EADS boss warning over BAE deal

19 September 2012 Last updated at 12:54 ET

The chief executive of EADS has said its proposed tie-up with BAE Systems represents a "perfect fit" but that there is "serious work" ahead to convince investors of its value.

Tom Enders' thoughts were given in a letter to 136,000 EADS employees, including 17,000 in the UK.

Politicians are also looking closely at the planned merger, which would create the world's largest defence company.

On Monday, France's finance minister said the idea needed close scrutiny.

Pierre Moscovici said the tie-up raised a lot of questions over strategic interests and "industrial effects".

In his letter, Mr Enders said that "governance and national security interests are currently the focus of our work".

"We are currently in constructive and advanced discussions with all relevant governments and are trying to accommodate their concerns and national security interests..."

Struggle

But Mr Enders acknowledged there may be a struggle ahead to get support for the deal: "No doubt, we have some serious work to do - and that goes particularly for our investor relations teams - to convince shareholders and investors that we are on track to build a stronger growth platform."

He said the discussions with BAE Systems were "not the result of top management gone haywire".

The announcement of the deal sparked a rise in BAE's share price but a fall in EADS's.

Mr Enders said this was simply because investors had been "taken by surprise".

The letter said the proposal would enable the firm to reach its goals seven years earlier than planned.

One of these is to increase its global markets.

But he implied there were unlikely to be job losses as a result of a successful tie-up.

In terms of the impact on staff and sites he said the two companies were "largely complimentary and have very little overlap".

But he said that in the defence industry, internationalisation "is a must", something that combining with BAE Systems - which he called the world's most international defence company - would provide.

He finished by saying that while there had been some critical reactions to the deal "word will soon go around, that this deal makes good business sense".

Under the code of the UK's Takeover Panel, the deadline to finalise the details of the deal is 17:00 BST on 10 October.

20 Sep, 2012

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HTC unveils Windows Phone mobiles

19 September 2012 Last updated at 16:55

HTC has unveiled two Windows Phone 8 handsets at an event in New York.

The firm has said that it intends to promote the 8X, which features a 4.3" (10.9cm) display, as its flagship device alongside the Android-powered One X.

The firm is also offering a smaller 8S model with a 4" (10.2cm) screen.

HTC's share price has fallen more than 50% since February after the firm experienced weak sales of earlier models despite positive reviews.

Analysts have said the firm had a weak advertising campaign which was compounded by the fact that its South Korean rival, Samsung, had a much bigger marketing budget.

Nokia and Samsung have already shown off alternative Windows Phone devices which will launch after Microsoft releases the operating system.

Operator support

HTC said the 8X would launch in 50 countries in early November across 126 mobile operators, while the 8S would be available in 52 countries with more than 146 operators.

Such detail was notably lacking at Nokia's recent Lumia 920 launch, where it did not confirm the date or number of countries the smartphone would be sold in.

HTC made much of the devices' design at the US event saying they had "a remarkably unique profile" thanks to the way their edges tapered, becoming thinner at the bottom, to make them feel thin in their users' hands.

It said its top-end model featured an 8 megapixel camera on its rear supported by a dedicated chip for "faster focus speed and clearer, sharper shots". The 2.1MP front camera - used for video chats - has also been designed to provide a wide-angle view.

The firm also hopes to distinguish both models by including Beats Audio sound equipment which it said offered "deeper bass and crisp vocals". The handset maker owns a 25% stake in the company.

The 8X has an NFC (near field communication) chip for touchless payments, but the 8S does not.

Tough competition

The bet on Microsoft's technology carries risks - the firm's phone systems only accounted for 3.1% of global smartphone shipments in the April to June months, according to research firm NPD.

But one of the company's analysts said HTC had an opportunity to grow that number.

"The reception from operators is quite good," said Francisco Jeronimo, European mobile devices research manager, told the BBC.

"The market wants another alternative to Android as vendors don't want to face the kind of problems that have arisen out of the lawsuits between Apple and Android device manufacturers - products being withdrawn or delayed.

