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    ALEX Hope, the 23-year-old trader who hit theheadlines after spending 125,000 on a singlebottle of champagne, has been arrested onsuspicion of being involved in anunauthorised foreign exchange tradingscheme.

    Hope, who claims to be a selfmade foreign

    exchange trader, became infamous afterrunning up a 200,000 bar bill in one eveningat a Liverpool nightclub. Most of this wasspent on a single 99lb bottle of champagne.The story subsequently became front-pagenews after the receipt was leaked to the press.

    But yesterday the Financial ServicesAuthority (FSA) said that it had arrested aman in east London on suspicion of

    committing offences under the FinancialServices and Markets Act 2000 and the FraudAct 2006.

    Hopes publicist last night confirmed thathe had been arrested but said that he deniesall allegations. The FSA confirmed no onehas been charged in connection with theinvestigation and that the arrest is notlinked to any other investigations.

    GETTY

    BUSINESS WITH PERSONALITY

    Top Tory MP:Ian Hannam

    fine is unjustTHE FSAs approach was slammed asun-British yesterday as it hit star JPMorgan Cazenove banker IanHannam with a 450,000 fine,prompting his resignation.

    David Davis MP, a prominent Torybackbencher, said the regulatorsdisciplinary process is against tradi-tional principles of British law.

    He called the FSAs action againstHannam unbelievable, saying:Its un-British. There should beequality of arms, meaning that theprocess should be a fair fightbetween prosecution and defence.

    This is an incredible extension ofwhat constitutes insider trading bythe FSA, he added. Its quite anastounding pattern of behaviour bythe FSA.

    Hannam quit his job as chairmanof equity capital markets at JPMorgan Cazenove yesterday in orderto launch a full-scale defence of hiscase at an independent tribunal,which could take up to 18 months.

    The FSA said he had committedmarket abuse by leaking insideinformation about bid talks and oildiscoveries made by his clientHeritage Oil, to another client in thesector.

    One banker close to Hannam said:Its a massive scalp for the FSATheyre dancing on the grave of ourdying industry.

    However, others were more sup-portive of the FSA. One seniorenforcement lawyer said: The FSAis quite entitled to take the action

    its taken. He [Hannam] is clearly aninsider and passed on informationin breach of confidentiality.

    James Murdochs resignation as chairman of BSkyB was his fifth board exit in as many months

    JAMES Murdoch yesterday resigned aschairman of BSkyB with immediateeffect, just weeks after stepping downfrom News International to concen-trate on his television businesses.After almost a decade on the Sky

    board, Murdoch yesterday announcedto fellow directors that he felt this isthe right time to step aside as atten-tion continues to be paid to past eventsat News International.

    He added: My role as chairmancould become a lightning rod forBSkyB and I believe that my resigna-tion will help to ensure that there is nofalse conflation with events at a sepa-rate organisation.James Murdoch, whose father

    Ruperts company News Corp owns 39per cent of BSkyB, is at the centre ofseveral ongoing investigations.The parliamentary inquiry into

    phone hacking at News Internationalpublications which is looking intoJames Murdochs leadership of thegroup during that time is due todeliver its verdict later this month,leading to speculation that he jumpedfrom BSkyB before he was pushed.

    Murdoch is expected to be calledbefore the Leveson inquiry within the

    next few weeks. BSkyB is the subject ofa recently escalated Ofcom probe intowhether it is fit and proper to own abroadcast licence.

    Murdochs exit from the chair of

    www.cityam.com FREE

    BSkyB is his fifth resignation in asmany months. In November he relin-quished the chairmanship of NewsGroup Newspapers, the holding com-

    pany of the Sun and the now defunctNews of the World, before steppingdown as executive chairman of NewsInternational in February.

    He also recently quit his positions on

    the boards of GlaxoSmithKline andSothebys auction house.

    Despite reports last summer thatSkys independent directors wanted to

    get rid of James Murdoch, the chair-man was re-elected to his seat at thecompanys shareholder meeting inNovember. But 44 per cent of inde-pendent shareholders including JP

    Morgan, UBS and Legal & General opposed or abstained from the vote.The chair will be taken by Nicholas

    Ferguson, currently deputy chairman

    and senior independent director. TomMockridge, a non-executive director ofBSkyB and chief executive of NewsInternational, will step up to deputy.

    BY JULIET SAMUEL

    FTSE 100 5,838.34 -36.55 DOW 13,199.55 -64.94 NASDAQ3,113.57 -6.13 /$1.59 -0.01 / 1.20 unc /$1.32 -0.01

    ISSUE 1,606 WEDNESDAY 4 APRIL 2012

    Certified Distribution

    30/01/2012 till 26/02/2012 is 98,573

    EXCLUSIVE: 200,000 bar bill trader arrested in FSA probe

    BY LAUREN DAVIDSON

    BY JAMES WATERSON

    SKY FALLS IN ONJAMESMURDOCH

    A DECADE AT SKY: Page 3 THE INVESTIGATION: Page 4

    DEBATE: Page 27

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    [email protected]

    Follow me on Twitter: @allisterheath

    IN BRIEFChina opens up to foreign cashn China said yesterday it will raise

    the total quota for its qualifiedforeign institutional investor scheme(QFII), a main channel for foreigninvestment in Chinese securities, by$50bn to $80bn, as the currentprogramme nears its limit. Boostingthe quota was done to "satisfyforeign investors investmentdemands, and move forward inpromoting the stable developmentand opening of the domestic capitalmarkets," the China SecuritiesRegulatory Commission said. Beijingwill also raise the ceiling on a schemeallowing investors to buy mainlandsecurities using offshore yuan, by50bn yuan.

    Raleigh bikes could go Dutchn British bike brand Raleigh couldsoon be taken over by a Dutch

    company. Accell said yesterday it isin exclusive talks with Raleigh andits shareholders to acquire thefamous bicycle-maker. Raleigh,founded in Nottingham in 1890 bySir Frank Bowden, has operationsand distribution companies in theUK, as well as across the pond in theUS and Canada, and is best knownfor its Raleigh, Avenir, andDiamondback brands. It reported$260m in sales last year and sold850,000 bicycles worldwide.Several Raleigh firms were boughtby management from Derby CycleCorporation in 2001. Accell,meanwhile, is one of Europesbiggest bicycle makers, reporting40.3m profits last year on sales of628.5m.

    Hedge fund Laxey clasheswith new chair of AllianceHEDGE fund Laxey Partners led anew attack on Alliance Trust yes-terday after its demand for its man-agement to be outsourced wasdismissed by the new chairwoman.Activist investor Laxey criticised

    the staggering comments ofKarin Forseke after she backed thecurrent management of Allianceon just her second day in the job.

    Its latest public outburst, on a dayof claim and counter-claim, cameafter Aberdeen Asset Managementchief executive Martin Gilbert saidhe would be interested in manag-ing Alliances 2.9bn portfolio if itwas put out to tender.

    Sources later distanced Aberdeenfrom any prospect of taking overthe management, saying it wouldnot push out Alliance chief execu-tive Katherine Garrett-Cox and thatGilbert was merely showing inter-est in winning new business.

    Forseke said she felt very confi-dent in Alliance and said she wastotally behind Garrett-Cox. In anapparent dig at Laxey, she said:There tends to be greater incen-tive for external managers to focuson short term returns.The Isle of Man-based hedge fund,

    which owns 1.7 per cent ofAlliance, hit back at Forseke, whois also deputy chairwoman of the

    Brazils BTG bank to cement rapidrise with $15bn floatBTG Pactual is set to float later this monthin a deal that will value the rapidlygrowing Brazilian investment banksequity at up to $15bn and theshareholdings of a swathe of executives atmore than $150m each.

    BSE head appointed to key Tata roleCyrus Mistry, incoming head of the TataGroup, will yesterday announce his firstmajor hire, in a move that signals a

    further push towards expansion forIndias most global company. Mr Mistrywill appoint Madhu Kannan, chiefexecutive of the Bombay StockExchange, to a newly-created position tospearhead the next stage of growth inthe conglomerate.

    Court ruling backs buyers of Lehmanrate swapsCompanies that bought interest rateswaps from two Lehman Brothers unitscannot be forced to make payments oncontracts relating to the period after theinvestment bank collapsed in 2008, theUKs Court of Appeal has ruled.

    First rural broadband contractLancashire Council has given BT a62.5m contract to extend its fibre-opticnetwork to 97 per cent of premises by2014, using the first subsidy in a schemeto extend rural superfast broadband.

    Wincanton hit by retail slowdownWincanton said conditions in the retailsector were set to remain challenging.The fall in demand would leave thecompany with excess space in itswarehouses, it warned in an update

    Border guard shortage risks gridlockBritains airports will be reduced togridlock this Easter because there arenot enough staff to carry out checks onpassports, airlines have warned theHome Secretary.

    Tesco shuts second-hand car websiteTesco has closed its second-hand carwebsite just a year after it launched. Theretailer said the site had come to the endof the road after it couldnt procure agood supply of cars.

    Wen appeals to shake up banksChinese Premier Wen Jiabaosaidyesterday that China's state-controlledbanks are a "monopoly" that must bebroken, in an unusually blunt appeal fora shake-up of the creaky financialsystem of the world's No. 2 economy.

    FDA finds newbatch of fake AvastinThe US Food and Drug Administrationhas found a new batch of counterfeitAvastin. The FDA said medical practicesin the US have bought the fakes.

    WHAT THE OTHER PAPERS SAY THIS MORNING

    FEDERAL Reserve policymakershave backed away from the needfor another round of monetarystimulus as the US economy

    gradually improves, denting stockmarkets and pushing the dollar upagainst several currencies.

