow. Rowling has work. If the trend continues, estab- had the resources to be able to do it always maintained the digital lished authors could snatch back myself,” Rowling admitted yesterday. rights to the books, although power from publishers. “Ebooks are here, and they are UK publisher Bloomsbury Further down the line, here to stay. I still love a says it will receive a Amazon may print and paper book, slice of digital rev- be forced to but I think you can enues. allow non- enjoy both. There The website – propri- was really no other called etary way to do that for the Pottermore – formats – fans or for me than to will give the those not just do it myself.” series a mas- That the magic will sive online pres- work for Potter is all ence, with features but certain. Whether allowing fans to play it will alter the pub- games and interact with lishing industry is digital characters from the largely depend- books. It will also coincide with ent on the big a social networking push, players adapting MORE NEWS including a Twitter feed. to the digital As well as the existing books, world – and ONLINE Rowling will publish around fast. www.cityam.com 4 News CITYA.M. 24 JUNE 2011 LSE under fresh pressure to complete TMX merger

▲ FINANCIAL MARKETS per share from C$48 per unit and Influential proxy advisory firm increased the number of shares it Institutional Shareholders Services BY RICHARD PARTINGTON wants to 80 per cent from 70 per cent, yesterday came out in favour of the THE LONDON Stock Exchange’s giving its approach a total value of friendly merger, despite the improved friendly merger with Toronto bourse C$3.8bn (£2.44bn). Maple bid. operator TMX was put under renewed Just one day earlier, the LSE and Former TMX director and founder pressure yesterday, after the Maple TMX announced a special dividend in of Canadian research house group of Canadian banks and pen- an attempt to sweeten the deal for Forefactor, Renee Colyer, said: “The sion funds increased its hostile offer. shareholders. They are offering an agreed merger should happen to LSE chief Xavier Rolet is under pressure to sew up the TMX merger Pic: Micha Theiner Shareholders in TMX now face a 84.1p payment for LSE shareholders facilitate growth. It will put TMX in tough choice, to be settled in a vote and a C$4 special dividend for TMX the globalisation game, whereas the next week, over which deal to accept. shareholders, totaling £415m, should Maple offer pretty much keeps us TIME LINE | THE BATTLE FOR TMX Maple has increased its bid to C$50 the deal be completed. where we stand.” 9 February 2011: The London Stock 12 June 2011: Four more Canadian financial Exchange and TMX announce an agreed institutions join the Maple bid. £4.3bn all-share merger; it is billed as a friendly merger of equals. The LSE’s share of 12 June 2011: Maple tweaks its bid, slightly the deal is valued at C$3.2bn (£2bn). improving its offer. It writes to TMX share- holders calling on them to vote against the 14 May 2011: Maple Acquisition Group, a LSE merger on 30 June. consortium of nine Canadian banks and pen- sion funds, makes its first approach to the 22 June 2011: LSE and TMX offer share- board of TMX Group. Its deal is valued at holders a special dividend to sweeten their C$3.6bn. TMX says it will consider the offer, planned merger. although later turns it down. 23 June 2011: Maple immediately hits 26 May 2011: Maple goes hostile in its bid back with another improved offer of to take control of TMX. C$3.8bn. Save Time - order direct at www.dfs.co.uk or call Free on 0800 110 5000 24 hours a day 7 days a week

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Credit subject to acceptance. Credit is provided by external fi nance companies as determined by DFS. 4 years free credit from date of order. Delivery charges apply. DFS may alter or extend promotions at any time. Mobile charges may apply when calling 0800 110 5000. DFS is a division of DFS Trading Ltd. Registered in England and Wales No 01735950. Redhouse Interchange, Doncaster, DN6 7NA. 6 News CITYA.M. 24 JUNE 2011 City dismisses CITY VIEWS: SHOULD RBS AND LLOYDS SHARES BE “FAIR SHARES” PLAN GIVEN TO TAXPAYERS? Interviews by Cora Gardiner & Phoebe Torrance Q A WHAT’S THE PLAN? scheme’s creators, & share giveaway Q. Portman Capital, put KAMAAL HUSSAIN | LINEDATA LIMITED The idea is to privatise the gov- the cost at £250m. A. ernment’s 83 per cent stake in as a gimmick RBS and its 41 per cent stake in WHAT ABOUT WHEN 40M “The government needs to retain control, the Lloyds by divvying up the shares Q. PEOPLE SHOW UP TO THE AGM? crisis is still causing problems so we need to wait and giving them to taxpayers. The shares in question could ▲ POLITICS until it is over. I don't think we should sell because People would not have to pay for A. have voting rights but not BY JULIET SAMUEL them up front but would pay a attendance rights, and would be relinquishing control will cause an unbalance floor price to the Treasury whenev- held in accounts administered by a A PLAN to hand shares in nationalised we aren’t equipped to deal with.” er they sold on the shares. The nominee. Portman Capital’s lenders to taxpayers was scorned as floor price would be set at a break- Michael O’Connor also suggests “doomed to failure” and “a gimmick” even level to allow the state to that less sophisticated shareholders yesterday by observers in the City. recoup the £66bn cost of bailing could have their shares adminis- BGC Partners’ Louise Cooper said it ROBERT UNSWORTH | MONTPELIER SYNDICATE out the banks. But any upside tered electronically by “sounds like a nightmare to adminis- beyond that price would be kept by a nominee. ter” and that it was a throwback to the taxpayers and taxed at capital gains privatisations of the 1980s, asking: “The shares should be given to taxpayers because rates. WHAT IF “Should we really be repeating the the government’s money is the taxpayers’ money. I Q. WRECKERS experience of a decade that brought us WHY TAX THE GAINS? TRY TO DESTROY shoulder pads and legwarmers?” don't think we should sell the stakes to overseas Q. THE BANKS BY VOT- One analyst called the plan a “pop- investors because it should be UK people in Taxing the upside would allow ING FOR FOOLISH ulist gimmick” and said he was “work- A. the government to collect a MEASURES? ing on the basis that it won’t happen”. control of the UK banks.” portion of the windfall if there Given that they But Portman Capital’s Michael were big gains after it offloaded A. would destroy O’Connor, who helped devise the plan, the shares. It is a sweetener for the the value of said that criticisms are overblown. SPENCER HALLIDAY | INSURANCE INSIDER Treasury, essentially. their own “The technology that’s necessary to property, produce this is now available off the “Shares in RBS and Lloyds should be given back ISN’T THIS WILDLY hopeful- shelf,” he said. “It’s a procurement Q. IMPRACTICAL? ly that issue, not a development issue.” He to the taxpayers, but because of the financial Not necessarily. The technology wouldn’t added that if 22m applications for crisis the country really needs to gain A. to administer massively com- happen! Olympic tickets could be administered plex and large-scale trades already for a cost of £10m, then £250m should maximum profit, which would be exists – it is simply a matter of buy- easily cover the “fair shares” plan. generated by selling the shares.” ing it for the right price. The Banks plummet on ringfence anxiety

▲ BANKING price drop 3.7 per cent, Barclays lost Osborne has nonetheless vowed to BY JULIET SAMUEL 3.55 per cent and RBS plunged 4.9 implement it. per cent. In total, the three banks INVESTORS ditched British banks saw their value shrink by over £4bn. ANALYSIS l Royal Bank of Scotland yesterday after a note by influential It is also understood that the 38.5 p analysts unleashed fears that the ringfencing threat was a hot topic at 36.74 government’s reform plans for a dinner held by RBS for its top pri- 23 Jun lenders could slash their profitabili- vate shareholders on Wednesday, ty by 15-25 per cent. with investors anxious about how The note estimates that imple- execs will mitigate the impact. 37.5 menting the Vickers Commission’s The note on ringfencing, by proposal to hive off banks’ retail HSBC’s Robin Down, Peter Toeman from their wholesale business could and Ben Ashby, says that investors cost RBS, Lloyds and Barclays up to have so far not given the ringfenc- 36.5 £10bn and raise their wholesale ing proposal credibility because the funding costs by 100 basis points. government does not know how it In response, Lloyds saw its share will work. But chancellor George 8:00 10:00 12:00 14:00 16:00 Nationwide boss @ Beale’s pay rises to over £1.88m

