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Monday newspaper round-up: Bradford & Bingley, Fortis, British Energy
Thu, 08 Jan, 2009
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Monday newspaper round-up: Bradford & Bingley, Fortis, British Energy
Mon, 29 Sep 2008, 06:18:00
Santander, the Spanish banking giant and owner of Abbey National and Alliance & Leicester, has bought
Bradford & Bingley's
branch network and £21bn deposit book, leaving the Treasury to nationalise the failed mortgage lender's £50bn loan book, reports the Telegraph.
Santander, which last month agreed to buy A&L, is to acquire B&B's depositor base of 2.7m customers and its network of 197 leasehold branches. Sources close to the negotiations, which ran throughout the weekend and late into last night, said the Spanish group would pay about £150m - little more than half the failed bank's market capitalisation at the end of last week.
The nationalisation of Bradford and Bingley is set to push the combined burden of
public sector debt
and exposure to the housing market resting on the shoulders of the UK taxpayer to almost £1 trillion. At around 65 per cent of GDP, it will make a mockery of the Government's "sustainable investment rule", which aims to keep net debt at below 40 per cent of GDP, reports the Independent.
The governments of Belgium, Holland and Luxembourg last night unveiled a €11.2bn (£8.9bn) joint nationalisation of
Fortis
as the Benelux banking giant became the first major continental European victim of the global credit crunch. Yves Leterme, the Prime Minister of Belgium, announced that his Government would invest €4.7bn to buy 49% of the group's equity. Luxembourg and the Netherlands are to spend €2.5bn and €4bn, respectively, buying 49% stakes in the bank's units in those countries. Fortis is also set to sell its stake in ABN Amro while its chairman, Count Maurice Lippens, is to resign, writes the Times.
One of
British Energy's
biggest investors has so far declined to sell its stake to EdF, believing that the French company's £12.5bn takeover bid may yet fail regulatory hurdles. M&G, which owns 5% of the UK nuclear power generator and helped block EdF's original offer, argues that the revised bid significantly undervalues British Energy, reports the Telegraph.
The management of
MFI
saved the troubled kitchens retailer from administration last night when it secured financing for its acquisition. However, the rescue could result in the closure of up to 100 of the high street chain's 200 stores, although the new owners would not confirm their plans last night, reports the Times.
The
US financial services sector
could be forced to reimburse the US government for any losses on its $700bn rescue plan under a breakthrough agreement that paves the way for congressional approval as early as Monday. After a weekend of frenzied talks, Hank Paulson, the Treasury secretary, and Nancy Pelosi, the Democratic House speaker, announced early on Sunday that a tentative deal had been reached authorising the government to buy up to $700bn of troubled assets from financial institutions, reports the FT.
Goldman Sachs
is seeking to acquire up to $50bn in assets from ailing US banks as part of its push into commercial banking, Goldman executives say. Goldman and Morgan Stanley last week said they would give up their status as independent investment banks and apply to become bank holding companies, a change that would subject them to stricter regulation by the Federal Reserve, writes the FT.
The mining start-up industry will be damaged if investors in
RAB Capital's
flagship $923m hedge fund reject restructuring proposals at an emergency meeting on Monday, a mining entrepreneur warned. Irwin Olian, chairman and chief executive of Sacre-Coeur Minerals, a Canadian company in which RAB's Special Situations fund invests, said it would be "extremely negative for the whole industry" if the fund were wound up. RAB has told investors the fund will be closed if they do not agree to lock up their money for three years, reports the FT.
BAE Systems
, Europe's largest defence contractor, has appointed Deloitte to conduct an independent review of its business practices to ensure they meet the highest ethical standards. Deloitte won the contract last week after a beauty parade of auditors, BAE confirmed, reports the FT.
Related Newspaper Articles:
Taxpayers must risk billions for Bradford & Bingley
-
Times
Taxpayers must risk billions for Bradford & Bingley
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Times
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