    Minutes of the central banksmeeting published last nightshowed only two of the policy-setting Federal Open MarketCommittee's 10 voting memberssaw the case for additionalmonetary stimulus.

    That was a big shift fromJanuary, when several officialsthought economic conditionsmight warrant a third round of

    bond purchases to boost growth.The Fed's assessment of the

    economy remained cautious aspolicymakers worried about a stillelevated US jobless rate andpotential risks to the recovery.

    The more hands-off tone onpolicy also contrasted sharply withcomments last week from Fedchairman Ben Bernanke, whosefocus on high unemployment ledinvestors to believe he might be

    getting ready to deliver anotherround of monetary stimulus,known as quantitative easing.

    Still the Fed remains soberabout US prospects, expressinguncertainty over the course of theeconomy over the next few years.

    Fed pours cold

    water on hopesof new easing

    Laxey boss Colin Kingsnorth and Alliance Trust chair Karin Forseke clashed yesterday

    2 NEWS

    BY HARRY BANKS

    BY PETER EDWARDS

    The new jobs website for London professionals

    To contact the newsdesk email [email protected]

    CITYAMCAREERS.com

    THERE can be no doubt that

    James Murdochs decision to stepdown as chairman of BSkyB isgood news for the company. It

    will allow its highly capable chiefexecutive, Jeremy Darroch, tocontinue building one of Britainsmost successful firms without being

    distracted by endless speculationabout the future of its chairman.That said, the separation is far from

    complete and the company willremain exposed to the fallout fromthe phone-hacking saga at MurdochsNews Corps UK newspaper unit.

    For a start, Murdoch remains a non-executive director of the UK broadcast-er; and of course News Corporationretains its 39 per cent shareholding inthe business. It would have mademore sense for Murdoch to make aclean break and for News Corp toappoint a different director in his

    EDITORSLETTER

    ALLISTER HEATH

    Murdoch and Hannams departures symbolise power shift

    WEDNESDAY 4 APRIL 2012

    place. It is obviously fair for NewsCorp to have board representation but it doesnt have to be via aMurdoch family member.

    Ultimately, News Corps large minor-ity shareholding is an unresolved andunsatisfactory state of affairs, and canonly end in one of two ways: a fulltakeover by News Corp at some pointin the future, perhaps following anexit from UK newspapers or RupertMurdochs retirement; or a gradualdivestment if the US giant gives up

    and decides to quit the UK TV market.Last but not least, BSkyB is still the

    target of an Ofcom inquiry intowhether or not it is fit and proper tocontinue to hold a media licence; inpractice this means that News Corpcould be forced to sell its shares in thebusiness if it is deemed that the

    phone hacking scandal in its UKtabloids has discredited the entireNew York based company. Regardlessof what one thinks of RupertMurdoch and his company, thiswould be a travesty. The law is wrongand must be changed: the govern-ment should focus on preventing andpunishing crimes and of coursesome were committed by the News ofthe World and elsewhere and shouldbe punished severely and not onjudging the merits or otherwise ofindividual owners and companies.There are plenty of rules on content,

    clear and simple; and it shouldnt beexcessively costly to appeal a decision.

    But yesterday was an important dayin the City: two men who undoubted-ly once thought they were untouch-able were brought down by regulatorsand politicians. It was of coursebecause of the Leveson inquiry and

    the House of Commons investigationsinto phone-hacking that Murdochdecided to step down; the end gameof that process for him and his familyremains impossible to predict.

    But one thing is clear: politics andthe state are reasserting themselves,as part of a complex chain of eventstriggered by political responses to theglobal recession. In that respect, theUK is becoming more like the US; weshould expect many more City scalps.

    which all broadcasters much follow,without needing arbitrary rules onownership.There was a certain symmetry

    between James Murdochs departurefrom the BSkyB chair and bankingsuper-star Ian Hannams resignationfrom JP Morgan Cazenove yesterday

    after he was told by the FSA to pay a450,000 fine for market abuse (he isappealing the decision). It is impor-tant that white collar rule-breaking bepenalised.

    But I also have some sympathy forthe view forcibly expressed on pageone by his friend David Davis, the ToryMP that the FSAs procedures can behighly questionable. Now that the reg-ulator has started to prosecute andfine a much larger number of people,the government needs to make surethat the principles of natural justiceare always respected. Rules should be

    Financial Services Authority.Laxey said: How our chairman in

    her second day in office can dismissout of hand an approach fromAberdeen shows how little thoughthas been given to serious legitimateconcerns over performance, ratingand costs.The dispute stems from Laxeys con-

    cern over the discount to net assetvalue (NAV) at which Alliancesshares trade. The spat goes back to2010, and last year Laxey was defeat-ed over its call for the Dundee firmto set up an automatic buyback poli-

    cy, which would have been triggeredwhen a discount of its shares to NAVwas more than 10 per cent.

    Since then Alliance has since spentsome 250m buying back 67.7mshares equating to more than 10per cent of its stock which has ledto a slight narrowing in the gap.Alliance said the combined cost of

    dealing with Laxeys resolutions willbe more than 2.5m although thehedge fund questioned the figure asextraordinary.Alliances shareholder meeting will

    take place on 27 April.

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    JAMES Murdochs departure from thetop job at BSkyB will have little effecton the broadcasters business, ana-lysts said yesterday.Jeremy Darroch, the chief executive,

    and Nicholas Ferguson, who hasstepped up to head the board, willprovide continuity so the strategy isunlikely to change.

    Murdoch will remain on the board,representing News Corporations 39per cent stake, but much of the politi-cal pressure has now been alleviated,Liberum analyst Ian Whittaker said.The City was stunned when BSkyB

    named Murdoch as chief executive in2003, putting its faith in a 30-year-oldwith a scratchy record in the musicindustry and the internet. He went onto prove wrong many of the doubters,although the police and parliamen-tary inquiries into phone hackingwhich dogged his final months aschairman threaten to overshadow hisachievements.

    The events at News Internationalwill be a stain on Murdochs career, aswill the failure of News Corps

    Sun setting onMurdochs time

    at family firmBY LAUREN DAVIDSON

    AND PETER EDWARDS

    takeover of BSkyB, which Jamespushed hard for, Peel Hunt analystPatrick Yau told City A.M.

    Given the amount of negative newsflow he was generating, he had to stepdown. But underlying trading at Skyhas been very strong over the last fewyears, and Murdoch was at the helmwhen that growth took place.

    BSkyB was transformed underMurdochs leadership and operatingprofit increased repeatedly. In 2010 itreached the milestone of 10m sub-scribers, which the broadcaster saidmeant it was used by 36 per cent ofhouseholds in Britain and Ireland.

    Murdoch also introduced new prod-ucts such as Sky+ and Sky HD, and

    presided over the transition to triple-play, offering broadband, phone andtelevision.The broadcaster also became a credi-

    ble rival to the BBC and, as Murdochgrew in confidence, he led a series ofattacks on the public broadcaster. Thisculminated in a diatribe against itschilling impact at the EdinburghInternational Television Festival in2009, which triggered a furious rowwith BBC business editor RobertPeston in front of other dinner guests.

    WEDNESDAY 4 APRIL 20123NEWS

    cityam.com

    These guys put the wild in wild west.

    John Zeman, 7 hours ago

    Stampede Grandstand | Western Canada

    www.keepexploring.ca/stampede

    Day 1 Day 2 Day 3 Day 4 Day 5

    2012 Google

    AS an art-loving City veteran who has held a series ofsenior positions in private equity, Nicholas Fergusonspedigree could not be more different to that of JamesMurdoch, the transatlantic former whiz kid.Ferguson (right) is, however, trusted by the Murdochfamily and that partly explains why he has beenelevated at Sky. He has been on the board of thebroadcaster since 2004 and was seen as de facto

    chairman during last years failed takeover talks withNews Corporation but has spent much of his careerin the buyout sector. Last month he signalled changecould be afoot when he said he would leave privateequity house SVG Capital after 28 years. He may bebest-known for his 2007 remark that some buyoutexecutives pay less tax than a cleaning lady butnow, a higher profile awaits. (Peter Edwards)

    PROFILE: NICHOLAS FERGUSON MOVES TO THE HOT SEAT

    2000 2001 2003 2005 2007 2009 20112002 2004 2006 2008 2010 2012

    2,000

    1,500

    1,000

    500

    JAMES SWITCHES OFF AFTER A DECADE OF MILESTONES

    September 2001Sky+ launches

    February 2003 James

    Murdoch joins as a director

    7m

    October 2003Passes the mile-stone of 7mcustomers in theUK and Ireland

    March 2000 Sky News24-hour interactive service

    launches

    8mNovember2003James

    Murdoch

    becomes chief

    executive

    May 2006Launches Sky+HD and

    Broadbandservice

    9mNovember 2008Passes 9m customers

    10m

    December 2005Passes 8m customers

    December 2007 James Murdochsteps down as chief executive and isappointed non-executive chairman

    Nov 2010Customernumbers top 10m

    February 2012James Murdochsteps down as execchairman of NewsCorps newspaperarm

    Yesterday Murdochquits as BSkyB chairman

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    Hannam on a tripto Afghanistan

    The Financial Services Authority, long criticised for being impotent at policing insidertrading in shares, has recently imposed penalties on four more individuals in relation totheir conduct in disclosing inside or confidential information.In January 2012 US hedge fund manager David Einhorn of Greenlight Capital was fined3.6m and BAMLs Andrew Osborne was fined 350,000 for market abuse.Greenlights Alexander Ten-Holter was fined 130,000 for breaching two of theregulators principles. All three penalties arose out of events leading up to a fund-raising for Punch Taverns.In a separate matter, Nicholas Kyprios of Credit Suisse was fined 210,000 last month.