▲ FINANCIAL SERVICES

NATIONWIDE chief executive Graham Beale was paid a total of @ £1.88m this year, an increase of £350,000 on last year’s wages. On top of a base salary of £650,000, Beale received £441,00 in perform- ance related pay, and a £101,000 pen- sion contribution. His basic pay packet next year will increase by a further £175,000 to @ £825,000, as the building society acknowledged that “base salary for out executive director roles has fallen MORE NEWS below a market competitive range ONLINE over time”. All of Nationwide’s six executive www.cityam.com directors received more than £850,000 in total pay each. CITYA.M. 24 JUNE 2011 News 7 UBI shares fall FSA report on ahead of €1bn RBS to blame rights issue ▲ FINANCIAL MARKETS SHARES in Italian lender Unione di Banche Italiane (UBI) slumped per- ilously close to the subscription price bad regulation € for its 1bn (£885m) rights issue, threatening to leave underwriters on the deal with millions of euros of ▲ REGULATION new bodies in a “twin peaks” system unpurchased stock. BY JULIET SAMUEL of regulation, came in for criticism by The regional bank’s share price Adam Phillips, who chairs the FSA’s closed down 5.1 per cent on the Borsa THE FSA’s report on the collapse of consumer panel. Italiana yesterday at €3.82 per unit, RBS will show that “the regulation He said that it is “essential” that marginally above the €3.81 subscrip- was woefully inadequate” in the run- the policy gets “a lot more work on tion price set for the deal. up to the financial crisis, FSA chair the detail to ensure it isn’t ineffi- The rights issue is due to close today, Lord Turner said yesterday. cient”. although investors who have not yet “If RBS had been subject to Basel III Many in the City are worried that committed to buying stock would be from 2007 onwards, it would have the government’s proposal to replace left without an incentive to purchase been a completely different situa- the FSA with two new bodies and to shares from underwriters Morgan tion,” he said. add another committee to the Bank Stanley, Italian lender Mediobanca He added that the FSA’s report of England will lead to duplication. In and Centrobanca, which is part of UBI. would be unvarnished because “we a white paper finalising the new However, many investors may don’t have a record of being easy on structure, the Treasury said that it already have placed orders earlier in ourselves”. would be “inappropriate” to give any the process, after the rights issue Turner also criticised the more detail in primary legislation. process began about a month ago. “immensely frustrating” process the Louise Hodges, a partner at law Meanwhile, the Italian financial body has been through in order to firm Kingsley Napley, said that the market came a step closer to its first publish the report, saying: “We’ve government had set out to abolish successful initial public offering (IPO) have to invent a process to deal with the FSA before considering what of the year, after it emerged that shoe- an unsatisfactory legal situation.” would replace it. “There is a concern maker Ferragamo’s share offer was However, he said that reforms to that there’s a political agenda here,” oversubscribed, with 3.6 times more the UK’s regulatory regime would put she said. demand than there were available in place a better system for similar “How are these new agencies going shares. The interest in the firm has led cases in future. to work together and make sure bankers on the deal to increase its pro- But the government’s other things don’t fall through the cracks posed listing price to €9 per share, reforms, which involve creating two or overlap and duplicate work?” FSA chair Adair Turner promised a self-critical report Picture: Micha Theiner/City A.M. with the books due to close last night. 8 News CITYA.M. 24 JUNE 2011 Aviva sells off RAC to Carlyle for £1bn cash

▲ INSURANCE age multiples of up to seven times BY HARRY BANKS Ebitda, harking back to deals done at Aviva, now led by Andrew Moss, bought RAC back in 2005 Picture: Micha Theiner/City A.M. the peak of the buyouts boom five AVIVA is to sell its RAC roadside res- years ago cue business to private equity firm To finance the buyout, JP Morgan, The Carlyle Group for £1bn, as the BNP Paribas, Credit Suisse, Morgan British group continues scaling back Stanley and UBS have underwritten a Laggard of sector deserves second look from non-core areas to focus on its £520m pound loan and a £100m facil- insurance operations. ity, it is understood. The auction process was fiercely Carlyle sees the possibility of grow- AND so the great tidying-up exercise core asset to a private equity player Spain. fought, with Carlyle battling rivals ing the RAC’s roadside rescue busi- continues. Fresh from selling part of – will become more commonplace Shares in the insurer – the lag- Clayton Dubilier & Rice and BC ness, Britain’s number two behind its stake in Dutch unit Delta Lloyd in the months ahead. Banks and gard of sector – closed virtually flat Partners to be the first private equi- the AA with more than 7m members, for £381m, Aviva has offloaded its insurers are divesting peripheral yesterday. ty firm to get its hands on the busi- and running it more efficiently, a roadside rescue business RAC for businesses to raise cash and adhere While Aviva is not going to be ness. source said. £1bn. to new capital requirements. high growth in the short term, due Aviva said yesterday it expected an Analysts said it had done well to Because they are all in a scramble to its reliance on more mature mar- accounting profit of £600m from the ANALYSIS l Aviva sell the unit on a price to earnings for capital, they are unwilling to kets, it is cheap on a price-to-earn- sale of Britain’s second-largest break- 455 p multiple of 17 times, considering its purchase off of each other. That ings basis, trades at a discount to down recovery group, and would use 425.80 own stock trades on seven times. It means private equity houses, backed both its net asset value and its enter- the proceeds to strengthen its bal- 445 23 Jun bought RAC on a similar multiple by revived debt markets, are the prise value and has a high dividend ance sheet and invest in its main mar- back in 2005, but has made around obvious buyers. yield which is well covered. kets. 435 £500m worth of disposals since For Aviva, the rationale behind We think the stock deserves a sec- The final price tag of £1bn valued then, suggesting it has got a good the deal is simple. It wants to focus ond look. RAC at around 17 times 2010 earn- 425 price from private equity buyer on its general insurance business ings. Carlyle. and the extra liquidity will strength- It was underpinned by strong 415 This kind of deal – where a big en its balance sheet, allowing it to BOTTOMLINE appetite from debt markets to pro- financial services firm sells a non- invest in priority markets such as Analysis by David Crow vide financing for a deal, with lever- 28 Mar 15 Apr 11 May 1 Jun 21 Jun Introducing our lowest spreads. EEver.ver.

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www.cmcmarkets.co.ukwww.cmcmarkets.co.uk 10 EDITED BY CITYA.M. 24 JUNE 2011 HARRIET DENNYS Got A Story? Email [email protected] The Capitalist Follow The Capitalist on Twitter: @citycapitalist TOP CHEFS LINE UP FOR SOLDIERS’ BANQUET

