Economy
Uphill struggle for BHP Billiton |
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| Economy | |
| Written by Catherine Murray | |
| Monday, 23 August 2010 | |
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Morning business news, Monday 23 Aug: BHP Billiton and Vedanta mining, BAE Systems. BHP Billiton could face an uphill struggle to sell its $39bn hostile bid for PotashCorp of Canada to its shareholders in a round of crunch briefings this week in the City and Scotland. Some of the leading investors in the Anglo-Australian mining group are worried that it will be drawn into an expensive bidding war for the company, whose shares have surged past BHP’s rejected $130-a-share offer, the Times reports. The mining giant, which launched the hostile bid last week, will display its financial firepower this week when it unveils a doubling of annual profits to about £12.7bn, but the Anglo-Australian miner is not guaranteed success in its takeover attempt. It is understood talks have already been held between PotashCorp, based in Saskatchewan, and Sinochem, the Chinese state-owned chemical group, aimed at seeing off BHP. BHP’s bid for PotashCorp has stoked takeover fever across global markets amid speculation that a mergers and acquisitions (M&A) boom is on the cards as cash-rich companies splash out on expansion, according to the Observer. The paper reports that analysts say British companies in the takeover frame include ITV, targeted by NBC; BG, the gas and exploration group, which is being stalked by oil majors such as Shell; insurance company Prudential, a possible target for a break-up bid by Aviva and Resolution; miner Xstrata, which is being eyed by Swiss commodities group Glencore; AstraZeneca, the drugs company, which could attract interest from GlaxoSmithKline or European rivals; and Sainsbury, where the Qataris have built up a minority stake. The Sunday Telegraph also reported over the weekend on BHP’s pursuit of PotashCorp. Marius Kloppers will this week lead a team of BHP Billiton executives on a charm offensive across five continents in a bid to convince shareholders that its $39bn (£25bn) bid for PotashCorp is the best strategic move. The mining company's board, led by Kloppers, the chief executive, will also meet a number of large investors with cross-holdings in Potash and BHP during the whirlwind tour across the UK, Australia, South Africa, Asia, the United States and Canada, paper reports. Vendata mining permission in India forVedanta Resources is bracing itself for a crucial ruling by the Indian government this week on the company's planned bauxite mine in the eastern state of Orissa, which could finally lead to a decision on whether the project gets the go-ahead. The London-listed mining giant is expecting to hear the opinion of India's Forest Advisory Committee within the next few days. The committee has already been advised by a panel of experts that Vedanta should not be granted permission for the mine, the Independent reports. BAE Systems export licenceThe US state department will formulate a company specific "policy" to address export licence approvals for BAE Systems and its subsidiaries following an analysis of the UK defence group’s guilty plea to criminal charges in March and discussions with BAE representatives, a department official said, reports the FT. Nervous markets after Australian electionSeveral FTSE 100-listed resources companies are set to face nervous markets this morning, in the first day of trading since Australia's indecisive election result over the weekend raised the spectre of more changes to Canberra's planned super-tax on mining industry profits, the Independent reports. Workplace parking leviesMotorists across the country could be charged hundreds of pounds a year to park at work after councils were ordered by the government to find new ways of raising money. It had been thought plans for workplace parking levies would be abandoned after ministers declared an end to the "war on motorists" within days of the Coalition's formation. But The Daily Telegraph has learned that a number of local authorities are actively examining introducing the charge in an attempt to raise funds. FSA toughens upA recruitment drive for extra staff to fight commercial crime has been started by the Financial Services Authority as it tackles proposals to strip it of the role regarded as one of its most important functions. Margaret Cole, the head of enforcement and financial crime, is taking on about 30 staff to strengthen her division, which takes action against breaches of City regulations and mounts criminal prosecutions, the Times reports. Luminar refinances debt burdenLuminar is expected to pursue a refinancing of its £90m net debt burden in an attempt to allay mounting fears over its future. The move could go ahead even if the embattled nightclub operator avoids breaching its covenants when they are tested this week. The covenant test, due to take place on Thursday, will establish whether the Oceana and Liquid operator has breached its £175m facility, the Times reports. Govt promoting UK energy companies abroadDavid Cameron and other British ministers will "get out there" lobbying Russia and other oil-rich countries to give UK energy companies new business, according to Charles Hendry, the energy minister. In the past few weeks, the government has called a meeting of ambassadors informing them that British politicians are actively looking to help UK businesses secure big deals abroad. Hendry told The Daily Telegraph that the potential development of giant oil fields in northern Russia is a place where the Prime Minister or an energy minister should be promoting energy companies and key suppliers. Public sector suppliers go bustThe number of businesses going bust that supply goods and services to the public sector has increased by 47%, as government spending cuts lead to delayed and cancelled contracts. According to accountancy firm Wilkins Kennedy, 168 businesses in the health and social services, education and defence sectors went bust in the first half of this year, compared with 114 in the same period in 2009, suggesting austerity measures are already leading to business failures, the Telegraph reports. |
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