    ONE of the Citys most senior rain-makers was taken out by the FSA yes-terday, as JP Morgan Cazenoves IanHannam was fined for marketabuse and quit his job to appeal thedecision.

    The FSA said thatalthough Hannam didnot set out to commitmarket abuse and notrading had taken placeas a result of hisactions, Hannams fail-ings were serious in viewof his experience and

    senior position with-in JP Morgan.

    He was foundto have leakedinformationa b o u tH e r i t a g eOil to aprospec-t i v eclientinter-estedin ap os s i -ble bidfor thecompany.In two emailssent in 2008,

    Top rainmakerhit by fine for

    market abuseBY JULIET SAMUEL the FSA said that Hannam had told

    the potential client, an investor inKurdish oil ventures, that Heritagewas in exploratory talks with a bidderand, a month later, that it had struckoil.

    The first email, sent in September2008, said: I thought I would updateyou on discussions that have beengoing on with a potential acquirer ofTony Buckinghams business

    [Heritage Oil]... believe that the offerwill come in in the current difficultmarket conditions at 3.50-4.00 pershare.

    The second, sent a month later,said: PS Tony has just found

    oil and it is looking good.The regulator saidthat the recipient of

    the emails mighthave known

    some of theinformationalready andthat there wasno evidencethat tradinghad resultedfrom theemails, butthat the disclo-sures were a

    WEDNESDAY 4 APRIL 20124 NEWS cityam.com

    PROFILE: IAN HANNAMEVER since Andrew Osborne quit Bank ofAmerica Merrill Lynch after being fined for a

    market abuse case in December, there have beenrumours that Ian Hannam, one of the Citys topdeal-makers, was being scrutinised by the FinancialServices Authority.Nevertheless when Xstrata announced its proposed56bn merger with rival Glencore in February,Hannams name was one of the first on the list ofadvisers.Like Osborne, life remained as hectic as ever for

    Hannam even while the regulators continued theirinvestigations, trawling through more than 20,000emails in an attempt to find a smoking gun.One of Hannams closest contacts is Xstratas chiefexecutive Mick Davis, who yesterday came out insupport of his favourite banker despite the FSAsdecision to fine him 450,000 for disclosing insideinformation while advising another client, HeritageOil.Hannams other clients include Nat Rothschildsresource vehicle Vallares, HSBC, Land Securities,

    Vedanta and African Barrick. He has alsoparticipated in fund-raisings for 3i and SAB Miller a record that shows he is one of the most dealhungry bankers the City has ever seen.He was raised in a working-class neighbourhood insouth London, the son of a council worker. He laterjoined the Territorial Special Air Service at age 17.He decided to go to London Business School beforejoining Salomon Bros, where he worked on the IPOof the late Robert Maxwells flotation of MirrorGroup newspapers.

    He was an a mazing salesman, said one banker,who remembers him from that time. He wasalways speaking on about three phones at the sametime.He later applied, unsuccessfully, for the top job atJP Morgan in London in 2008 a nd when it went toan outsider he is said to have taken himself off for amonth or so to contemplate his future.He returned to be as busy as ever. Now, friends say,he is focused on clearing his name.

    David Hellier

    QJP Morgan Cazenovebanker Ian Hannam has

    decided to appeal theFSAs decision. Whathappens now?

    A

    The case will progress

    to an independent tribunaloutside the FSAs jurisdiction. It willtake around a year for the trial to beconvened, during which timelawyers on both sides will compiletheir cases. After that it could takeup to six months for the trial toreach a conclusion.

    QWhat is the likelihood Hannam could becleared?

    AIt is unlikely he would appeal iflawyers had advised that he has

    no chance, but statistically, just tenper cent of appeals succeed.

    QBut if he is cleared, its all back to normal,right?

    AThis is a point of controversy. Intheory, yes, but critics of the FSA

    progress argue that new rules meana bankers reputation can be ruinedeven if they are eventually cleared.At issue is its publication of thedecision notice its decision tofine Hannam. Before 2010, thiswould not have been published untilany appeal had reached itsconclusion, but due to atransparency push, the notice is nowpublished once the FSA has reachedits decision.

    QDid Hannam have to quit his bankingjob?

    AIn theory, no. But lawyers saymounting a tribunal appeal is

    incompatible with a full-time job and costs hundreds of thousands ofpounds.

    What now for IanHannams appeal?

    A RAMPANT FSA COMES UP WITH SOME BIGSCALPS IN ITS ATTACK ON MARKET ABUSE

    serious breach of the rules.Hannam, a former SAS soldier,

    denies market abuse and is appealingthe decision in the Upper Tribunal, anindependent judiciary body. He is like-ly to make the case that the FSAs defi-nition of market abuse is too broadand the information disclosed not spe-cific enough to constitute a breach.

    Despite the appeal, he resigned as JPMorgan Cazenoves chairman of equi-ty capital markets because he said thatthe fight to clear his name would be adistraction for colleagues.

    Lawyers said the approach taken bythe watchdog is a significant rampingup of its stance on wall-crossing becoming an insider who is privy to

    sensitive information about a compa-ny.

    The case extends the definition ofmarket abuse so that it includesmerely the sharing of information,rather than a tangible market effectresulting from any disclosures.

    The FSAs acting director of enforce-ment Tracey McDermott said: Insideinformation is extremely valuable andmust be handled with care to ensurethat it is properly controlled.

    Despite resigning, Hannam willcontinue to advise on some majortransactions for his closest clients,such as miner Xstratas proposedmerger with commodities giantGlencore.

    Bank of America Merrill Lynchs AndrewOsborne was fined 350,000

    US hedge fund manager David Einhornwas fined for trading in Punch Taverns

    QAand

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    THE US regulator has increased a finelevied on a British hedge fund and its

    boss to nearly $98.6m (61.99m).Lewis Chester and his firm,

    Pentagon Capital Management,must pay the huge penalty after theSecurities and ExchangeCommission said they engaged inabusive mutual fund trading.

    Chester, a Conservative Party

    donor, and Pentagon were lastmonth told to pay $76.8m after a

    BY PETER EDWARDSlong-running probe into impropertrading in mutual fund shares

    between 1999 and 2003.Seven weeks ago a New York

    judge said Chester and Pentagonhad intentionally and egregiously

    violated federal securities laws byengaging in late trading, ormaking mutual fund trades afterthe market closed, but at staleprices. London-based Chester, 43,

    who was a contemporary of David

    Cameron at Oxford University, isexpected to appeal the case.

    6 NEWS cityam.com

    PRET A MANGER is to create 550 jobsin Britain and step up its expansionplans abroad after it unveiled soaringrevenue and earnings growth in 2011.

    Chief executive Clive Schlee said thesandwich chain plans to invest heav-ily in future growth with at least 44shop openings this year, of which 24

    will open in the UK.Over half will open around trans-

    port hubs in London and in towns inthe south east of England, Schlee said.The sandwich maker hopes to lure

    school leavers to work for the groupby reaching out to the careers depart-ment of every school in the countryin a bid to encourage more Britishapplicants.The fast food industry came under

    fire from employment minister Chris

    Grayling last year for not doingenough to attract British workers intimes of high unemployment.

    The British have traditionally notapplied to the fast food business. Idont think they have valued or

    BY KASMIRA JEFFORD understood the careers there enough,Schlee told City A.M.

    We will try and tell them that theycould be running a big business inthree or four years its very goodtraining, he added.

    Schlee was speaking as the groupunveiled a 15 per cent rise in sales to377.3m with the group making earn-ings before interest, tax, depreciationand amortisation of 52.4m, up by 14per cent on 2010.The chain majority owned by the

    private equity firm Bridgepoint has294 shops in Britain, the US, HongKong and recently opened two in Paris.

    Schlee said Prets shops in the Frenchcapital were trading well, with salesup around 15 per cent on UK stores.

    Parisians are buying more pud-dings and fewer crisps than theirLondon counterparts and they are

    very fond of our British carrot cakeand home baked cookies, he said.Pret this year plans to open two more

    shops in Paris, two in Hong Kong and14 more in the US, including its maid-en store in Boston.

    Sandwich chain plans record number of shop openings

    550Creating

    newjobsintheUK

    44newshopopeningsplannedfor2012

    NEW SHOP OPENINGS PLANNED FOR 2012- 24 in the UK

    - 20 overseas including two more in Parisand first store in Boston

    15%Sales up

    to 377.3m

    Pret A Mangersets its sightson expansion

    Hedge fund fine raised to $99m

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    CHRIS ROGERS, who was named as Costasincoming managing director yesterday, joinedthe leisure group in 2005 after a stellar 17-year career in the retail sector.Rogers qualified as a chartered accountantwith PwC and joined DIY firm Kingfisher in1988 as a corporate finance manager, spend-ing a total of 13 years at the company in vari-ous senior product marketing, commercialand finance roles.In 1993 he was appointed as finance director

    and eventually became commercial directorat Kingfishers subsidiary Comet, the troubledelectricals chain, which was sold last monthby its parent Kesa to private investment firmOpCapita.Rogers was also finance director at the nowdefunct store chain Woolworths after its wasspun out of Kingfisher in 2001, where he wasalso chairman of Woolworths entertainmentand wholesale publishing businesses.