DO TOO many cooks spoil the broth? Not The Fairmont in the case of the sec- Hairpin bend at ond Square Mile the Monaco Salute City banquet in Grand Prix aid of wounded sol- diers, backed by media partner City A.M., when Above, left to right: Ray Steadman of Chamberlain’s, Philip of soldiers and in the families of those 12 of the world’s most Corrick, executive chef of the RAC, and Matthew Marshall and killed or injured on operations. This acclaimed chefs will Jeffrey Steadman of Chamberlain’s investment includes building and run- join forces to cook a ning personal recovery centres and pro- gourmet menu at Left: Scarlett and Alexander MacEwen with Judith Pleasance, viding training and educational Guildhall. chief of staff in the office of Alderman David Wootton programmes. Following the success One confirmed auction lot at next of last year’s fundraising Claridge’s and The Savoy, as well as Capitalist: “While we appreciate that the February’s fundraiser is a four-night stay banquet, where Boris Johnson and Jeremy Raymond Blanc OBE from Le Manoir aux government and the other armed forces at the Fairmont Monte Carlo, where Clarkson were among the 420 guests, the Quat’Saisons and Maryan Gandon from charities do a great deal, the Square Mile guests can watch the Monaco Square Mile Salute 2012 will be held on 22 the Fairmont Monte Carlo. Salute is a unique event in the City Grand Prix from a private February, organised by City restaurant The primary beneficiaries from the that goes beyond what is already viewing point on the and caterers Chamberlain’s Events and seven-course fundraiser will be Help for available – it is very encouraging to famous Fairmont Hairpin hosted by Brian Turner CBE, president of Heroes, The Royal British Legion, ABF The see how much goodwill there is in bend, with an invitation the Academy of Culinary Arts. Soldiers’ Charity and The Household the Square Mile towards our cause.” to HSH Prince Albert II of “We chefs just love to cook and what Cavalry Operational Casualties Fund, Also at the launch event was Monaco’s reception at better excuse than to do so for such a wor- which was represented at the launch by Lieutenant General Sir William the Prince’s Palace. thy cause,” said Turner at the Square Mile Alex MacEwen, vice president at BlackRock Rollo (right), deputy chief of the Tickets for the event Salute launch party at The RAC Club and chief executive of the charity. defence staff, who explained how are on sale at £3,500 before unveiling the culinary line-up, MacEwen, a former officer in The Blues the funds raised by the banquet for a table of ten. See which includes the creative forces behind & Royals who was almost fatally injured in will be reinvested in the recovery, www. squaremile the kitchens at The Ritz London, the invasion of Iraq in 2003, told The rehabilitation and reintegration salute. com to book. CITYA.M. 24 JUNE 2011 News 11 Ladbrokes bids for rival

▲ GAMING lead to an offer. founders, who can complicate nego- Chief executive Richard Glynn tiations, and management has previ- BY STEVE DINNEEN said: “The board has set out previous- ously indicated its openness to a BOOKMAKER Ladbrokes yesterday ly a clear organic strategy for takeover. confirmed it has made an approach Ladbrokes. We also stated that we Sweden’s Unibet pulled out of for Sportingbet, sending shares in its would explore appropriate opportu- talks to take over Sportingbet last smaller rival up 13 per cent. nities that may help us accelerate November, although sources close to Ladbrokes has been looking for a that process and bring benefits to Sportingbet said that the company way to expand its presence in the our shareholders. These talks should remained in talks with several other online gaming market for some be seen in that context.” parties. time, with talks with 888.com The 888 bid collapsed in April but Ladbrokes got off to a good start to falling through earlier this year. analysts believe a deal with the year, with its first-quarter rev- The betting giant stressed the Sportingbet would be easier to pull enues rising by 2.3 per cent. It also talks are “highly preliminary” and off. The online firm’s shareholder cut its net debt by £48.7m to said there was no certainty they will register is not dominated by £443.3m. Richard Glynn of Ladbrokes said talks with Sportingbet were preliminary Picture: REX ADVISERS: SPORTINGBET NEWS | IN BRIEF EMMA GRIFFIN Private equity buys ORIEL Securitas for £2bn A team of private equity firms, Bain and Hellman & SPORTINGBET is being Friedman, have agreed to advised by Lazard and buy Swedish alarms firm Oriel, with Emma Griffin Securitas Direct from heading up the Oriel Swedish rival EQT, the firms team. She has also said yesterday. The deal val- worked on Oriel’s adviso- ues the business at about ry team for DTZ, the real 20 billion Swedish Kronor estate firm currently (£1.94bn) according to peo- fielding takeover interest. ple close to the deal. The Jonathan Walker joins pair beat a rival bid from her on Oriel’s team. power tools maker Stanley Heading up the team Black & Decker and Carlyle for Lazard is Cyrus Group for the business Kapadia. Kapadia has owned by EQT. served as managing director and deputy head BHP Billiton admits of UK investment bank- ing at the financial con- rising costs sultancy. He has been at BHP Billiton said yesterday the firm for 14 years that its Worsley bauxite after joining in 1997. and aluminium project in Previously Kapadia was a Australia will cost $135m chartered accountant at (£84.4m) more than previ- PwC for three years. ously expected, and that Also on the team for first production has been Lazard is Charlie put back a year to the first Foreman, who joined the quarter of 2012. BHP said firm as a managing direc- the $3bn venture is “one of tor of UK Capital the most complex brown- Markets Advisory and field projects undertaken”, M&A. He joined Lazard which has slowed down from Deutsche Bank, construction progress. The where he was a manag- firm also announced an ing director in the UK extra $488m investment in coverage team. He joined its Jansen potash project in Deutsche Bank in 2002 Saskatchewan, Canada. in the corporate broking team and in 2005 was Apple gets go-ahead appointed head of UK corporate broking and for Nortel auction bid equity capital markets. US antitrust regulators He became a senior gave Apple approval to buy member of the UK cover- certain assets of bankrupt age team in 2006. telecom maker Nortel Networks yesterday. Apple joins Google and Ericsson in the fight to snap up 6,000 technology patents and NEWS | patent applications in an auction starting on IN BRIEF Monday. Google has already made a $900m Coucher defends payout offer. Ex-Network Rail boss Ian Coucher has defended the Schuh sells out to US £1m payout he received from the company on leaving, after retailer Genesco it was revealed in Network Shares in footwear chain Rail’s accounts that he Schuh hit a lifetime high took a year’s pay in lieu of yesterday after US retailer notice and a settlement relat- Genesco made a $162m ed to the company's long- bid for the company. term incentive plan. Coucher Schuh has 58 stores in the said the payment reflected UK and Ireland, plus 16 the fact he had wanted to concessions and an online work his full notice period shop. Schuh’s workers will after resigning last June; the be eligible for pay-outs company preferred that he worth a total of £37m as didn’t. part of the acquisition. 12 News CITYA.M. 24 JUNE 2011 HMV shareholders vote for Waterstone’s sell-off

▲ RETAIL will confirm the sale of the book The ailing retailer has issued several chain to Russian billionaire Alexander profit warnings so far this year and BY RICHARD PARTINGTON Mamut. has a debt pile of about £170m. SHAREHOLDERS in HMV, the embat- Mamut, who is best known in A sale of the book chain was first tled music retailer, have voted in Britain as the backer of blogging site mooted in December last year, when favour of the sale of Waterstone’s for Livejournal.com, plans to refocus the Mamut increased the size of his stake £53m. chain as a more traditional bookstore. in HMV above five per cent. The vote was 99.5 per cent in favour The sale will allow HMV chief His bid for the retailer was also of the disposal based on proxy votes Simon Fox to focus on the group’s linked with Tim Waterstone, the received in advance of an extraordi- core music business, which has taken founder of the chain, although the nary general meeting yesterday. a battering from online competitors British entrepreneur did not ultimate- The final count, expected today, over recent years. ly return to play a role. Russian oligarch Alexander Mamut’s bid to buy Waterstone’s was approved NEWS | IN BRIEF

Ocado hit by broker downgrade Stonegate in merger agreement Faster Shares in online shopping service Ocado Stonegate Pub Company has merged with Dual Core Processor tumbled by more than six per cent after Town&City Pub Company, its private equity JPMorgan Cazenove downgraded its rat- backers TDR said yesterday. The new ing for the shares and J Sainsbury hired group operates 560 pubs with revenues the group’s head of retail Jon Rudoe to near £500m and employs over 10,000 run its online operation. JPMorgan down- people. The merger with Yates’s and Slug & graded its rating on the online retailer to Lettuce operator Town&City creates the “neutral” from “outperform”. But the largest privately held managed pub opera- broker added: “We remain bullish on the tor in the UK after Stonegate bought 333 longer term Ocado investment case.” Mitchells & Butlers pubs last year.

