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Wednesday Papers: Spain and Italy to be bailed out in £600bn deal

And Pessina seals $6.5 billion Alliance Boots deal with US drugs chain Walgreens.

Wednesday Papers: Spain and Italy to be bailed out in £600bn deal

Top stories

  • The Daily Telegraph: European leaders are poised to announce a £600 billion deal to bail out Spain and Italy, it emerged at the G20 summit on Tuesday night.
  • Financial Times: Alliance Boots, the retail and wholesale pharmaceuticals group, is selling a 45% stake to Walgreens, the US pharmacy chain, for $6.7 billion in cash and shares.
  • Financial Times: US lawmakers and regulators have attacked London as a source of financial crises and promised tougher crossborder rules in the wake of $2 billion of trading losses at the UK unit of JP Morgan Chase.
  • The Guardian: Britain is on the brink of losing out to Germany as Europe's No. 1 destination for foreign direct investment, as it reported 7% drop in inward investment in 2011, while Germany saw inward investment rise by 15%.
  • The Independent: The size of the International Monetary emergency fund to rescue bankrupt economies will rise to $456 billion, thanks to a $43 billion pledge from China.
  • Daily Mail: Bank of England is likely to pump more cash into UK economy as inflation falls back to 2.8%.
  • Financial Times: Leading hedge fund managers are betting on a significant sell-off in German government bonds in the coming months after a sharp fall in yields on the debt paper driven by a flight to safety in the eurozone.
  • Daily Express: AstraZeneca, up 77 pence to 2760 pence in London on Tuesday, was tipped by broker Liberum Capital to merge with US pharmaceutical firm Abbvie, part of rival Abbott Laboratories, creating savings of £2.5 billion.
  • Financial Times: The chief US bank regulator overseeing JP Morgan Chase said his agency did not realise the “potential significance” of the bank’s wrong-way bets on credit derivatives until several days after initial news reports.
  • Financial Times: Royal Bank of Scotland has joined a string of big banks by scaling back its financial advice for retail customers, triggering the loss of more than 600 UK jobs.
  • Financial Times: Berkshire Hathaway will be the preferred bidder for a loan portfolio in the bankruptcy of Residential Capital.

Business and economics

  • The Guardian: Eurozone finance ministers will meet in Luxembourg on Thursday, amid rumours that Angela Merkel is about to give the green light for the eurozone bailout fund to wade into financial markets and buy up the bonds of troubled governments.
  • Financial Times: Trading ahead of London-listed mergers and acquisitions last year dropped to the lowest level in nearly a decade, according to the UK Financial Services Authority, as abnormal price movements preceded 19.8% of all deals.
  • The Daily Telegraph: Two Chinese state companies have backed rival bids to build nuclear power plants in Britain.
  • The Guardian: Asia-Pacific region now has 3.37 million men and women with more than $1 million in the bank, compared with 3.35 million in North America, Capgemini and RBC Wealth Management's latest world wealth report revealed.
  • Financial Times: Imagination Technologies’ pre-tax profit rose from £16.4 million to £28.5 million last year and revenues were up from £98 million to £127 million.
  • The Daily Telegraph: Home Retail on Tuesday revealed that sales at Homebase during the first quarter of the year had fallen 8.1% to £421 million.
  • Financial Times: Prices of crucial shale gas byproducts, such as ethane and propane, have tumbled to 10-year lows due to booming output, further hurting the profitability of energy companies such as ExxonMobil and BHP Billiton.
  • Daily Mail: Efforts to cut bankers' huge pay packets are being shrugged off by the financial industry, powerful shareholder groups told British MPs on Tuesday.
  • Financial Times: Aim is seeking to publicly censure Gladstone Pacific Nickel, controlled by Australian billionaire Clive Palmer over the cancellation of its shares in November 2010.
  • The Guardian: British leisure group Whitbread said underlying sales rose 4.5% in the 13 weeks to 31 May, helped by an 8.4% rise in like-for-like sales at Costa Coffee and a 4.3% jump at Premier Inn.
  • The Independent: The top five directors of Nationwide Building Society enjoyed tasty pay rises this year, ensuring all of them took home more than a million pounds.
  • Financial Times: FedEx said its net income for its fiscal fourth quarter fell to $550 million, or $1.73 a share, from $558 million, or $1.75 a share, in the same three months in 2011.
  • Financial Times: Jefferies, the midsized US investment bank, posted net earnings of $63 million in the three months ending May 31, down from the $81 million reported a year before.
  • The Guardian: Hector Sants, the outgoing chief of the City regulator the FSA, has donated his £143,750 bonus to the Art Room, a charity supported by the Duchess of Cambridge.
  • The Independent: Danone, the world’s largest yoghurt maker, says profit margins will fall by 50 basis points in 2012 as it is being hit by the financial crisis in Southern Europe.
  • Financial Times: Oriel Securities, the stockbroker that raised £10 million last year to pursue expansion when rivals were cutting back, has carried out its second round of redundancies in three months, sacking 18 staff.
  • The Independent: Laura Pendergest-Holt, the former chief investment officer for Allen Stanford, has agreed to plead guilty and will receive a three-year prison sentence for her role in a $7billion fraud.
  • The Daily Telegraph: Sandeep Singh Dosanjh, Navdeep Singh Gill and Ranjot Singh Chahal, who defrauded the taxpayer of £38 million through a complex 'missing trader’ scam, were jailed for a total of 35 years.
  • Financial Times: Airbnb, the peer-to-peer home rental website, has grown dramatically in the past half year, doubling the number of nights booked through it in the past five months to 10 million.