    Andy Harrison, Whitbreads chief executive,said yesterday that Rogers played a majorpart in Whitbread's strategic developmentand as a long standing member of the Costamanagement board, understands the vitalbrand and cultural DNA which has driven itssuccess.Rogers was also hotly tipped as one of thefrontrunning internal candidates likely to suc-ceed former chief executive Alan Parker in2010 yet he lost out to Harrison, the former

    boss of EasyJet. Analysts, however, stillbelieve he could one day preside over anindependent Costa, if Whitbread chooses todemerge the fast-growing business.Commenting on his new role Rogers said:"This is a great opportunity to head up afantastic business. Costa has a strong andexperienced team leading its four divisions,all of which have exciting profitable growthpotential".

    Analysts are fore-casting a 26 percent rise in rev-enues at Costafor the year toFebruary, afterfourth quarter sales

    jumped by 6.2 percent.

    WHITBREAD revealed yesterday thatits finance chief Chris Rogers is tohead up its coffee shop chain CostaCoffee, with the task of drivingambitious overseas expansion plans.The UKs largest hotel and restau-

    rant owner said Rogers will becomemanaging director of Costa inAugust and drive forward a five yearplan to expand it to 3,500 storesworldwide.

    He will replace John Derkach, whois leaving after 17 years to becomechief executive of Tragus, the ownerof UK restaurant chains including

    Strada and Caf Rouge.Costa is already Britains biggest

    coffee shop brand with almost 1,400shops and has a further 800 units in25 overseas markets, includingChina and India.The appointment of Rogers, who

    has been Whitbreads finance direc-tor for the past seven years, is likelyto heighten talk that Costa couldeventually be demerged.

    Whitbreadsfinance chief to

    head up CostaBY KASMIRA JEFFORD Some analysts have suggested Costa

    could be spun out of Whitbread tocreate value for shareholders as it hasfew synergies with the groups othermajor business, Premier Inn.Whitbreads chief executive Andy

    Harrison said there was no hiddenagenda behind the managementchange and reaffirmed his view thatCostas future lay within Whitbread.However, he declined to rule out ademerger at some stage in thefuture.

    Shares in the company closed up 4pat 1,870p last night.

    Whitbread PLC

    1,870.003 Apr

    29 Mar28 Mar 30 Mar 2 Apr 3 Apr

    1,900

    1,880

    1,840

    1,860

    1,820

    p

    SPORTSWEAR retailer JJB Sports,which nearly collapsed last year,said yesterday it was in ongoingtalks with its bank and a mysterypotential strategic partner toraise financing, sending its sharesup 56 per cent to 16p.

    Constructive discussionscontinue with the companyslending bank and one of thepotential strategic partners andhave been widened to includeother key stakeholders, JJB said ina statement.

    Shares in sports store JJB riseas it confirms refinancing talks

    BY HARRY BANKS A rent restructuring agreementwith its landlords prevented JJBSports from falling intoadministration a year ago. Recenttrading updates have been morepositive as JJB has worked to turnaround the business ahead of abusy summer of sport.

    JJB refused to name its possiblepartner yesterday. In a separatestatement, JJBs larger rival SportsDirect, controlled by NewcastleUnited owner Mike Ashley, saidthat it had held no talks with JJB,as a strategic partner orotherwise.

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    BRITAINS banks are at odds over howto tackle a harsh new crackdown onbonuses proposed by MEPs, with tax-payer-owned RBS most keen to take astrong stance against the bonus curbs.

    It is understood that RBS has madethe case for intervening promptly tohead off an amendment tabled byAustrian MEP Othmar Karas. The pro-posal would limit the pay of those atthe top to a maximum of 30 timesthat of pay at the bottom and wouldrequire bonuses to be worth no morethan twice basic salary.

    Although banks expect the finalamendment to drop the high to lowpay ratio, they still view the 200 percent proposal with horror. A privatebriefing paper shared by banks says itwould leave us in an extremelyuncompetitive position [and] is likelyto lead to an increase in fixed com-pensation. It adds: We stronglyoppose this proposal [for a bonus-salary ratio limit] in any format.

    Despite being 83 per cent publicly

    RBS takes hard

    line on new EUbonus attack

    owned, RBS has sided with thestronger stance taken by Americaninvestment banks, saying that Britishbanks should engage swiftly to explainto lawmakers why such a proposalwould wreck their businesses.

    HSBC and Standard Chartered, bycontrast, believe it is wiser to take asofter approach and wait. One bank-ing source said of the US banksaggression: They could well make itworse.

    Meanwhile, City A.M. understandsthat the Treasury is dismissive of thethreat, believing the MEPs bonusamendment will be dropped. It is con-centrating instead on the details thecapital and liquidity rules.

    Banks are also fretting over MEPssuggestion that they publish the jobdescription of everyone whose pay isover 1m, saying this will not be ananonymous disclosure if this level ofdetail is provided.

    Among the other proposals is a planto limit pay to three times the salary ofmember states head of government,which banks say has no logical basis.

    The banks declined to comment.

    Baker & McKenzies London office is headed up by managing partner Gary Senior

    WEDNESDAY 4 APRIL 20129NEWScityam.com

    BRITAIN must sell its Royal Bankof Scotland and Lloyds stakes assoon as possible because keepingthem is allowing politicians to

    gamble with peoples money onbank shares, according to a lobbygroup representing taxpayers.

    Clearly the best outcome fortaxpayers would be if we don'tmake a loss on those shares, but

    we simply cannot predict what theshare price will be tomorrow,TaxPayers Alliance campaigndirector Emma Boon said..

    Politicians shouldnt play thestock market with other peoplesmoney, imagining that they might

    get a better or worse price if theybuy or sell today or tomorrow.

    BY HARRY BANKS

    OPERATING profit at City law firmBaker & McKenzies London arm

    fell by eight per cent in 2011despite an increase in turnover.The firms LLP accounts, filed at

    Companies House last week, showthat operating profit at the firmdropped to 41.7m in the year to 30June 2011 from 45.4m theprevious year, while Londonrevenues increased from 119m to122m.

    Bakers posted a global rise inboth gross revenues and profits of

    Baker & McKenzies London armsees profits fall by eight per cent

    BY ELIZABETH FOURNIERseven per cent for the 2012-11 yearlast August the f irst time thatboth figures had increased since

    2008.The latest accounts show thatemployee costs for the year rose to45.9m from 44.4m last year anincrease of almost four per cent while overall headcount nudged upfrom 592 to 600.

    Of the overall figure, 39.5m wasattributed to wages, while 276,000went on redundancy costs.

    Over the whole year, the averagenumber of partners sharing the

    firms equity pot was 80 up froman average of 78 last year.

    The highest-earning partner in

    London made 872,000, a 15 percent fall from 2010 when thefigure was just over 1m.

    Bakers London office is itslargest worldwide, and employsaround 10 per cent of the firmstotal workforce.

    Last week, the group opened itsnew office in Turkey, as part of anexclusive alliance with localTurkish law firm Esin AttorneyPartnership.

    UK should sell

    off bank stakes

    EXCLUSIVE

    BY JULIET SAMUEL

    THE EU ignored the advice ofregulator ESMA in around 40areas in drawing up acontroversial new hedge funddirective, industry insiders saidlast night.

    Hedge fund and private equitybosses are angry over the draft ofthe Alternative Investment FundManager (AIFM) directive and

    want to see it redrafted. They alsowant the EU to explain why itdeparted from the regulatorsadvice. Managers are particularlyconcerned over the protectionistimplications of the thirdcountries section of the rules,

    which would stop EU investorsputting money into non-EU funds.

    BY PETER EDWARDS

    Fears over EU

    hedgie rules

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    FOOD price inflation started risingagain in March after five months offalls, according to data publishedtoday, as increased oil and fuel costspushed up transport expenses.

    However, non-food prices were lowerthan in the same month of 2011, asweak consumer demand forced firmsto cut prices to battle for attention onthe high street.

    Shop prices rose 1.5 per cent in theyear to March, up from 1.2 per cent inFebruary, according to the BritishRetail Consortiums shop price index .The rise was led by food prices,

    which rose 5.4 per cent on the year,up from 4.2 per cent in the year toFebruary.

    The cost of oil has shot up elevenper cent since the start of the year andthat has driven up transport andmanufacturing costs, increasing foodinflation, said BRC boss StephenRobertson.

    However, he insisted shops are try-ing to reduce costs, claiming retail-ers are shifting away from multi-buyreductions on specific items in favourof money-off coupons for an entireshop, giving customers more flexibili-ty and producing savings on foodshopping which dont show up in this

    index.Non-food prices fell at their fastestpace for 28 months, falling 0.9 percent compared with March 2011 asteeper fall than the 0.7 per cent themonth before.

    Clothing and footwear led the

    Consumers hit

    as oil inflatesUK food prices

    BY TIM WALLACE decline, falling 1.5 per cent on themonth the fastest fall since June2009 and taking the annual decline to6.5 per cent.

    Falling cotton values pushed pricesdown, the BRC reported the com-modity is down 55 per cent on the year though widespread discounting alsohelped consumers.

    Electricals closely followed, withprices down 4.7 per cent on the year,while health and beauty prices fell 0.4per cent on the month.

    Despite those declines, consumersremain hard-pressed, and spending isunder pressure.

    Consumers are having to cope withfalling disposable incomes with fueland household energy costs alsoincreasing since the start of the year,said Nielsens Mike Watkins.

    With inflationary pressure continu-ing in the food supply chain we canexpect supermarkets to keep a strongfocus on promotional activity over thenext few months. Shoppers are follow-ing the deals and will continue to seekout the best value for money.