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Where the possible begins. samsung.com/uk/galaxys2 CITYA.M. 24 JUNE 2011 News 13 Survey reveals Dixons hit by stagnation on £224m loss as the high street ▲ RETAIL

RETAIL sales stagnated in June, knocking hopes for growth on the FD jumps ship British high street. Annualised sales failed to grow for the first time in a year, the Confederation of British Industry ▲ RETAIL Chief executive John Browett said: (CBI) revealed yesterday. BY JOHN DUNNE “It’s not death and destruction ... but While a third of retailers reported the economy is taking longer than Sir Terence Conran founded Habitat Picture: REX higher sales than the same time last DIXONS reported a £224m loss yester- expected to pick up.” year, 34 per cent said that sales were day due to tough trading, as its However, he added that the reduc- down on a year earlier. After round- finance chief jumped ship. tion of the budget deficit was helping ing, the survey measured minus two The electricals retailer said its turn- to pave the way for an upturn. per cent – significantly down from a around plan, which includes £50m On suggestions that Dixons was an Home Retail Group looks positive balance of 18 per cent in May. savings a year, was on track but that acquisition target for US giant Best The underlying trend in sales, the economic downturn was lasting Buy he said: “I can understand why which irons out some monthly longer than expected. they might be interested,” but added volatility, eased down to a balance of It also revealed that finance direc- that he doubted an offer would mate- to bid for Habitat stores 12 per cent, from 18 per cent last tor Nicholas Cadbury would be leav- rialise. month – still “clearly in positive terri- ing the firm after 18 years to join Dixons shares dropped 3.2 per cent tory”, the CBI said, yet the lowest rate electrical components maker Premier to 16.01p yesterday. of growth since July 2010. Farnell. ▲ RETAIL unnamed company is also eyeing “After a year of growth, high street ANALYSIS l Dixons retail Dixons reported one-off costs of 16.47 BY JOHN DUNNE Habitat. sales volumes fizzled out in June,” £300.9m, including a £251.6m invest- 21 p 23 Jun Home Retail Group has seen its said Judith McKenna of Asda and the ment write-off relating to impair- HOME Retail Group, the owner of the Argos stores struggle in the down- CBI. “Consumers are really feeling ments at its European businesses. 19 Argos and Homebase retail chains, is turn as household budgets are the pinch as disposable incomes con- A £53m writedown in Greece was in talks to buy Habitat. squeezed. However, Homebase has tinue to be squeezed by rising prices 17 among the payments, while it was The luxury furnishings company is been faring better. and weak earnings growth.” also hit by costs associated with wind- 15 now owned by restructuring special- Sir Terence Conran founded the Retailers expect another month of ing up its Spanish business. ist Hilco. It has 71 stores worldwide, company in London in 1964 to mar- generally flat sales in July. One third The loss in the year to 30 April com- 13 including 35 in the UK, 26 in France, ket his “Summa” range of furniture. expect sales to increase on a year ear- pares with a profit of £112.7m last five in Spain and five in Germany, The first Habitat store was opened in lier, yet nearly as many (31 per cent) year. Underlying pre-tax profits came 11 employing 2,100 staff. Chelsea by Conran, his then wife are downbeat, forecasting a lower vol- in at £85.3m, in line with forecasts. 28 Mar 18 Apr 9 May 31 May 21 Jun It is understood that another Caroline and the model Pagan Taylor. ume of sales than in July 2010.

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Explore more of Ontario. Visit www.ontariotravel.net/visitnow 14 News CITYA.M. 24 JUNE 2011 U-turn for Rank Micro Focus over Guoco’s falls after a hostile approach ▲ GAMING BY STEVE DINNEEN Micro Focus chairman Kevin Loosemore RANK Group yesterday performed a weak outlook screeching U-turn by endorsing Guoco’s hostile bid for the company. ANALYST VIEWS: WHAT DO YOU THINK OF The owner of the Mecca Bingo and MICRO FOCUS’ RESULTS? By Steve Dinneen Grosvenor Casino chains released a statement to the market saying it ▲ TECHNOLOGY International. grudgingly recommended sharehold- BY STEVE DINNEEN However, analysts said yesterday’s JONATHAN JACKSON | KILLIK & CO ers accept the bid despite the board results will do nothing to help the maintaining it massively undervalues TROUBLED Micro Focus dived more firm achieve a robust valuation. the company. than seven per cent yesterday after Chairman Kevin Loosemore said: The figures were in line with previous guidance. Cash conversion was The decision is based on the increas- disappointing investors with a “We just need to fix the execution strong, at 113 per cent, and net debt fell to $14.9m. The final dividend was main- ing possibility of Guoco taking control weaker than expected profits forecast issues in the business. If I had the tained to give a full-year increase of 7.3 per cent. Discussions are ongoing regard- of 75 per cent of Rank, at which point for the coming year. choice between a business with great “ing potential offers, but there is no certainty any offer will be forthcoming. it is entitled to delist the company. Revenue inched up nearly one per product and poor execution or great A source close to Rank said this cent to $436.1m (£273m) but adjusted execution and poor product, I know would be “catastrophic” to sharehold- operating profit fell almost nine per which I would choose.” RAJEEV BAHL | MATRIX ” ers and was the basis for reversed rec- cent, in line with forecasts. Loosemore added the firm will ommendation. The source told City The slow forecast comes as another address self-inflicted sales and mar- A.M. any remaining shareholders blow for the firm, which was forced keting troubles at its testing business. No real surprises in Micro Focus’ full year results, with the operating result would be left with “effectively worth- to issue a profit warning in February in line, earnings per share slightly ahead and cash conversion of 102 per cent. less” shares which they would be and lost its chief executive two ANALYSIS l Micro Focus 328.13 unable to trade, should Guoco decide 23 Jun Guidance of a revenue decline in the coming year looks a little conservative to us. Our months later. 400 p “estimates and consensus already factor in a small organic revenue decline. to delist the company. The company said it expects the Guoco, controlled by billionaire current financial year to remain chal- 360 Quek Leng Chan, has signalled it will lenging, with a near-term decline in JULIAN YATES | INVESTEC ” maintain the listing but would not sales. rule out any possibilities. Last month, Micro Focus, which 320 The Rank board said yesterday’s tar- supports mainframe computer appli- There has been no confirmation of a bid and we feel that these results ing update, in which it recorded a cations for Tesco and Boeing, said it seven per cent gain in sales in the 10 280 will not help secure a robust bid price. We maintain our more cautious “hold” but was exploring a number of approach- we feel in the absence of a bid the stock could head back towards the 250p level, weeks ended 19 June reinforced its es, including from US-based private “unless there is increased certainty on the strategic outlook. claims that the 150p a share offer does- equity firms Bain Capital and Advent 28 Mar 18 Apr 9 May 31 May 21 Jun ” n’t reflect the true value of the group. Priceless entertainment...

