Monday Papers: Belgium pays €4bn to take Dexia retail arm

Financial Times

* Belgium will pay €4 billion to take over the domestic retail banking arm of Dexia after it agreed with France the terms of a break-up of the financial services group.
* Canadian oil and gas explorer Daylight Energy said on Sunday it had agreed to be acquired by China’s Sinopec International Petroleum Exploration and Production Corp for about C$2.2 billion.
* IMI, the UK engineering group, is investigating spending up to several hundred million pounds on acquisitions to bolster its position in niche fields.
* A member of British parliament and trade unionists are putting pressure on US-based Colfax, which is acquiring Charter International, to divulge its cost-cutting plans.
* Ladbrokes may pull the plug on its potential takeover of Sportingbet even if the online gambling suitor removes a perceived stumbling block to the deal by selling its Turkish business.
* Vitruvian Partners, a private equity firm investing its inaugural €925 million fund, is buying just over half of The College Group, valuing the London communications consultancy at about £45 million.
* China Guangdong Nuclear Power has reopened takeover talks with Kalahari that could lead to a deal valuing the Aim-quoted miner at more than $1 billion.

The Lex Column

* Part of the rationale for Operation Twist is to milk the downward trend further, but few people have asked what happens when rates stop or reverse, as they must.
* Budapest has set preferential exchange rates at which Swiss franc-denominated mortgage debt can be repaid – and the banks must take the losses.
* Stoxx 600 European companies have written off about €115 billion of goodwill – a mere 6% of the €1,900 billion spent on acquisitions since 2006.

Other comment:

* Countries such as the UK would not join a financial insurance scheme – and might block a single banking supervisor.
* Some in the industry are launching infrastructure funds to tap into market demand for long-term funding sources no longer available from banks.

The Guardian

* Britain's cycle of rising debt and dependence on consumption to drive growth make it unlikely to bounce back any time soon.

The Daily Telegraph

* At last, a sense of urgency has gripped the British authorities. But before we can find a way out of this epic morass, we need to be sure what got us here.

The Independent

* If the UK fails to deal with budget deficit, it could end up with a sovereign downgrade, higher interest rates and even more pain.