"But HTC has to compete against Nokia and Samsung which also have Windows Phone 8 products.

"Nokia offers extra services on top such as its transport and augmented reality City Lens facility, while Samsung has a bigger marketing budget."

Another analyst praised HTC for the industrial design and materials used to build its new devices, saying they would prove eye-catching on store shelves, but was not convinced that would be enough to improve its fortunes.

"HTC has had problems standing out in the Android market, and it could be even more difficult on Windows Phone 8 as Microsoft controls more of the experience on the platform," said Gartner's research director, Roberta Cozza.

"HTC needs to add further value to the ecosystem similar to what Nokia has done with its imaging and navigation resources.

"Unless that happens I don't suspect things will change a lot for the firm."

HTC's press conference is the last of the big smartphone launches that had been scheduled ahead of the Christmas shopping season.

19 Sep, 2012

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William Hill in Sportingbet talks

19 September 2012 Last updated at 12:08 ET

UK bookmaker William Hill has confirmed it is in talks over a possible joint offer for gambling firm Sportingbet.

William Hill, which has 2,300 High Street betting shops, is attempting to reach a deal to buy Sportingbet with the European gaming company GVC.

Shares in the target company rose 17% as market rumours about the deal circulated.

Sportingbet is based in Guernsey and has more than 2.5 million registered customers in 200 countries.

William Hill and GVC have until 16 October to announce a firm offer.

They are likely to split Sportingbet's operations between them, with William Hill taking the Australian and other locally licensed Sportingbet businesses.

Sportingbet makes 90% of its profits in Australia and has about a third of the country's online gambling market.

William Hill said in a statement: "William Hill and GVC note the recent share price movement of Sportingbet and confirm that they are in the preliminary stages of considering a possible joint offer for Sportingbet.

"William Hill and GVC have committed to work exclusively with each other in this regard."

20 Sep, 2012

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US home sales at two-year high

19 September 2012 Last updated at 10:36 ET

Sales of previously owned US homes reached their highest level for more than two years in August, figures show.

Prices for such homes also rose, according to figures from the National Association of Realtors (NAR).

The figures added to the picture of an improving US housing market, although the number of first-time buyers fell back from 34% to 31%.

Earlier, figures from the US Commerce Department showed new house building had also risen between July and August.

Seasonally adjusted home sales were running at an annual rate of 4.82 million last month, according to the NAR.

That is the biggest number since May 2010, when sales were boosted by a federal home-buying tax credit.

However, the figure is still below the 5.5 million units a year level seen as consistent with a healthy housing market.

19 Sep, 2012

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Facebook trials mobile ad system

19 September 2012 Last updated at 15:04

Facebook is testing a system that allows it to make money by placing adverts for other companies on third-party apps and mobile web pages.

The placements, on Apple iOS and Android-powered devices, are based on data held by the social network about users and the links they have "liked".

The company said it was "a small test" limited to the US.

The firm's stock has risen 23% over the past fortnight, but only after tumbling 54% from its flotation price.

Chief executive Mark Zuckerberg recently said mobile devices were a priority for the firm, but added showing adverts in a separate column alongside a user's news feed on handsets was not an option.

"We've had right-hand-column ads and it's been great, a multi-billion-dollar business," he said at a conference organised by Techcrunch in San Francisco.

"But on mobile, we can't do that. It's clearly going to have to be different."

Anonymised data

By clicking on banner ads or full-screen marketing material, the user is directed to either the advertiser's mobile website or an app store where a developer's product can be downloaded.

The network anonymises information about the users involved in the trial - this means neither the ad exchanges nor the sites where the material appears should be able to trace the clicks back to a specific Facebook account.

"We've been showing ads off of Facebook on Zynga.com for a few months now and we think that showing mobile ads outside of Facebook is another great way for people to see relevant ads and discover new apps," Facebook said in a statement.

Ads on the go

Ahead of its share sale Facebook identified the fact users were increasingly accessing the net on mobile devices as a risk factor.