Jeremy Irons The Borgias Britain & Ireland’s Next Top Model Falling Skies New Drama New Series New Drama Starts Saturday 6th August, 9pm Starts Monday 4th July, 9pm Starts Tuesday 5th July, 9pm

The Borgias © LB Television Productions Limited/Borgias Productions Inc. Borg Films kft an Ireland/Canada/Hungary Co-Production. All Rights Reserved. CITYA.M. 24 JUNE 2011 News 15 Twins concede in Facebook

The Olympic row- ing twins Tyler and Cameron legal action Winklevoss have ended their legal dispute with Facebook. ▲ TECHNOLOGY The firm is still facing a legal bid Picture: REX for 84 per cent of the company from BY STEVE DINNEEN businessman Paul Ceglia. The New FACEBOOK yesterday tied up another York-based wood pellet salesman, a loose end ahead of its expected convicted fraudster, claims $100bn initial public offering, with Zuckerberg promised him a stake in TIME LINE | THE UPS AND DOWNS OF THE SOCIAL NETWORK the Winklevoss twins ending their the company for IT work carried out long-running legal dispute. before the launch of Facebook. ● 2002 The social networking website ● 2008 Tyler and Cameron Winklevoss against a The Olympic rowers – known as Ceglia has passed a polygraph lie- ConnectU is founded by Harvard students agree to a cash and stock settlement after Supreme Court the “Winklevii” – have decided not to detector case and claims to have doc- Cameron Winklevoss, Tyler Winklevoss lengthy legal proceedings. They later say ruling upholding appeal to the Supreme Court a ruling umentary proof of the agreement, and Divya Narendra, with Zuckerberg they were misled over the value of the the original settle- upholding their $65m (£40m) settle- which has been dismissed as fraudu- later asked to help in its development. company and went to the courts to up ment over their ment. The cash-and-stock agreement lent by Facebook’s legal team. ● 2003 Mark Zuckerberg creates their claim against Facebook. ConnectU ven- was intended to end a claim by the Eduardo Saverin, Zuckerberg’s 'Facemash' at Harvard University. This ● 2010 The Social Network, a film ture. twins that Facebook founder Mark Harvard roommate who co-founded was an early version of Facebook. about the beginnings of Facebook direct- Zuckerberg had stolen their idea for a the social network has also been ● 2004 Mark Zuckerberg began to ed by David Fincher is released. Harvard social network. involved in a now-settled legal write Facebook with his Harvard room- ● 2010 Paul Ceglia, who claims to have They agreed to settle for the sum dispute with the firm over allegations but then appealed it, claiming his stake was unfairly diluted. mate Eduardo Saverin who claimed he met Zuckerberg in 2003 when he posted Facebook had misrepresented its Facebook last month shed users was “diluted” out of the company after a Craigslist advertisement seeking help soaring value. across a number of its mature mar- Zuckerberg quit Harvard and moved to with his website StreetFax filed a law- Zuckerberg created Facebook in kets, sparking fears its meteoric Palo Alto. Saverin later filed a lawsuit suit against Facebook founder Mark 2004 in his Harvard University dormi- growth is beginning to peak. against Facebook and Zuckerberg, which Zuckerberg, claiming 84 per cent own- tory room, as dramatised in the 2010 It lost 6m users in the US to fall was settled out of court. Saverin signed a ership of Facebook. He is seeking mone- film The Social Network. below 150m and lost a further non-disclosure contract. tary damages. The end of the dispute marks the 100,000 in the UK. However, it is still ● 2004 ConnectU filed a lawsuit against ● 2011 The “Winklevii” twins admit closure of one of the legal claims expected to smash through the 700m Zuckerberg and other Facebook founders. defeat after deciding not to appeal lodged against Facebook. users barrier this year.

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© Citigroup, Inc., 2011. All rights reserved. Citi, Citi and Arc Design and CitiFX Pro are trademarks and service marks of Citigroup Inc. and used and/or registered throughout the world. CitiFX Pro offers trading on margin. The leverage created by trading on margin can work against you as well as for you, and losses can exceed your entire investment. Before opening an account and trading, you should ensure that you understand the risks and can withstand the losses and that you seek advice from your advisors as appropriate, please see www. citifxpro.com for further details. This information is directed only at persons in the UK who qualify as Professional Clients (as defi ned in the rules of the Financial Services Authority) and CitiFX Pro is only available to Professional Clients in the UK. Classifi cation as a Professional Client may require an assessment of the person’s experience and knowledge (in roll- ing spot or similar instruments or markets). CitiFX Pro is a service offered to you by Citibank International plc which is authorized and regulated by the Financial Services Authority. Registered Offi ce: Canada Square, Canary Wharf, London E14 5LB. VAT registration number GB 429 625 629. The main business of Citibank International plc is banking and securities business. It is entered on the FSA register under number 122342. *See www.citifxpro.com for details of our premium account pricing. CITYA.M. 24 JUNE 2011 News 17 PRICE PRESSURES PERSIST IN SINGAPORE Consumers’ borrowing drops and fewer seek remortgaging

▲ UK ECONOMY for this year. same period of 2010, the BBA said. BY JULIAN HARRIS “Demand for unsecured borrowing Low interest rates have also prompt- remains weak with repayments con- ed a decline in the level of re-mortgag- CONSUMERS are borrowing less and tinuing to outweigh new lending,” ing, with any normalisation in Bank repaying more on debts, data from the commented BBA statistician David rate looking increasingly unlikely for British Banking Association (BBA) Dooks. the rest of the year. revealed yesterday. “Money is still tight and people con- The number of approvals for re- Unsecured credit contracted by 1.2 tinue to pay off debt rather than save mortgage rose by just 532 between per cent in the year to May, while net or borrow.” April and May. The level of re-mort- credit card borrowing measured a In the first five months of the year, gages in May was 12.4 per cent below modest £73m in the month – the personal deposits rose by just £4.8bn, the six month average, according to weakest rate of borrowing on plastic compared with a rise of £13.9bn in the the data.

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INFLATION in Singapore is proving more stubborn than expected, holding up at 4.5 per cent in May, official data showed yesterday. Higher food, housing and transport costs drove up the island state’s consumer price index. The consumer price index looks set to AWARD WINNING overshoot forecasts of 3-4 per cent targeted by Singapore’s authorities for 2011. Pic: REX PRODUCTS NOW EVEN Euro growth BETTER VALUE in slowdown SAVE £70 ▲ WORLD ECONOMY Factory activity in the single cur- rency area fell to an 18-month low of BY HARRY BANKS 52 – another sharp drop, from 54.6. PRIVATE sector activity slowed in The data come a day after the US Europe and China this month just as Federal Reserve said the pace of recov- Cybershot HX5v the outlook for the US has darkened, ery in the world’s largest economy 10 megapixels, 10x zoom according to data yesterday, which was proceeding more slowly than it JESSOPS PRICE suggests a global slowdown is becom- had expected, but pledged no new ing more entrenched. help for the economy once its bond NOW £179.95 The Eurozone’s private sector grew purchase programme expires this Was £249.95 only modestly -- and without the sup- month. port of Germany and France, it would “Economic activity is losing have shrunk -- while China’s factory momentum quite rapidly,” said sector barely expanded even as infla- Marco Valli at UniCredit. “The pace of tion eased, purchasing managers’ growth deceleration in May-June indexes (PMIs) showed. matches similar evidence in other CASHBACK Commercial sector activity fell to industrialised countries.” £50 53.6 in an initial “flash” PMI for China’s flash HSBC PMI, the earli- June – a sharp drop from 55.8 the pre- est available indicator of the coun- vious month. try’s industrial activity, eased to 50.1 All PMI scores above 50 indicate in June. Data compiler Markit said NEX-5 18-55mm Lens Kit economic growth, yet the pan- this was consistent with second quar- 14 megapixels, 3.0” LCD screen Eurozone rating is slipping towards ter economic growth of around 9.1- stagnation, printing its lowest rate 9.3 per cent year-on-year, down from You pay £479.95 and claim £50 since October 2009. 9.7 in the first quarter. cashback from Sony, fi nal cost to you: ONLY £429.95 Rising number of Americans file claims for unemployment benefit In-store Online Call