    Greggs has a chance to profit from the coalitions pasty problems

    MOST of the time, our datashows that events in thepolitical world have littleimpact on the publics view

    of brands. Sometimes, however,they intertwine in unexpectedways.

    For example, towards the end of

    last year we saw Herman Cainscandidacy for the Republican nom-ination for US President changeperceptions of Godfathers Pizza,the company he ran fifteen yearsearlier.As allegations of impropriety hit

    Cain, there was a significant devia-tion in BrandIndex Index scoresbetween Republicans andDemocrats.

    Republicans views of GodfathersPizza were unchanged, butDemocrats became significantlymore negative towards the brand.

    Similarly, over the last two weeks,we have s een a UK political storyaffecting a major brand.The addition of VAT to hot food

    like pasties (where the VAT applies

    to the product if sold hot but not ifsold cold) has caused plenty of con-troversy since the Budget.

    For example, a YouGov poll forthe Sunday Times last weekendrevealed that 69 per cent of thepublic opposed the plannedchanges to the VAT levy.

    In terms of big names, the brandmost often mentioned in relation-ship to Pastygate has beenGreggs, the bakery chain.As you would expect, such contro-

    versial publicity has led to anincrease in people hearing newsabout Greggs hence theBrandIndex attention score risingfrom 24 the day before the Budgetto 31 earlier this week.

    The relationship between buzzand index is interesting to note inthis instance, with buzz havingfallen slightly from +13 to +8,while the index score (a compositeof the six key BrandIndex imagemeasures) has gone in the oppositedirection, from +14 to +17.

    This is an unusual phenomenon,but it makes perfect sense:although people are hearing badnews about Greggs (due to poten-tial price increases), they pin theblame on politicians rather thanthe bakers and perception of thebrand has actually improved overthe last week.A key question for Greggs will be

    how long this positive impact lasts,

    and where perception heads oncethe VAT becomes a reality andpasty prices rise for real in theautumn.Stephan Shakespeare is the chief executiveof YouGov

    BRANDINDEX

    STEPHAN SHAKESPEARE

    Non-food prices fell in the year to March

    Mar 0 9 S ep 0 9 M ar 10 Sep 1 0 M ar 11 Sep 11 M ar 12

    10

    8

    6

    4

    2

    0

    -2

    %

    %c

    hangeyear-on-

    year

    Food price inflationNon-food price inflationTotal shop price inflation

    Greggs buzz and index

    Index

    Buzz

    19 Mar 21 Mar 24 Mar 27 Mar 30 Mar 2 Apr

    2018

    16

    14

    12

    10

    8

    6

    4

    2

    0

    p

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    12 NEWSWEDNESDAY 4 APRIL 2012

    Rift in a lift as Boris swears atKen over tax avoidance claim

    BORIS Johnson yesterday calledKen Livingstone a f***ing liar inthe aftermath of a bruisingdebate that touched onJohnsons personal income taxstatus.

    The current Mayor of Londoncame nose to nose in a liftwith his Labour opponent afterLivingstone, who has beendogged by accusations of taxavoidance on personal income,claimed that his opponent had asimilar arrangement.

    The simple fact is that Borisand myself are in exactly thesame position. We both hadmedia earnings. We both put

    them through a company. Youhave to pay on the money that

    you take out, he said.The brief altercation was

    witnessed by Brian Paddick, theLib Dem candidate, Green JennyJones and a LBC executive.

    Johnson reportedly lost hiscool, telling Livingstone that itsall f***ing lies, its all f***inglies.

    Earlier he said: I pay incometax, Im proud of it. Its pretty

    disgraceful to be attacked by KenLivingstone, someone whodeliberately set up a tax dodgingmanoeuvre and then denouncedeveryone else who did so.

    A spokesperson for KenLivingstone said: Boris Johnsonlost his temper because he lostthe debate he talked about

    cable cars not cutting fares andthe squeeze on Londoners.

    HUNDREDS of economists took upthe challenge issued by LordWolfson last year to come up witha practical plan for a country toleave the Eurozone, minimising thepain for it and the remaining mem-bers.

    Five of those entries have madethe short-list, which wasannounced yesterday, and, follow-ing further revisions on the guid-ance of the judging committee, oneor two will win the grand prize 250,000, to be announced in July.A series of specific problems with

    the Eurozones current setup andpotential break-up were identifiedby the entrants. Among the mostprominent, a lack of competitive-ness in the peripheral economies;political opposition to fiscal trans-fers; and the lack of a mechanismfor determining contract arrange-ments if a country leaves the euro.

    Market tensions in the Eurozonehave slackened since the prize wasfirst announced in October, largelybecause the European Central Bankpumped over1 trillion (835bn) in

    BY TIM WALLACE

    Sadly, the risk of a country leav-ing the Eurozone has not goneaway, said prize sponsor and Nextchief executive Lord Wolfson.

    The ideas contained in theseentries are an invaluable contribu-tion to tackling this importantissue. I am incredibly grateful toeveryone who made a submissionand look forward to awarding the

    cheap cash into Europes financialinstitutions in December andFebruary, and because Greece wasbailed out for a second time.

    However, the shortlisted econo-mists believe this is largely a tempo-rary fix, amounting to a liquidityboost which does not solve theunderlying issues like the lack ofcompetitiveness in the periphery.

    Wolfson prize:Top euro exitplans chosen

    JENS NORDVIGNomura SecuritiesJens and his colleague Nick Firoozye argue the treatment offoreign law debt contracts is of crucial importance becausethere is around 10 trillion outstanding. Their essay says debtcontracts falling under national or local law should beredenominated into a new currency, while debt contractsfalling under foreign law should be redenominated into a newEuropean Currency Unit. He thinks an open discussion of the

    process will calm, rather than panic, markets knowingnothing about what happens to assets after a break-up isoften worse than not talking about it, he told City A.M.

    WOLFSON PRIZE: THE SHORTLIST

    NEIL RECORDRecord Currency ManagementFormer Bank of England economist Neil Record argues that ifany country leaves the euro, the entire euro must bedissolved. He writes that the moment one country leaves theeuro, the view that the currency union is permanentbecomes untenable, giving markets the ammunition toundermine structural weaknesses elsewhere. Records focus isadministrative, and he advocates the establishment of a secretFranco-German committee which would set out a detailedweek-by-week timetable for the break-up, including thereturn of powers to national central banks.

    BY JAMES

    WATERSON

    MAYORAL

    ELECTION

    GETTY

    Boris Johnson and Ken Livingstone had a heated exchange in a lift yesterday

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    WEDNESDAY 4 APRIL 201213NEWScityam.com

    THE GOVERNMENT has pledged1bn of public funding towardsits latest attempts to kick-startthe fledgling carbon capture andstorage (CCS) industry.

    Energy secretary Ed Davey

    yesterday invited companies topitch designs for safely storingemissions from fossil fuel powerstations, with an initial 1bncapital funding and 125m inresearch cash up for grabs.

    He said the technology couldbe worth 6.5bn to the UKeconomy in the next decade.

    The government abandoned its

    Firms offered 1bn for new carbon projectsBY MARION DAKERS

    prize this summer.The short-list was made up

    of economics consultants,authors, investors and ana-lysts, who grappled withthe complex tangle of legal,economic and politicalissues at hand.

    Each of those will receivea 10,000 prize formaking it thisfar, whilef o u re n t r a n t s

    CATHERINE DOBBSPrivate investorFormer NatWest and Gartmore analyst Catherine Dobbsproposes the creation of new currencies, with each countryallocated balances based on the stock of money held in eachof the countries in the new currency areas. She hopes thescheme would disincentivise capital flight and reducedefaults. Indeed, if the plan was a dopted she believes it wouldreduce capital flight, increasing the Eurozones stability and so

    making a break-up less likely. Her aim to reverse the processby which the Eurozone was created was praised as original,insightful, elegant and persuasive by the judging panel.

    ROGER BOOTLECapital EconomicsRoger Bootle and his team focused on competitiveness, whichhe believes is the main problem debt and deficits are justthe symptoms. Their focus is how to achieve a fall in realwages and prices with the minimum disruption. They proposegovernment and consumer debt be redenominated deployingthe lex monetae principle in other words, that eachcountry determines the currency applicable under its laws.However, it proposes leaving corporate contracts to bedetermined by courts (in a few cases contracts will beinterpreted in terms of national currency; in most in the euro).

    JONATHAN TEPPERVariant PerceptionAuthor, research group editor and hedge fund portfoliomanager Jonathan Tepper contends that currency exits anddevaluations are often expected to lead to Armageddon butrarely do. Looking to other examples of countries leavingcurrency unions in the past, he argues it should not be toodifficult for a country to exit the Eurozone over a weekend,perhaps with a few extra bank holidays. His paper argues thatthe real issues are not created by the exit process itself, but bythe needs that motivate the exit the need for Eurozoneperiphery countries to default and devalue.

    cial mention to the competitionsyoungest entrant.

    Ten-year old schoolboy JurreHermans recommended Greeceleave the Eurozone and use thedrachma once more. To preventcapital flight, Hermans recom-mends that any Greek trying tomove cash out of the country orfailing to exchange euros shouldface a fine just as high or doublethe whole amount in euros he triedto hide. He was given a 100 giftvoucher for his entry.

    who just missed out will receive1,000 each.