Share tips, comment and bids

  • Financial Times: Switzerland’s Julius Baer group, the country’s biggest “pure play” private bank, confirmed on Tuesday it was in talks with Bank of America about buying Merrill Lynch’s international wealth management business for $1.5-2 billion.
  • Financial Times: Ryanair has made an audacious third attempt at taking over Aer Lingus, Ireland’s flag carrier, for €1.3 per Aer Lingus share.
  • Financial Times: Everbright Bank, a Chinese state lender that focuses on small businesses and consumers, is determined to buck a market trend of failed IPOs and list in Hong Kong before the end of this year.
  • Financial Times: The boss of International Airlines Group has signalled he is receptive to another airline buying all or part of the stake in IAG held by Bankia, the part-nationalised and deeply troubled Spanish bank.
  • Financial Times: The bidding war for Kewill intensified on Tuesday as Francisco Partners, the US private equity group, stepped in for the second time and raised its offer for the struggling logistics software group to £102.7 million.
  • Financial Times (Comment): With its built-in keyboard and track-pad and integrated kickstand, Microsoft’s new Surface device immediately stands apart from the other tablets in a crowded market dominated by Apple’s iPad.
  • The Guardian (Comment): A modest tax on speculative financial transactions would be some restitution for the human costs of this bank-made crisis.
  • The Guardian (Comment): Incarcerated in a citadel of currency union with the flexibility of granite, eurozone governments give their people no chance to escape.
  • The Daily Telegraph (Comment): The tentative deal at the G20 summit to mobilise the EU's rescue machinery to douse the raging fire in Spain and Italy comes in the nick of time, but is fraught with fresh dangers.
  • The Daily Telegraph (Comment): Boots is the right medicine to soothe Walgreens' growing pains.
  • Daily Mail (Comment – Alex Brummer): ith each deal done involving Boots, from the initial merger with Alliance Unichem, to the KKR-Pessina buyout to the current Walgreen’s $16.2 billion takeover, Boots the Chemist moves further away from its 1857 Nottingham heritage.
  • Financial Times (Lex): Ryanair: a deal with Aer Lingus was blocked five years ago because carriers were important operators on short-haul routes and regulators may take some persuading now.
  • Financial Times (Lex): Walgreens/Boots: for all the talk of ‘iconic brands’, the retailers have different images, and transatlantic retail adventures have not always been happy.
  • Financial Times (Lex): Microsoft tablet: global PC makers, from HP to Lenovo, must be considered – they will not make Windows tablets if they are competing against a subsidised Surface.
  • Financial Times (Lex): Hon Hai/Sharp: a model to regenerate Japanese tech has-beens and for low-cost producers to move into higher-margin businesses emerges.

1 comment so far. Why not have your say?


Jun 20, 2012 at 09:00

How funny and ridiculous that US Lawmakers and regulators have attacked London as a source of financial crisis. Where has most of our troubles come from.

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