▲ over 200 stores US ECONOMY Economists had expected claims to jessops.com 0800 083 3113 nationwide delivered to your door or delivered to your door or come in at 415,000. The four-week collect free at your store collect free at your store THE number of Americans filing new moving average of new jobless claims, claims for unemployment benefits considered a better gauge of labor rose higher than expected last week, market trends, was unchanged at Find us on facebook.com/jessops suggesting little improvement in the 426,250. labour market this month after A total of 7.54m Americans were FROM employment stumbled in May. claiming unemployment benefits Errors & omissions excepted. Goods subject to availability. Offers, prices, specifi cations and services are subject to change without prior notice and relate to Initial claims for state unemploy- under all programmes in the week mainland UK stores only. All prices include VAT. Savings based on previous sell prices. Ask in store for details. Offer ends 30th June 2011. ment benefits climbed 9,000 to a sea- ending 4 June. sonally adjusted 429,000, the Labor Meanwhile, new home sales in the Department said yesterday. US fell 2.1 per cent in May. 18 News CITYA.M. 24 JUNE 2011 Nissan predicts Go-Ahead ups a better than forecasts on expected profit ▲ AUTOMOTIVE NISSAN Motor forecast a better-than- expected 14.4 per cent fall in annual high demand operating profit yesterday, defying a quake-induced setback in the past few months and projecting another year of record sales. ▲ TRANSPORT solid growth.” Japan’s number two automaker BY JOHN DUNNE Go-Ahead expects full-year passen- forecast an operating profit of 460bn ger revenues at its bus division, which yen (£3.57bn) for the year to March BUS and train operator Go-Ahead said includes Metrobus in Sussex, Saab, led by Victor Muller, has been loss-making for the 20 years Picture: GETTY 2012, above an average forecast of yesterday that its profit had been Plymouth Citybus and Oxford Bus 432bn yen. given a further boost as more Company, to increase after growth of Despite the lingering disruption to motorists take public transport around two per cent in passenger production from the 11 March earth- because of fuel price rises. numbers. Swedish carmaker Saab quake, Nissan said it would boost Go-Ahead, which has a fleet of Revenues at its Southern and sales by 9.9 per cent to 4.6m vehicles 3,800 buses and is part of a joint ven- Southeastern franchises have both this year, offering a rosier outlook ture responsible for Southern, seen a nine per cent lift, with London than rivals Toyota and Honda, which Southeastern and London Midland Midland seeing an improvement of says it can’t afford wages have both forecast a sales decline. rail services, said its buses represent- around eight per cent. The company “We’re pretty confident that the ed “better value” than travelling by said that operating profit would be supply will be there,” Nissan chief car. more than £108m. executive Carlos Ghosn said. ▲ House broker Investec lifted its full- ANALYSIS l Go-Ahead Group AUTOMOTIVE their wages by then. He added that with fewer than 10 year pre-tax profit forecast to £96m BY HARRY BANKS Production at Saab, owned by suppliers affected by the disasters 1550 1,516.00 from £90m previously. p 23 Jun Netherlands-based Swedish now, he hoped production would Go-Ahead said its marketing and 1500 LOSS-MAKING Swedish carmaker Automobile, has been halted for most fully return to normal before an improved operating standards were Saab said yesterday it couldn’t pay its of April and May and is currently October target. helping to drive growth as it forecast 1450 employees wages as it had not down for at least the next week Nissan expects net profit of 270bn profits for the year to July will be obtained the short-term funding it because it doesn’t have the money to yen, down 15.4 per cent from last ahead of previous expectations – the 1400 needs. pay suppliers for parts. year, assuming an average dollar rate second upgrade in four months. Unions for workers at Saab, which Shares in Swedish Automobile, of 80 yen and euro of 115 yen. Chief executive Keith Ludeman, 1350 has made losses for the last two which itself has never made a profit Revenue is seen rising 7.1 per cent who is due to stand down next decades, said they would send a for- since starting operations in 2000 to 9.4 trillion yen, and Nissan plans to 1300 month, said: “Since the depth of the 28 Mar 15 Apr 11 May 1 Jun 21 Jun mal demand for payment on Monday under the name Spyker, tumbled 4.3 double its dividend to 20 yen this recession in 2008, Go-Ahead has seen if their members had not received per cent to €3.10. year. CITYA.M. 24 JUNE 2011 News 19 Vale scraps its plan to sell Arena says it is considering sale shares in its fertiliser arm ▲ RACING Arena, which owns and operates confidence remained fragile. BY STEVE DINNEEN seven racecourses in the UK, includ- Arena’s shares, which have gained ing Doncaster, Royal Windsor, 22 per cent in the last three months, THE UK’s largest racecourse opera- Lingfield Park and Wolverhampton, closed at 37p yesterday. ▲ leading makers of phosphate-based tor Arena Leisure yesterday con- said a strategic review has just begun TECHNOLOGY ANALYSIS l Arena Leisure BY HARRY BANKS food nutrients. firmed it is considering a sale of the and there is no certainty it will result “The next step will be to take Vale company. in an offer for the company. p BRAZILIAN miner Vale said yesterday Fertilizantes private. Therefore, Vale is Last year billionaire property Earlier this year Arena won a cater- 36 it has scrapped plans to sell stock in its not considering an eventual listing of investors David and Simon Reuben ing contract for two key venues at the 34 37.00 fertiliser division, and now aims to a subsidiary holding its fertilizer raised their stake in Arena Leisure to 2012 London Olympics, which is 23Jun 32 take the unit private by buying up the assets,” the company said. a level just shy of 30 per cent, which expected to boost its profits by up to share it does not already own. In 2010, Vale said it was paying was expected to trigger a takeover bid £1m. 30 Vale plans to pay up to 2.2bn reais $3.8bn to acquire US-based Bunge’s fer- for the company. The company, which posted an 28 (£870m) to buy out minority investors tilizer assets in Brazil, which included It is thought the pair may still be adjusted pre-tax profit of £5.4m last 26 of Vale Fertilizantes, whose main asset a stake in Fosfertil. Vale has vastly interested in taking control of the year, said in May that 2011 profitabili- is a stake in Fosfertil. expanded its role in potassium and firm. They could not be reached for ty was unlikely to see a “material 24 Vale Fertilizantes is one of Brazil’s phosphates as demand has soared. comment by City A.M. yesterday. uplift” from last year as consumer 17 Jun 20 Jun 21 Jun 22 Jun 23 Jun l NEWS FROM THE PARIS AIR SHOW NEWS | IN BRIEF Cost cuts help revenues at Norcros Profits up at Jet2 owner Dart British shower and tile maker Norcros said its Aviation and distribution group Dart, which full-year profit tripled helped by demand for owns Jet2, said yesterday that pre-tax prof- new products and cost cuts. Adjusted pre-tax its rose by 18 per cent to £26.2m, and profit for the year ended 31 March was raised its dividend to 0.83p per share. £10.2m, compared with £3.4m in the year-ago Profitability increased in aviation, primarily due period and revenue rose 15.6 per cent to to increasing load factors, but decreased in dis- £196.1m. Norcros said it would pay a final divi- tribution due to start-up costs at the new dend of 0.24p per share. Its shares have North West distribution centre and the ratio- gained 24 per cent in the last three months. nalisation of the container operations.

Tony Fernandes has made AirAsia the largest customer of Airbus Picture: GETTY AirAsia inks £11bn deal with Airbus