"Growth in use of Facebook through our mobile products, where we do not currently display ads, as a substitute for use on personal computers may negatively affect our revenue and financial results," it said in February.

Since then the firm has allowed app developers to advertise their products within its member's mobile news feeds.

It has also introduced Sponsored Stories - posts created by an advertiser that appear if a "friend" or page the user is connected to shares the material.

One industry watcher said the latest effort would enable Facebook to further boost revenues without flooding its own app with more adverts at this time.

"Facebook's greatest asset is its wealth of user data - it's a mine of information that is growing at a rapid rate," said Mark Mulligan, editor of the Media Industry Blog.

"What it's now doing is not that different to what Google does - placing adverts on multiple platforms based on data about its users that it can draw on.

"[There are risks,] all this is happening against a backdrop in which consumers are becoming more aware of user privacy issues, but on the other hand they value the fact the social network and other services that are provided without charge."

19 Sep, 2012

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DHL workers to take strike action

19 September 2012 Last updated at 07:37 ET

Workers at Cumbernauld-based DHL Supply Chain are to take strike action in a dispute over pay and the site's future.

The Unite union said more than 350 workers had rejected a pay offer amounting to an annual 2% increase for two years.

It added workers were concerned about the future of the Westfield site after key contractor Marks and Spencer announced distribution network changes.

A schedule for strike action will be announced "in due course".

Unite said more than 90% of ballot papers returned were in favour of industrial action.

The dispute mainly involves warehouse and logistics staff.

According to the union, more than 100 workers have been made redundant at the site in the last two years - with 15 jobs being lost in the summer following the Marks and Spencer restructuring announcement.

Unite regional industrial officer Tony Devlin said: "We've got to the point where the situation is untenable.

"This workforce readily accepted a global pay freeze in 2008 and has had to contend with a significant spate of redundancies in the last two years - their commitment to DHL and M&S is unquestionable.

"We've accepted the cuts and made proposals for the diversification of the business operation after the M&S announcement but have been continuously kept in the dark by DHL and M&S.

"The recent pay offer was the straw that broke the camel's back."

19 Sep, 2012

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Trump 'advert complaints' upheld

Complaints about newspaper adverts commissioned by the Trump Organisation showing broken and rusting wind turbines under the headline 'Welcome to Scotland' have been upheld.

A picture in the Press and Journal newspaper showed the turbines, with a disclaimer admitting it was not taken in Scotland.
It was not enough to save the advert from criticism from the Advertising Standards Authority (ASA).
Donald Trump is against wind farms.
The US billionaire is campaigning to prevent the construction of a major wind farm off the Aberdeen coast, close to his new golf course at Menie.
The advert warned: "Alex Salmond wants to build 8,750 of these monstrosities".
The ASA said the pictures had given a misleading impression of the possible consequences of the Scottish government's plans to use wind turbines.
The ASA said the advert should not be used again in its current form.

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FSA 'concerns' about Bob Diamond

19 September 2012 Last updated at 09:02 ET

The UK's financial regulator has said it warned Barclays two years ago that Bob Diamond could be unsuitable to be appointed chief executive of the bank.

Newly-published letters reveal that the Financial Services Authority felt its investigation into the Libor rate-rigging scandal was relevant.

The FSA said it could not prejudge the appointment, but reserved the right to "reassess his suitability".

Mr Diamond resigned in July over claims Barclays' traders tried to rig Libor.

The letters were disclosed by the Commons' Treasury Committee, which has taken evidence on the Libor affair from Barclays, the FSA and the Bank of England.

According to a FSA file note, there was a meeting on 15 September 2010 between the regulator's chief, Hector Sants, and Barclays' then chairman, Marcus Agius.

At this meeting, the FSA says it told Mr Agius that the continuing Libor investigation could have a bearing on the bank's decision to appoint Mr Diamond. However, Mr Diamond had already been named chief executive of the bank and took up the post in January 2011.

In a letter sent to committee chairman Andrew Tyrie on 20 August 2012, Mr Sants writes: "The FSA was fully aware that the ongoing investigation might come to conclusions which would be relevant to Mr Diamond's suitability.

