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Morning business news

Written by Paul Williams
Thursday, 20 November 2008
Woolworth's faces administration threats and a look at the unanimous backing by Lloyds TSB shareholders for the HBOS deal. It has emerged that Woolworths (LON:WLW) needs to complete the disposal of its loss-making retail business before Christmas in order to avoid the risk of being pushed into administration by its lenders. Related Articles Former Lloyds TSB exec appointed at SAV Credit Deutsche Bank appoints George Lee Brits to put shares into Christmas stockings Morning business news: 22 December Morning business news: December 18 Yesterday it emerged that after debt was taken into consideration the company would be sold for a mere £1. The board of the retailer fears that the group’s lenders could push the entire business into administration – including its profitable wholesale and publishing divisions – if they hang on to the troubled retail arm, says the Telegraph. The FT adds that the group’s biggest shareholder on Wednesday criticised talks between the retailer and Hilco UK, the retail restructuring company, arguing the group’s stores were worth much more than the nominal price under discussion. Lloyds TSB merger approval Ninety-six percent of Lloyds TSB (LON:LLOY) shareholders approved the deal at an annual general meeting in Glasgow. The shareholders voted as an alternative proposal for HBOS shareholders from two Scottish grandees becomes less likely. There were protests outside the meeting by members of the banks' trade unions who fear the deal will lead to as many as 40,000 job cuts, writes the Independent. Other business news making the morning papers A financial stimulus package worth €130 billion (£109 billion) is being prepared by the European Commission to help to boost industry and the economy, a German minister said yesterday. The recovery plan, which the EU’s executive arm plans to unveil next Thursday, will amount to 1 per cent of each country’s GDP, according to Michael Glos, the German Economy Minister, writes the Times. Banco Santander (NYSE:STD) has snubbed 1.8 million small shareholders in Britain, excluding them from taking part in its €7.2 billion (£6 billion) capital-raising, it became clear yesterday. The shareholders, who became Santander investors when the Spanish bank took over Abbey (LON:ANLA) and Alliance & Leicester, will not be able to take part in the rights issue, according to the Times. The Bank of England has issued a warning to Gordon Brown that it may reconsider further interest rate cuts if he cuts taxes too far on Monday, reports the Telegraph. Deutsche Bank (NYSE:DB) has become the latest big-name investment bank to cull its workforce, as it prepares to cut 900 jobs, with London and New York set to suffer the worst. Sources at the German financial powerhouse confirmed that almost one in seven traders faced the axe from its Global Markets division, as trading has slowed in the wake of the financial crisis, writes the Independent. The boom times have come to an abrupt halt for Aim, London’s lightly regulated share market for smaller companies that drew envy from rival financial capitals in recent years as it attracted listings from companies from around the globe, says the FT. Steve Ballmer, Microsoft's chief executive, reopened the door to a deal with Yahoo! on its search business yesterday, but ruled out buying the struggling internet company, according to the Times. Fidelity International, which manages £135bn on behalf of about one million British investors, is to axe one in seven of its staff after falling sales and rising withdrawals from unit trusts, says the Telegraph. The International Monetary Fund (IMF) approved a $2.1 billion emergency package for Iceland last night to help Iceland rebuild its tattered economy. The two-year “stand-by” arrangement is structured to allow about $827 million available immediately, writes the Times.