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Morning Business News, Friday 05 February: Bank of America Corp, Liberty International, EMI, start up bank flotation and BP. Bank of America Corp (NYSE:BAC) is to face a civil suit over the conduct of its top executives at the time of the Merrill Lynch takeover. New York Attorney General Andrew Cuomo alleges that Kenneth Lewis, BoA’s former chief executive, and Joe Price, currently head of the bank’s consumer arm, hid a $16.2 billion pre-tax loss at Merrill from shareholders, then lied to the Federal Reserve and the Treasury to get a $20 billion bailout.
“The conduct of Bank of America, through its top management, was motivated by self-interest, greed, hubris and a palpable sense that the normal rules of fair play did not apply to them,” Cuomo said.
Attorney's of Price and Lewis have vehemently denied the allegations.
The news comes as the Securities and Exchange Commission (SEC) said yesterday that Bank of America Corp had agreed to pay a $150 million civil penalty, which will be distributed to shareholders, over its failure to tell investors of Merrill’s losses or bonuses.
Liberty International
Liberty International (LON:LII), the largest shopping centre owner in Britain, is to split its £2.8bn business in one of the largest corporate restructurings in the UK's listed real estate sector.
The demerger process, which has been overseen by Rothschild, is in its final stages. An announcement is expected as early as this month on the details of the split. UBS and Merrill Lynch are likely to advise in what will be one of the largest recent deals involving a FTSE 100 company, the FT reports.
EMI
EMI’s accountants have raised “significant doubt” about its ability to continue as a going concern in a report that lays bare the parlous state of Terra Firma’s £4.2bn investment in the music company behind Katy Perry and The Beatles. Guy Hands, Terra Firma’s founder and chairman, has written to investors in two of its private equity funds asking them to inject another £120m, subject to EMI Music producing a new strategic plan, the FT reports.
Walton & Co flotation
Plans for a £200m flotation of Walton & Co, a start-up bank, have been pulled because of a lack of support from investors. Sandy Chen, a Panmure Gordon banking analyst, who has been working on the project for months, has been forced to abandon the initial public offering next month after intensive marketing with fund managers did not yield sufficient funds, the Times reports.
BP
Policymakers are fooling themselves if they believe greener sources of energy alone can adequately meet Britain's needs for the next decade, the chief executive of BP warned last night. Demand will not be met by the "very ambitious" nuclear programme and planned increases renewable energy capacity, Tony Hayward said, reports the Independent.
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