Friday, July 13, 0730 BST
BP
Black and white replace Browne and green. The Times reports that Tony Hayward, the new chief executive, is planning to play down his predecessor’s emphasis on the environment and refocus BP on profits and operations.
More on BP here
Mr Hayward wants a cultural shift as he strips out bureaucracy and complexity from the oil group in the wake of the departure of Lord Browne of Madingley.
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Symbolic of the change in mood is a decision to move the office of Peter Sutherland, BP’s chairman, opposite Mr Hayward’s office. Company executives previously shuttled between the two key offices to relay messages in what was widely seen as a symptom of dysfunction at the top.
As the new broom sweeps all before it, Lord Browne’s old office suite, designed by Viscount Linley, has been transformed into a humble meeting room - with standard office furniture.
Counter culture
Green is also a shade lighter at Tesco. The supermarket is launching its biggest price-led advertising campaign for a decade amid growing concerns of a slowdown on the high street. The campaign is in contrast with recent marketing focusing on quality and environmental issues, says The Times.
More on Tesco here
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The £4 million campaign, starting on television on Friday, will feature independent price checks on 10,000 products in each supermarket chain and show where Tesco is cheaper or more expensive.
The move comes three weeks after Asda announced £250 million of price cuts. Within hours, Tesco responded with reductions worth £270 million, putting pressure, say analysts, on Morrisons and J Sainsbury.
Tesco claims that in the past year it has been 7 per cent cheaper than Sainsbury’s and 1 to 2 per cent cheaper than Asda. But Asda says that research shows it has been Britain’s cheapest supermarket for ten consecutive years. A spokesman says: “Tesco needs to get its calculator back out.”
Can of worms
A furious row has erupted among some of the world’s largest investment banks over the role played by Bank of America (BoA) in Rio Tinto’s $38.1 billion (£18.8 billion) offer for Alcan, says The Daily Telegraph.
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More on Alcan here
The US bank was expected to provide up to $15 billion of the financing, with Royal Bank of Scotland and Deutsche Bank the rest. But BoA appears to have gotten cold feet, leaving Rio’s lead adviser, Deutsche, hastily to sign up Credit Suisse and Societe Generale.
The Telegraph reports that BoA even considered switching its allegiance to CVRD, the Brazilian giant, which is also thought to have submitted a bid to Alcan.
One adviser told the newspaper that this would have caused deep resentment. “If it’s true, then that’s not on. BoA will struggle to build a presence in London if it goes around doing such things.”
Skimming stones
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Blackstone has also been playing with fire. The buyout firm has devised a way for its partners to effectively avoid paying taxes on $3.7 billion, the bulk of what it raised last month from selling shares to the public, reports The New York Times.
More on Blackstone here
Although they will initially pay $553 million in taxes, the partners will get that back, and about $200 million more, from the Government over the long term.
The plan, laid out in the fine print of Blackstone’s financial documents, comes as Congress debates how much managers at private equity firms like Blackstone and hedge funds should pay in taxes on their compensation. And amid a public backlash against perceived greed.
One tax lawyer says: “These guys have figured out how to turn paying taxes into an annuity. What people don’t realise is that the ... debate in Washington about what tax rate to pay misses the big picture.”
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Missing links
Google, the world’s most popular internet search engine, is being taken to court for allegedly deceiving millions of users over links that are paid for by its advertisers.
More on Google here
The Australian newspaper and others report that, in the first legal action of its kind, the country’s competition watchdog is seeking an injunction to stop Google from displaying search results that did not “expressly distinguish” advertisements.
The Australian Competition and Consumer Commission claims that Google has engaged in deceptive or misleading conduct in relation to the use of its paid links. Google says that the claims are “without merit” and that it will vigorously defend the court action.
The Times comments that the danger for Google is that it could be made responsible for all search results, not just the sponsored ones that appear on the right hand sides of results pages that are being disputed in this case.
More opinion here
Private world
DP World has ruled out a stock market float in the short-term in favour of raising money on the debt markets, says The Daily Telegraph.
More on DP World here
The head of the company that owns DP World, best known in the UK for buying P&O for £3.9 billion in 2005, believes that issuing bonds is cheaper than raising money in the public markets.
His comments are contrary to heightened market speculation that DP World was set to float up to $5 billion (£2.46 billion) of its shares in Dubai and London this year.
Perhaps the writing was on the wall two days ago, when the group announced that it would launch a $3 billion sale of two benchmark bonds which will mature in up to 30 years.
Professional foul?
The Football League is refusing to sanction the sale of Leeds United to Ken Bates, the club’s chairman, and has launched an inquiry into the handling of the club’s affairs by its administrator, KPMG, says the Financial Times.
More on Leeds United here
The league says that it has not received the required documentation and assurances from KPMG over its intended sale of the club to Mr Bates.
KPMG solicited bids for the club last Friday after the Inland Revenue challenged a creditors’ deal put together by Mr Bates last month. The deadline for bids expired on Monday and Mr Bates’s bid trumped another offer.
Mr Bates took over the club in January 2005 and then into administration in May, with debts of £35 million.
MARKETS
FTSE 100 (Thursday close): up 82.60, or 1.3%, at 6,697.70
Dow (close): up 283.86, or 2.1%, at 13,861.73
S&P 500 (close): up 28.94, or 1.9%, at 1,547.70
Nasdaq (close): up 49.94, or 1.9%, at 2,701.73
Nikkei (latest): up 251.01, or 1.4%, at 18,235.15
Hang Seng (latest): up 328.56, or 1.4%, at 23,137.58
Sterling (latest): $2.029
Oil (latest): West Texas crude up 1 cent at $72.51
Gold (latest): down 80 cents at $667.50
NEW YORK
Wall Street struck fresh records after upbeat retail sales reassured investors about consumer spending and the $38 billion agreed takeover of Alcan fuelled expectations of further deals.
More on US markets here
The Dow Jones industrial average and the broad-based S&P 500 both reached new peaks, with the Dow recording its biggest points gain since 2002. Alcoa, which was outbid for Alcan by Rio Tinto, was a big contributor to the Dow’s rally on speculation that it would be a takeover target.
Several mainstream retailers, including Wal-Mart, Target and JC Penney, reported buoyant sales outlooks for July, raising optimism for back-to-school sales.
The Dow surged 2.09 per cent, the S&P 500 rose 1.91 per cent and the technology-laden Nasdaq closed up 1.88 per cent.
ASIA
Rio Tinto’s $38 billion bid for Alcan and higher sales at US retailers pushed a regional benchmark to a record.
More on Asian markets here
BHP Billiton climbed and Posco, the No 4 steelmaker, surged as much as 11 per cent in the wake of Rio’s offer.
Samsung Electronics rose after reporting better-than-expected earnings and a newspaper reported that Carl Icahn, the billionaire investor, might be planning a hostile bid.
The Morgan Stanley Capital International Asia-Pacific Index was up 1.3 per cent while Japan’s Nikkei had risen 1.4 per cent in intraday trading.
Paul Larter
paul.larter@thetimes.co.uk
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