    They are Arnab Das fromRoubini Global Economics,Charles Dumas from LombardStreet Research, Julian Le

    Grand from the LSE, and invest-ment banker Michael Redican.The judging panel, made up of

    economics professors and politi-cal advisors, also gave a spe-

    Lord Wolfson put upthe 250,000 prize

    first plans for a CCS competitionin October after Scottish Powerpulled out in a disagreementover spiraling costs.

    One of the criticisms of theprevious competition was that

    we weren't flexible enough, andso what this one is really about is

    listening to the industry more,being a bit more flexible andlooking at whats actually goingto work, said a DECCspokesman.

    Companies have until 3 July tosubmit applications for the latestscheme, which if successful willallow the UK to continue usingfossil fuels to generate electricity

    while keeping up withinternational emissions targets.

    The stations are not expectedto be up and running until atleast 2016.

    Firms will also be eligible forfurther support through aminimum electricity price to be

    awarded to projects throughcontracts for difference.The Institute of Directors

    welcomed the new competition,but added: [W]e still dont knowif CCS is commercially viable.The government is right to bepressing ahead, but businessesneed to see a fallback plan if CCSeventually proves unworkable.

    THE CHAIRMAN of NYSEEuronexts futures unit Liffe,Hugh Freedberg, is to step downnext month to be replaced by Liffedirector Alan Whiting.

    NYSE Euronext, which twomonths ago was forced to drop its

    New chairman for NYSE Euronexts Liffe armBY HARRY BANKS $7.4bn merger with Deutsche

    Boerse, said yesterday thatFreedberg, who became Liffechairman in 2009, would stepdown on 1 May this year.

    Freedberg, who was the chiefexecutive of Liffe from 1998 to

    2009, will be replaced by Whiting,a Liffe board member since 2006

    and a futures veteran who hasworked with the Britain's financeministry, the London MetalExchange, part of the CME Group,and US exchange NYMEX.

    I am greatly looking forward tothe challenge of leading the board

    ... during a period of major changeand opportunity, Whiting said.

    THE FORUM: Page 26

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    LONDON Stock Exchange (LSE) bossXavier Rolet passed a crucial test ofhis leadership yesterday when his

    shareholders backed the takeover ofclearing house LCH.Clearnet, hisfirst major deal.

    LSE and LCH.Clearnetshareholders voted overwhelminglyto ratify Rolets plan to take up to 60per cent of the clearing operatorwith an offer of20 per share,which values LCH.Clearnet at813m (510.8m).

    Over 99.9 per cent of LSEshareholders backed the LCH dealat an extraordinary generalmeeting yesterday while 94.3 percent of LCH shareholders gave theirapproval at a separate EGM.

    The support leaves the dealneeding only regulatory andcompetition authority clearancebefore it can be completed,something the partners plan to doin the fourth quarter of this year.

    The deal is seen as crucial forRolet after his attempt to scoop upCanadian exchange TMX fellthrough last year after the targetsshareholders opposed the deal.

    LCH is also vital for the LSE as theAnglo-French clearing house willboost its clearing revenue overnightand position the LSE to profit fromregulatory changes in the fast-growing market forover-the-counter (OTC) derivatives.

    Clearing houses work to cut therisk of trading on exchanges byguaranteeing each side of thetransaction, minimising losses formembers if a counterparty goesbust.

    LSEs Roletpasses key LCHtakeover test

    BY HARRY BANKS

    G E T T Y

    THE PAST few months have been pret-ty unhappy ones for shareholders inOmega Insurance.

    Having spurned a takeoverapproach from rival Canopius,Omegas board then entered into dis-cussions with insurance entrepre-neur Mark Byrne. These were in thehope of cementing a deal in which hewould take a minority stake and also(mysteriously) seize control.

    For reasons best known to himself,Byrne failed to consummate a deal,leaving Omegas board and share-holders suitorless and somewhat sad.Yesterday, just as many in the City

    were beginning to give up on Omegaattracting any other suitor after itscoy behaviour, Canopius returned fora second attempt.

    Of course 65p a share is disappoint-ing given that Canopius previousattempt was pitched at 83p, but thistime around it is time for a morefriendly conversation.

    Much will depend on the view ofNeil Woodford, whose funds hold anear 30 per cent shareholding.

    Last time Woodford somewhatbizarrely sided with the Byrne count-er-offer but like everybody else waslet down by Byrne not comingthrough on his deal.

    Since then Omega has reportedheavy losses and analysts such as PeelHunt have reduced 2012 forecaststoo.

    Peel Hunt recently reduced its tar-get price from 52p to 47p to reflectthe deteriorating circumstances.

    In such circumstances, and with arecent history of procrastination, theOmega board and its advisers mustfirmly focus on finalising a deal.

    BOTTOM

    LINEDAVID HELLIER

    WEDNESDAY 4 APRIL 201214 NEWS

    cityam.com

    Its time tobring a sorrysaga to a close

    SIGMA Capital, the investment firmbacked by billionaire Scottishentrepreneur Sir Tom Hunter,narrowed its losses last year afterbuying an urban regeneration firm.

    Sigma cut its pre-tax loss by 60 percent to 1.42m after making a seriesof changes in 2011 and said itexpects to benefit from potentially

    lucrative partnerships withLiverpool, Salford and Solihull

    Sigma turnaround continues as it cuts lossesBY PETER EDWARDS councils this year.

    David Sigsworth, chairman ofSigma, said: Our three councilpartnerships, which hold potentialdevelopment opportunities worthover 2bn in total, together with ourinvolvement with the WinchburghDevelopment [in West Lothian, nearEdinburgh], one of the UKs singlelargest residential and mixed usedevelopments with planning, worth

    an approximate 1bn, provide uswith a significant opportunity to

    build revenues and profit.Sigma, in which Hunter has a 22

    per cent stake, posted a 34 per centrise in revenue from services lastyear to 2.47m. In August it boughtInpartnership, now known as SigmaInpartnership.

    Retail tycoon and philanthropistHunter has built a fortune throughhis West Coast Capital vehicle. Hehas had interests in several high

    street names such as Office andUSC. Sir Tom Hunter is a major shareholder in Edinburgh-based Sigma Capital

    holders will be consulted on the offer.Market sources said the offer was a

    substantial premium to the undis-turbed share price.

    Shareholders are pretty fed up withOmega. Their thinking is probablythat [the new offer] isnt as good as 73p

    but that if we hang around then wemight get even less this company haslost money and says it is going to losemore in the future, the source said.

    Shares in the firm closed down 1.2per cent at 62p. The thinly traded

    stock had climbed more than 25 percent since mid-March on renewedtakeover speculation but remains farbelow a 2008 peak of 172p.

    There can be no certainty that a for-mal offer from Canopius will be forth-coming on these or other terms,

    Omega said in a statement.Last month the firm was forced tocancel its dividend after pre-tax lossesdoubled to $94.7m (60m) in 2011, upfrom $42.9m the year before.

    Small Lloyds of London players are

    seen as vulnerable to takeoversbecause persistently weak insuranceprices have weighed on their shares,with proposed tighter capital require-ments for European insurers addingfurther pressure. The industry had atroubled 2011 but Omegas results

    were worse than most of its rivals.The firm is one of the smallest opera-tors on the market and barely surviveda troubled 2010 during which almostits entire board were replaced as partof a bloody boardroom battle.Omega chief exec Richard Pexton

    LLOYDS of London insurer Omega yes-terday announced that is has receiveda potential offer for the firm from arival that made a far more generousbid at the end of last year.

    Fellow Lloyds firm Canopius hasmade an offer of 65p per share in cashfor the company, well below the 83pper share offer that it made lastSeptember. The new proposal valuesOmega at around 160m and share-

    Canopius eyes Omega takeoverBY JAMES WATERSON

    LSE chiefexecutiveXavier Rolet

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    Got A Story? Email [email protected]

    15

    THECAPITALISTcityam.com/the-capitalist

    Charity Epic Arts has created a play put on by disabled children and sponsored by BAML

    BANK of America Merrill Lynchfeared a mass exodus of staff.Or so the co-founder of EpicArts, a charity which runs

    theatre workshops for youngsterswith physical and learningdisabilities, has heard.

    Rachel Duncomb-Anderson told TheCapitalist some of the banks staffwho have been volunteering withthe charity secretly confessed theyenjoyed it so much that they wouldlike to give up their day jobs.

    We had loads of volunteers gettinginvolved, she said. Apparently wecaused quite a stir.The charity, now in its eleventh

    year, has been putting together a the-atre production over the past year,choreographed and performed byover 130 disabled and non-disabledpupils from 12 schools acrossLondon.The play, called Exhale, is being

    sponsored by BAML, which has also

    been encouraging its staff includingthose without any artistic inkling toget involved with the play.

    It was the dream performance wehad been hoping to do. To have abudget where you have really goodarts materials it is wonderful.

    It meant that we could really thinkbig in terms of not using just one cre-ative medium, Duncomb-Andersonsaid.Two performances of the play took

    place last week at Morpeth School inTower Hamlets and at BAMLs head-quarters in the City.The project aims to foster integra-

    tion and help pupils form friendshipsand celebrate diversity.

    I think what we manage to createwhen you bring different childrentogether is a new community wherethe labels like disabilities are mean-ingless, Duncomb-Anderson said,whilst stressing that they strive for ahigh art outcome.

    Bank sponsored play is

    like a breath of fresh air

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    INMARSAT said yesterday that

    struggling US telecoms companyLightSquared had not madeanother payment owed to theBritish satellite firm for licensingpart of its spectrum in North

    America.Cash-strapped LightSquared,

    which is backed by Philip FalconesHarbinger Capital Partners, wasscheduled to pay $29.6m (18.5m)on 31 March, Inmarsat said in astatement.