▲ AVIATION It also marks an attempt by tomers, lagging only the US leas- BY HARRY BANKS & KASMIRA JEFFORD Airbus to prove the case for its ing giants ILFC and GECAS . Feel at Home in Your New Language decision to update the best-selling A senior source familiar with AIRASIA thundered into the Paris A320 passenger plane, the back- the deal said that a clause would Speak Chinese confidently, with the NEW Rosetta Stone TOTALe™ solution. Air Show with a record order for bone of low-cost airlines, and put allow AirAsia to extend the deal 200 revamped A320neo jets on pressure on rival Boeing which is by another 100 aircraft though Immerse yourself in your new language, learning as if you were in the country. With over Thursday -- an $18.2bn (£11bn) undecided whether to match or this was not formally presented as 20 languages to choose from, you will feel your confidence grow as you start speaking and deal that makes the Malaysian trump that move. an option, which would have cost understanding the language from the very first lesson. firm Airbus’s largest airline. “The neo is not only a better the airline extra. AirAsia chief executive Tony engine, but a better aircraft in lots Fernandes confirmed at the Fernandes, who is also trying to of things,” Fernandes said at the press conference that he had not invest in West Ham, flew into signing ceremony for the deal. taken any options at this point. FREE EXPRESS SHIPPING France overnight to sign off on The AirAsia order eclipsed a AirAsia also plans to take anoth- what one Paris brokerage termed $16bn order for 180 aircraft from er 86 aircraft already on order Quote ‘AM’ at checkout. an “amazing” 200-plane deal, India’s Indigo, sealed on from Airbus to feed growth in its which is also seen as a coup for Wednesday, as the biggest ever markets, quashing speculation of engine maker CFM International. civil aircraft order by the number conversions to the new plane. “It is a culmination of a lot of of planes. Shares in Airbus parent EADS hard work,” Fernandes told City The deal adds to evidence of a bucked a weaker stock market yes- A.M. “We operate in the market of multi-speed recovery that has terday to close up 0.78 per cent at Learn Naturally. Speak Confidently. € almost 2bn people so there is seen Asian economies plan for fre- 22.20. Visit RosettaStone.co.uk plenty of opportunity for us.” netic transport growth, especially Industry analysts say the rush The deal wraps up a frenetic in the low-cost sector. of orders may put pressure on Paris Air Show which confirmed a Underscoring how price-sensi- Boeing to make up its mind strong rebound in Asian demand tive travel has shifted the balance whether to re-engine its compet- and sent industry records clatter- of power in the industry, AirAsia ing 737 airplane in 2016 or wait a ing like an airport departure and IndiGo are now Airbus’s first few years longer and build an all- ©2011 Rosetta Stone (UK) Ltd. All rights reserved. Patent rights pending. Offer cannot be combined with any other offer. Free Express Shipping for UK and Ireland board. and second largest airline cus- new model. residents only. Offer expires 1st of July 2011. UK-0611-17 20 News CITYA.M. 24 JUNE 2011 Headline sponsor ALTERNATIVE MANAGER

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lternative fund managers rep- tional investors is climbing rapidly lion and looks set to shape the invest- resent one of the fastest-grow- thanks to their above inflation ment landscape more and more in MAN GROUP (£43.6bn). ing and most in demand areas returns and low correlation to stock future. Our list includes two activist Man has made some smart Aof investment management. and bond markets. The global indus- funds because they have risen to the moves to revive its performance: it Demand for hedge funds from institu- try is now worth more than £1.2 tril- fore to keep corporates on their toes. paid $1.6bn in November to buy highly successful smaller rival GLG Capital and become the world’s BLUECREST LAXEY BREVAN largest listed hedge fund. CAPITAL PARTNERS HOWARD That has paid dividends – by March, it had returned to positive fund flows with $700m net coming in. Man Group’s fortunes have really It also banked $633m from the turned in the past year. Funds sale of its 25 per cent stake in small- under management, which took a er fund BlueCrest Capital that tumble in the aftermath of the month – and in May news that it credit crunch, have risen three per had raised $2bn from Japanese cent since the start of 2011 alone to investors for its Nomura Global take its mammoth total to $71bn Trend fund caused its shares to A star performer, BlueCrest is one Laxey Partners has been established Europe’s biggest hedge fund, with soar. of Europe’s largest and most suc- 13 years and earned a reputation as $32.6bn (£20bn) under manage- cessful hedge funds with $25bn a feared corporate raider through ment, Brevan Howard is now the (£15.3bn) of funds under manage- agitating at companies such as world number four and still grow- SHERBORNE firm’s performance. ment. Its hedge funds are widely Wyevale Garden Centres and ing. INVESTORS Its analysis of F&C’s share price regarded to have had a successful British Land to raise their share Its three London-listed tributary discount, its acquisition strategy year. prices. funds – BH Macro, BH Global and and debt profile won over institu- BlueCrest is valued at about It is also known for buying into BH Credit Catalysts, which listed tional investors including Aviva $2.5bn, according to the $633m investment trusts with hefty dis- last November – feed into a multi- and M&G. price tag on the 25 per cent stake it counts, forcing them to restruc- fund empire. While F&C’s board criticised bought back from Man Group in ture, buy back shares or wind up. Its master fund holds more than Bramson’s refusal to articulate a March and has refused to submit to This year it took a 1.5 per cent stake $25bn under management and strategy for the firm, about 70 per the rule that big funds cannot in Alliance Trust, demanding it delivered returns of roughly 20 per cent of its shareholders voted to deliver top returns. bring in a mechanism to control its cent in both 2008 and 2009, giving add three new directors, including While opening a Geneva office it 20 per cent share price discount. Brevan one of the best long-term Sherborne, the brainchild of serial Bramson as chairman, to F&C’s has also defended London as a Five months and £50m of share performances in its peer group. fund manager Edward Bramson, is board. hedge fund hub and still bases 240 buybacks later, the discount is 15 Credit Catalysts reported a 13.5 per another activist to leave its mark on It moved Sherborne from a of its 380 staff in the City. per cent or less and the share price cent jump in net asset value in the the FTSE 100 in the past year. It £105m IPO in 2010 to control of an Its management also bought has gained almost five per cent. year to December, while the others began buying into F&C Asset £106bn asset manager. Bramson’s back Man Group’s stake to gain Its latest target for boardroom saw smaller gains. It has offices Management last August and called review of F&C’s strategy will report total ownership of the firm – a vote change is Singapore’s UIS. around the world, including for a board shakeup to kick-start the soon. of confidence in its future success. London, Geneva and Hong Kong. DEALMAKER OF THE YEAR | Sponsored by

ecessions are when reputations our list have seen opportunity in cri- Don’t miss the City event of the year – are made, they say, and that has sis, and pushed ahead with flotations get online now and book your table for RUPERT His division has won slots on been true in the world of fund and expansions, or have just taken the City A.M. Awards on Thursday 28 HUME- many of the capital-raising mega- Rmanagers. While some have bat- the chance to expand. All are stars in October 2010 at Grange St Paul’s Hotel, deals of the year, acting as a joint tened down the hatches, the ones on their own way. London EC4. www.CityAMAwards.com KENDALL book-runner on Glencore’s $60bn BOA float and joint lead on both the suc- cessful $3.3bn privatisation of JIM SIMON JOSH MERRILL Russia’s VTB and on the $7.1bn capi- RENWICK ROBEY LYNCH tal raising by Italy’s Intesa Sanpaolo. CRITCHLEY Under his leadership, Merrill BARCLAYS MORGAN RBC Lynch has become the go-to bank for CAPITAL STANLEY capital raisings, a position it is likely As chairman of Bank of to cement by leading the London America/Merrill Lynch’s flagship float of Santander UK, expected to global capital markets division, raise around £4.5bn. Hume-Kendall has led a business He has also presided over a wel- drive that has seen the bank become come period of stability in the bank’s the second biggest underwriter of capital markets team after the turbu- deals globally since the start of 2011. lence of the financial crisis. Barclays Capital has swept up the Morgan Stanley’s well-known UK Formerly of Goldman Sachs, equi- ranks of corporate brokers since Jim chief executive and co-chair of M&A, ty capital markets (ECM) and cor- Renwick moved to the bank from Simon Robey has a reputation for a porate broking chief Josh Critchley UBS last year to be chairman of cor- canny strategic mind that anxious has led a hiring and new business Cleared of misleading promi- porate broking and head of UK equi- management can call upon in times drive that has seen RBC Capital DAVID nent Citi client Guy Hands’ Terra ty capital markets (ECM). of trouble. Markets repeatedly finding itself WORMSLEY Firma over the purchase of EMI in The bank broke into the top ten in No wonder that Morgan Stanley head to head – and often also November 2010, Wormsley FTSE 100 corporate broking this year has, through Robey’s work, gained a advising alongside – this year’s CITI returned to London from the after signing its first FTSE 100 client, slot as lead adviser on both LSE’s other mover up the corporate court rooms of New York to bag National Grid, in October, and has C$3.2bn takeover bid for Canadian broking ranks, Barclays Capital. his bank a top spot in the biggest since added International rival TMX and BSkyB’s ongoing deal- Critchley has established a new float in UK history, leading a con- Consolidated Airlines Group (the ings with News Corp this year – not financial institutions group (FIG) sortium of 23 banks that brought result of British Airways’ merger to mention Robey being in for advice at the bank and led RBC to gain a commodities giant Glencore to with Iberia), Resolution and 3i to the during last-ditch efforts by BP to save slot on LSE’s bid for TMX, along- market. fast-growing list. its Arctic tie-up with Rosneft. side bulge bracket banks like All the more impressive because Renwick has advised Resolution The bank narrowly missed out on Morgan Stanley and BarCap, as Even in the fast-moving City, it’s Wormsley helped pull off the on its £2bn right issue and accompa- a high-profile mandate to re-priva- well as Resolution’s £2bn rights rare to have quite such ride from $60bn float, which raised some nying purchase of AXA’s life insur- tise Northern Rock due to its ongo- issue last year. rock bottom to the heights of suc- $10bn in London and Hong Kong, ance arm for £2.75bn and secured a ing relationship with National Most recently RBC has been cess as Citi’s UK banking chairman against the backdrop of wildly place for BarCap advising LSE on its Australia Bank, which could be a bid- working on the $1bn float of David Wormsley – known to those fluctuating commodity prices and attempted C$3.2bn takeover of TMX. der, but is already seen as the front- Ophir Energy, the African-focussed in the business simply as “The a shaky local IPO market that has runner to buy Lloyds’ 632 branches. exploration company. Worm” – has seen in the last year. forced lesser rivals to turn back. CITYA.M. 24 JUNE 2011 News 21