"However, at the time, since the investigation was not concluded, it would not have been appropriate to prejudge its outcome."

Referring to the meeting with Mr Agius, Mr Sants continues: "I specifically made clear that we reserved the right to re-assess his [Mr Diamond] suitability in the light of the conclusions reached by this investigation and requested he make this clear to Mr Diamond.

"Secondly, I would like to record that in that conversation, I made clear that our concerns about Barclays' culture were not some generic observation but specific to Barclays, and asked that these concerns be communicated by Mr Agius to Mr Diamond. Mr Agius confirmed that he would do this."

The information appears to be at odds with comments by Mr Agius, who has said that the FSA did not cast doubt on Mr Diamond's appointment.

Mr Diamond resigned after Barclays was fined more than £290m for rigging Libor benchmark interest rates.

19 Sep, 2012

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BoE sees worse inflation outlook

19 September 2012 Last updated at 07:21 ET

Bank of England policymakers think inflation is set to slow less rapidly because of higher oil costs and possible food price rises.

Minutes from the latest meeting of the Monetary Policy Committee (MPC) showed that they felt inflation was unlikely to slow as it had forecast in August.

They also showed all nine MPC members voted to hold rates and not increase the programme of quantitative easing.

However, one MPC member said there was "good case" for more QE.

More stimulus?

Figures released on Tuesday showed that inflation as measured by the Consumer Prices Index (CPI) fell to 2.5% in August, down from 2.6% in July.

Inflation is now much closer to the Bank of England's 2% target, having dropped from a peak of 5.2% in September last year.

However, the minutes from September's meeting of the MPC noted: "The rise in oil prices and the probable increase in utility and some food prices meant that the near-term outlook was for a less rapid fall in inflation than the Committee had thought at the time of its August Inflation Report projections."

All members of the MPC agreed to keep its programme of quantitative easing (QE) at £375bn.

Under QE, the Bank buys government bonds, hoping to create beneficial knock-on effects for the economy.

The latest minutes showed most members found the decision to maintain QE at the current level "straightforward".

But others felt extending it "was more likely than not to be needed in due course".

And one member said that "a good case could be made" for announcing an increase in QE immediately.

Several analysts have said they think the Bank will increase the QE programme above the current level.

Howard Archer, an analyst at IHS Global Insight, said his firm "strongly suspect" it will increase the programme by another £50bn in the fourth quarter of 2012.

Brian Hilliard of Societe Generale agreed, noting that this was the second consecutive MPC meeting at which increasing bond buying had been discussed.

"I don't think that is going to sway the majority until November, but the fact that it has been discussed two meetings in a row does point to a further expansion of QE in the November meeting," said Mr Hilliard.

19 Sep, 2012

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Asos enjoys sales boost from US

19 September 2012 Last updated at 07:17 ET

Online fashion retailer Asos says a big increase in demand from US customers helped sales grow 31% in the three months to the end of August.

Overall sales increased to £141m in that period, up from £107.4m, but 65% of the sales increase came from the US.

The company said that sales outside the UK, European Union and the US jumped 53% to £47.4m in the period.

Chief executive Nick Robertson said it would hit full-year profit forecasts.

In the UK, Asos saw sales increase by 15% to £49.8m in the three months to 31 August, maintaining strong performance at home.

Asos has grown while many of its rivals that operate physical stores have struggled amid economic uncertainty.

For the year to 31 August, Asos saw a 91% increase in sales to US customers, totalling £49.5m, while sales outside the UK, the European Union and the US jumped by 94% to £165.2m.

For the year to the end of August, its UK sales totalled £205.2m - a 10% rise on the previous year.

In the same period, Asos said that it had five million active customers, defined as people who have shopped with Asos in the last 12 months - a 35% increase year-on-year.

Jean Roche, an analyst with stockbroking business Panmure Gordon, called the numbers "particularly impressive".

Meanwhile British fashion retailer French Connection has reported a first-half loss before tax of £6.3 million.

19 Sep, 2012

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