    LightSquared had already failedto pay $56.25m in February, shortlyafter its plans were dealt a blow

    when the Federal CommunicationsCommission said its network couldinterfere with navigation servicesused by airlines and the military.

    Inmarsat said it was still in talkswith LightSquared about the co-operation agreement, but it couldnot provide any assurance that it

    would receive any furtherpayments.

    LightSquared is scheduled tomake another material paymentunder the terms of an earlier phaseof its agreement today, Inmarsatsaid.

    But the satellite firm said theprospect of further paymentsremain highly uncertain.

    LightSquaredfails again onInmarsat rent

    BY HARRY BANKS

    APPLEs stock continued its upwardtrajectory towards $1,001 yesterdayafter a US analyst predicted the techgiant would hit the thousand dollarmilestone within the next year.

    Brian White at Topeka CapitalMarkets upgraded Apples price targetto a staggering $1,001, saying Applefever is spreading like a wildfirearound the world and we see no endin sight to this trend.

    Calling it a brand that is able totouch the souls of consumers of all

    backgrounds, White pointed toApples upcoming TV and the grow-

    ing market in China and concludedthat the company still has a long wayto play out in the coming years.

    In the first three months of 2012,Apples shares have climbed by morethan half from an already high$409.50.

    Despite sceptics doubting thatApple could continue skywards, theiPhone makers stock took six weeks

    No end in sightas Apple heads

    towards $1,000BY LAUREN DAVIDSON this year to hit $500, and opened at

    $600 just one month later.And Apples stock has not been the

    only milestone maker this year. Chiefexecutive Tim Cook last monthunveiled a quarterly dividend after a16-year drought for shareholders, andthe company which had a $98bncash pile at the end of December isnow thought to have grown its cashstash past the $100bn mark.The Nasdaq-listed stock jumped 1.7

    per cent to $629.32 yesterday, valuingthe firm at $576.8bn.

    Motorola in EC probe for billingApple and Microsoft too muchEU regulators are investigating

    whether phone maker MotorolaMobility breached antitrust rules byallegedly over-charging Microsoftand Apple for use of its patents intheir products, the EuropeanCommission said yesterday.

    The EU regulator said it hadopened two investigations intoMotorola Mobility based onMicrosofts and Apples grievances.

    BY HARRY BANKSThe commission will investigate

    whether Motorola has failed tohonour its irrevocablecommitments made to standard-setting organisations, whichproduce international standards forinformation and communicationtechnologies.

    The EU watchdog said it wouldalso investigate whether Motorolaoffered unfair licensing conditionsfor its standard-essential patents. Itcan fine companies up to 10 per

    cent of their global turnover iffound guilty of breaching EU rules.

    Microsoft asked EU antitrustregulators in February to intervenein its patent dispute with Motorola.

    At the time, Microsofts deputygeneral counsel Dave Heiner said ina blog post that Motorola Mobilityhas refused to make its patentsavailable at anything remotely closeto a reasonable price.

    Motorola Mobilitys sharesdropped 0.25 per cent to $39.13.

    Research in Motions new chief executive Thorsten Heins took the reins in January

    Apple Inc 629.323 Apr

    29 Mar28 Mar 30 Mar 2 Apr 3 Apr

    635

    630

    625

    620

    615

    610

    605

    600

    $

    A DUTCH semiconductor companysaid yesterday it had filed a patent

    infringement suit against ResearchIn Motion, adding to theBlackBerry makers troubles andsending its shares tumbling almostten per cent.

    An affiliate of NXPSemiconductors alleges that

    versions of RIM's BlackBerry phoneand PlayBook tablet infringed onpatents issued to it between 1997

    Research in Motion shares tankas Dutch firm sues over patents

    BY HARRY BANKSand 2008. The patents in questionrelate to design, data transmissionand other features of the devices.

    NXP demands a halt to the

    alleged infringements and seeks torecover what it claims as lostprofit, reasonable royalties andtriple damages for willfulinfringements.

    It has not specified a dollaramount it is seeking from thestruggling smartphone maker,

    which declined to commentyesterday.

    BRITISH chip designer ARMHoldings said yesterday it was tyingup with Dutch smart card makerGemalto and German technologyfirm Giesecke & Devrient toincrease security for servicesrunning on smartphones andtablets.

    The companies said the jointventure would drive adoption of acommon security standard inmobile devices.

    ARMs chief executive Warren

    ARM embarks on joint ventureover mobile security services

    BY HARRY BANKS East said up to now the integrationof the hardware, software andservices necessary for system-widesecurity had been too slow.

    I am confident that this newjoint venture will accelerate theadoption of a common securitystandard, enabling a vibrantecosystem of secure serviceproviders to emerge, he said.

    ARM, which designs the chipsused in nearly all mobile phones,

    will own 40 per cent of the jointventure, while the other companieswill own 30 per cent each.

    WEDNESDAY 4 APRIL 201216 NEWS

    cityam.com

  • 8/2/2019 Cityam 2012-04-04

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    Apple, the Apple logo and iPad are trademarks of Apple Inc, registered in the US and other countries . TM and 200 Apple Inc. All rights reserved. All information is accurate at the time of going to print. Important: due to the fast moving nature of this market, all offers, prices and availability are subject to change. 1 Pay monthly prices are subject to credit check andminimumtermof24monthsonselectednetworksandtariffs.

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  • 8/2/2019 Cityam 2012-04-04

    18/36

    IN BRIEFUnion calls off Stansted strike

    n Baggage handlers at StanstedAirport have called off a strikeplanned for Good Friday, officialsconfirmed yesterday. Swissport andthe joint trade unions, GMB andUnite, said the strike had beensuspended following talks in London,adding that talks would continuelater this month.

    Australia hints at further easing

    n Australias central bank opened thedoor wide for a rate cut in May even asit held rates steady at 4.25 per cent ata review yesterday, saying it wantedto see coming inflation data beforedeciding whether to ease policy. TheAustralian dollar slipped as theReserve Bank of Australia (RBA)sounded a more cautious note on theeconomy, acknowledging that growthhad disappointed.

    Pru says one in six have no pensionnOne in six people (16 per cent)planning to retire this year have noprivate pension and will dependentirely on the state, research fromPrudential revealed today. The Classof 2012 research shows the average

    person planning to retire this year willlook to the government for 34 percent of their income, with state pen-sion payments set to rise to 107.45 aweek. Company pensions are the sec-ond highest source of income,accounting for 35 per cent, with theremaining 30 per cent coming from amixture of savings, investments per-sonal pension saving, part time workand money from family members.

    GETTY

    SHOULD THE COALITION REFORM

    A-LEVELS? Interviews by Joe Softley

    The number of people getting top grades doescast some doubts on whether they are high-

    lighting the best candidates, but that shouldnt meanwidespread reform. If it isnt broke, dont fix it.

    These views are those of the individuals below and not necessarily those of their company

    PAUL KELLYCOMMERZBANK

    The current system is too target orientated.Its not about the all round education you

    receive. The problem with introducing more universitystyle questions is that you may lose the practical aspects.

    HARRY ELLISMIZUHO CORPORATE BANK

    Theres always going to be the argumentsabout grade inflation et cetera but I think they

    are generally fit for purpose. They shouldnt be justanother hurdle in order to get into universities.

    BARNEY WINGWILLIS

    CITYVIEWS

    IMF boss Christine Lagarde asked for more cash from American taxpayers

    UK construction output increased sharply

    2012201020082006200420022000

    70

    65

    60

    55

    50

    45

    40

    35

    30

    25

    PMI

    WEDNESDAY 4 APRIL 201218 NEWS cityam.com

    Oil prices begin hitting Europes

    fortunes as inflation goes upRISING energy prices started to hitfirms in the Eurozone in February,official data revealed yesterday,increasing fears that higher oil priceswill soon affect consumers and thewider economy.

    Producer prices climbed 0.6 percent in the month, taking the annualrise to 3.6 per cent, Eurostat figures

    BY TIM WALLACE showed, compared with a 0.8 per centincrease in January.

    Prices in the energy sector jumped1.2 per cent in February, comparedwith a 0.2 per cent rise in the price ofcapital goods and 0.3 per cent for con-sumer goods. Energy prices were alsoup by 2.3 per cent in January.

    These data fuel concern that high-er oil prices will lead to consumerprice inflation being sticky over the

    coming months this would be badnews for consumers purchasingpower and Eurozone growthprospects, said IHS Global Insighteconomist Howard Archer.

    Furthermore, rising producerprices reinforce belief that the ECB isunlikely to cut interest rates furthereven though there are worrying signsthat Eurozone economic activity isfaltering.

    UK CONSTRUCTION sector activityexpanded sharply in March asunusually mild weather boostedbuilding orders, data revealed yester-day, raising hopes that Britain avoid-ed a second consecutive quarter ofeconomic contraction.The sector has grown in every

    month since January 2011, accordingto Markits purchasing managersindex (PMI).

    In March the figure hit 56.7, indi-cating a sharp acceleration ingrowth from Februarys 54.3 and tak-ing the index well above its no

    change level of 50.Commercial construction experi-

    enced the most growth in the monthand the civil engineering sectorexpanded at its fastest pace sinceMarch 2011.

    However, residential constructionexpanded only slowly.

    Overall new business has beenexpanding steadily for six months,and the jump in orders in March wasthe sharpest rise since September

    Constructionboom adds to

    growth hopesBY TIM WALLACE 2007, leading to a small uptick in

    employment.The good weather appears to have

    led to a surge in demand for construc-tion projects in March, adding to therecent flow of good news which sug-gests the economy will have skirted arecession, said Markit economistChris Williamson.