CITY MOVES | WHO’S SWITCHING JOBS Edited by Harriet Dennys in association with

PwC has appointed leveraged finance ing, and Andrew Shapiro, who started team, which has been expanded to Hydrodec practitioners John Williams and David at BNP in 1996, has been appointed as comprise 11 customs specialists. The industrial oil re-refining group has appointed Godbee to Atkinson’s team as partners, head of loan syndications and trading Deloitte has also strengthened its tele- former Betfair director Andrew Black to the and Nick Carmichael joins as a director. and head of structured finance UK. coms team with a new partner, Faizul board as a non-executive director, in his first Ali, and two directors, David Green and public company directorship since leaving the Alliance Trust BDO Allan Ronn, who all join from the HP online gaming group he co-founded in 1998. The investment firm has appointed Mark Bomer, who has been with the communications consulting practice. Black, who made a reported £300m on Betfair’s Ilario Di Bon, formerly head of institu- accountancy group for 25 years, has float when the business entered the FTSE 250 in tional global equities at Fidelity been promoted from corporate finance Otkritie October 2010, owns a six per cent equity stake International, as head of global equities. partner to the next senior partner in The Russian financial group has hired a in Hydrodec and invested in the recent debt the firm’s London office. He takes over team of 11 to strengthen its expanding instrument. Black’s current directorships include BNP Paribas from Simon Bevan, who has recently fixed income and strategy department. Foreteller, Golfbidder and Portway Press. The London office of BNP Paribas retired from the business. The team will be led by Ron Solberg, Corporate and Investment Banking has formerly co-founder and managing PwC options for mid-sized and large busi- made two promotions. Charlotte Deloitte director of investment manager Nick Atkinson has joined PwC as a nesses. Most recently, Atkinson led the Conlan, who joined BNP in 2000, has The business advisory firm has Armoured Wolf, who has been named partner to lead an expanded business European leveraged finance team at been appointed as head of origination appointed Howard Levene, formerly of managing director, head of fixed unit to advise on capital structuring Royal Bank of Canada. In addition, and sales for loan syndication and trad- Delphi Automotive, to lead its customs income research and strategy. To appear in CITYMOVES please email your career +44 (0)20 7092 0053 updates and pictures to [email protected] SPECIALISTS IN GLOBAL PROFESSIONAL RECRUITMENT morganmckinley.com

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ANALYSIS l Rio Tinto ANALYSIS l Aegon NV ANALYSIS l Clariant 16.00 p € 4600 5.4 19.00 CHF 23 Jun 4156.50 4500 23 Jun 5.2 18.00 4400 5 4.40 4300 4.8 23 Jun 17.00 4200 4.6 4100 4.4 16.00 4000 4.2 28 Mar 15 Apr 11 May 1 Jun 21 Jun 28 Mar 15 Apr 11 May 1 Jun 21 Jun 28 Mar 15 Apr 11 May 30 May 21 Jun RIO TINTO AEGON CLARIANT Citi rates the mining major as a “buy” with a target price of £52, driven by a Nomura says that the insurance group’s capital-light strategy should facili- ING initiates its coverage of the Swiss chemicals company with a “hold” recovery in earnings from its diamonds and minerals (D&M) group combined tate a fall in capital requirements in spite of strong earnings growth over recommendation and a target price of CHF17 (£12.70), with analysis show- with the leverage to iron ore prices, as the wave of supply struggles to reach the next five years. The broker thinks the strategy should allow Aegon to ing that the current share price already incorporates a significant improve- markets. D&M’s contribution to the group had fallen from 30 per cent from release at least €2bn of capital, while allowing earnings to grow by 29 per ment in earnings power going forward. The broker also sees a significant 1996-2000 to a low of two per cent in 2010, but the recovery now means cent. Nomura reiterates its “buy” rating on the stock, and raises its target risk in buying the stock at current share price level by assuming a contin- minor changes to the broker’s earnings estimates. price from €8 to €8.50 as the group’s financial flexibility looks stronger. ued growth in margins for the coming years. FTSE tumbles to three-month Greece’s austerity closing low on energy worries deal lifts Wall St

and cruise ship operator Carnival days ago you would have had more Earlier in the day, markets had sold headed a short list of blue-chip ris- legs to the upside, but I think traders off as oil’s slide to a four-month low THELONDON ers, up 0.8 per cent and 0.7 per cent are still very nervy because Greece THENEW YORK triggered declines in a fragile market respectively. has basically just about got over one after Federal Reserve chairman Ben Shares in the independent bank hurdle but has plenty more to come Bernanke’s comments about a slow- REPORT Numis were unchanged at 101p across,” said Manoj Ladwa, senior REPORT ing economic recovery a day earlier. despite market talk of there being an trader at ETX Capital. U.S. August crude oil futures set- INERS and energy stocks offer on the table to settle a legal “There seems to be very little in tled at $91.02 a barrel, down $4.39, were the worst hit members claim in relation to a private placing the way of conviction buying and I S stocks closed way off session after the International Energy of Britain’s sharply lower in 2007 in respect of Rock Well think that traders are using any rally lows yesterday on news Greece Agency said it will release 60m bar- MFTSE 100 index yesterday, hit Petroleum. in the markets as an excuse to close agreed to a five-year austerity rels of oil from strategic stockpiles. by heightened fears of a slowdown in Market sources suggested that out of existing long positions or to Uplan, but lingering economic The slide in the price of oil was global growth. Numis had made an offer of more go short.” uncertainty ultimately drove indexes exacerbated by a 0.7 per cent climb in The FTSE 100 ended down 98.61 than £20m to settle a claim being Among individual movers, energy mostly lower, keeping a downward the US Dollar Index, which tracks the points, or 1.7 per cent, at 5,674.38, its taken out against it led by the hedge supplier Centrica dropped 2.1 per trend in place. greenback’s performance against a lowest close since 16 March when fund CQS in the High Court. Numis cent after gains in the previous ses- The Nasdaq wiped out all its losses, basket of major currencies. In times markets were plunging in the imme- declined to comment. sion inspired by vague bid rumours, ending the session higher and back of stress, the flight to safety that diate aftermath of the Japanese Investors were also forced to stom- after the firm said Britain’s first new in the black for the year. pushes the dollar higher makes oil earthquake. ach weak data on the US labour mar- nuclear plant, scheduled for early The news out of Greece set the more expensive, further sapping Miners and integrated oil sto