    Looking ahead, the lack of big newprojects such as Crossrail and theOlympics means expectations aboutthe year ahead continued to run wellbelow the pre-crisis peaks, but busi-ness confidence nevertheless reachedthe highest for nearly two years.

    THE WORLDS economic recoveryremains weak, and nations shouldpull together to support strugglingnations, International MonetaryFund (IMF) boss Christine Lagardesaid yesterday.

    She called on the US to give morecash to the IMF to prop up indebtedEuropean governments.

    Invoking the rural US tradition ofbarn raising, she explained thattogether, the community can

    Lagarde: US would benefit if itbailed out broke euro countries

    BY TIM WALLACE accomplish what the individualcannot, and everybody benefits.

    We should think of pooling ourglobal resources in precisely theseterms, she said, suggesting that theUS should hold back from fiscaltightening because it currentlybenefits from very low borrowingcosts, and instead give to the IMF.

    No member country has ever lostmoney by contributing to IMFresources and I assure you that willnot change on my watch, Lagardepromised.

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    GLOBAL debt capital markets (DCM)activity totalled $1.7 trillion (1.06trillion) in the first three months of2012, a 69 per cent increase on thefourth quarter of 2011, according tofigures from data supplier ThomsonReuters.Their report shows that early 2012

    was the most successful quarter fordebt issuance in three years.

    Financials accounted for half of allDCM activity in the first quarter, atotal of $833.6bn, with materials andenergy DCM activity showing thestrongest year-on-year growth, both

    registering rises of more than 40 percent.

    Overall issuance levels were moremuted in the telecommunicationssector but deals in the sector had anaverage size of over $700m.The volume of global corporate

    high yield debt reached $106.7bnduring the first quarter of 2012, atriple-digit percentage increase fromthe fourth quarter of 2011.

    Issuers in the United Statesaccounted for 71 per cent of overall

    Debt issuanceup 69 per cent

    at start of 2012BY JAMES WATERSON volume, an all-time record for US-

    based companies in the high yieldmarket.The average yield for global high

    yield new issues fell to 7.98 per cent,the lowest percentage since recordsbegan in 1980, powering three-monthissuance levels to only the fourth$100bn-plus quarter on record.

    It was the largest quarter for emerg-ing markets corporate debt onrecord, with new issuance fromgrowth nations hitting $113bn dur-ing the first quarter of 2012, led bydeals in Brazil, Russia, India andMexico.JP Morgan dominated the bookrun-

    ning league table, dealing with$142bn of issuance, equivalent to a7.9 per cent share of the market andearning themselves an enormous$802.5m of manager fees in theprocess.

    Deutsche Bank retained the num-ber two spot during the quarter, with7.1 per cent market share, whileBarclays fell to third place.

    It was good news for banks overall,with a seven per cent increase in debtunderwriting fees.

    WEDNESDAY 4 APRIL 201219NEWScityam.com

    SHARES in insurance broker Cobra

    Holdings plunged by nearly a fifthyesterday after it said it is in talkswith two suitors.

    The firm, which said last monththat restructuring costs would hitannual profits, is now co-operatingwith potential bidders AltoIntermediary, a vehicle set up byCobra chief executive StephenBurrows, and TowergatePartnershipco, part of TowergateInsurance Group.

    Towergate Group is the largestindependent insurance intermedi-ary in Europe, generating morethan 2bn of gross written premi-ums a year.

    Cobra, which writes 350m inpremiums a year, said it hadreceived several indicative offersbefore choosing to speak to Altoand Towergate.

    In a statement yesterday it said:

    Cobra is co-operating with twopotential offerors which aremaking pre-offer enquiries withdue diligence.

    There can be no certainty thatany offer will be made for thecompany.

    Firms intending to bid have until1 May under Takeover Code rules.Shares in Cobra closed down 18.75per cent at 19.5p. The firm was setup in 2006 through the merger ofsix companies.

    Cobra Holdingsshares tank asit enters talks

    BY PETER EDWARDS

    Global debt capital markets % change by asset class, 1 January - 30 March

    InvestmentGrade

    Corporate

    4.1%

    Agency,Supranational

    Sovereign

    9.5%

    MBS

    -25.9%

    High YieldCorporate

    -5.6%

    EmergingMarket

    Corporate

    5.7%

    ABS

    1.4%

    Federal CreditAgency

    -22.8%

    20%

    10%

    -30%

    -20%

    -10%

    0%

    Global high yield corporate debt issuance

    2008 2009 2010 2011 12

    $120 250

    200

    150

    100

    50

    $0

    $20

    $40

    $60

    $80

    $100

    Proceeds($bil)

    NumberoOferings

    Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q 4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q 4 Q1

    Proceeds by bookrunner, 1 January - 30 March

    #1

    JP Morgan

    142,879

    127,947

    121, 240 109,649

    92,39286,793 86,269

    82,865

    76,244 75,309

    #2

    DeutscheBank AG

    #3

    Barclays

    #4

    Citi

    #5

    Bank ofAmericaMerrill Lynch

    #6

    MorganStanley

    #7

    GoldmanSachs & Co

    #8

    HSBC

    #9

    CreditSuisse

    #10

    BNPParibas SA

    $150m

    $140m

    $130m

    $70m

    $80m

    $90m

    $100m

    $110m

    $120m

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    OIL explorer Cairn Energy said yester-day it would buy Agora Oil & Gas for$450m (280.7m) to increase its drillingactivity in Britain and Norway in 2012.The deal marks the first step in Cairns

    strategy, outlined last month, aimed atreducing its exposure to exploration inGreenland, where most of its assets arelocated.

    It suffered an operating loss of $1.1bnlast year, mainly due to problems find-ing commercial quantities of fuel inGreenland.The company, which has previously

    indicated interest in exploring theSpanish coast, did not rule out furtheracquisitions this year.

    There is the potential, certainly, formore transactions. We have the capaci-

    ty to do that, chief executive Simon

    BY JOHN DUNNE Thomson saidId like to think, without giving any

    specific timing, that we will be activethis year in terms of other opportuni-ties, he added.

    Cairn has been busy in the mergersand acquisition field over the past year,having sold the majority of Cairn Indiato Vedanta for $5.4bn.

    Simon Thomson, chief executive of Cairn Energy, said that more acquisitions could be on the table

    WEDNESDAY 4 APRIL 201220 NEWS cityam.com

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    Cairn Energy PLC333.20

    3 Apr

    29 Mar28 Mar 30 Mar 2 Apr 3 Apr

    340

    335

    325

    330

    320

    p

    James Smith, director of the oil and gas teamat Rothschild, is leading the team on the dealfor Cairn.He joined the company in 2008, and hisexpertise is mainly in M&A deals involvingenergy and fossil fuels, having worked for theglobal oil and gas advisory boutique Harrison

    Lovegrove and for Merrill Lynch as an oil andgas specialist.He previously advised Cairn on the sale of itsIndian operations to Vedanta Resources,which was completed late last year.The $5.4bn deal gave Cairn enough moneyfor a massive share buyback earlier this year.More recently Smith has been advising Totalon its bid for Wessex Exploration along withRoger Ader and other colleagues from thebank. Total now has until 16 April to decidewhether to follow up on its offer for Wessex.Bank of America and Morgan Stanley are alsoinvolved in the Agora deal announced yester-day.

    ADVISERS ROTHSCHILD

    JAMES SMITHDIRECTOR OF OIL ANDGAS TEAM

    Cairn to pay $450mfor Agora in a moveaway from Greenland

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    IN BRIEFTotal to send crisis team to Elgin

    n France's Total plans to send a teamof experts today or tomorrow toassess the steps needed to stop alarge and potentially explosive gasleak at its Elgin platform in the NorthSea, a spokesman said yesterday.Helicopter flights resumed carryingcrews to oil and gas rigs yesterdayafternoon, although with protracteddelays, after adverse weatherconditions offshore grounded trafficovernight. The team of engineers willbe on a mission to assess conditions,Total's UK public affairs managerAndrew Hogg said.

    Heritage gets good news in Iraq

    n Shares in Heritage Oil jumped morethan 10 per cent to 152.3p yesterdayafter it revealed better than expectedgas deposits at its Mirian well in theKurdistan region of Iraq. The firm saidit plans to drill further afterdiscovering a new gas reservoir withinthe region that had not shown up in itsinitial seismic surveys. Heritage ownsa 75 per cent interest in the block,while Tony Haywards Genel holds theother 25 per cent. We are delightedto have discovered and flowed gasfrom this reservoir interval, said chief

    executive Tony Buckingham.

    Lonrho and EasyGroup open hotel

    n Lonrho and EasyGroup are opening

    the first African easyHotel inJohannesburg, the firms saidyesterday. Platinum miner Lonrho,which is also working with EasyGroupon a low-cost airline in Africa, said ithopes to open some 50 hotels overthe next four years.

    SHARES in Gulfsands Petroleum fellalmost five per cent yesterday as thefirm said it was looking away from

    war-torn Syria to expand its business.The Aim-listed company, whose

    shares have fallen from a peak of400p to just 146.5p since the start oflast years revolutions across north-ern Africa, stressed that it will holdonto its Syrian assets as it hunts fordeals elsewhere.

    Its aims for 2012 are to consolidateour position in Tunisia and build a

    viable non-Syrian leg to the businesswithin the capacity of the groups

    financial resources, chief executiveRichard Malcolm said yesterday.The group reported annual profit

    after tax