Fairfield Energy, the private equity owned North Sea oil company, has today confirmed that its £300 million stock market listing has been shelved. This comes only hours after rumours began circulating the market that the fund raising was experiencing difficulties and may indeed be pulled today. So where does this leave other new issues planned for the UK market?
Unofficially Internet grocer Ocado is rumoured to be considering pulling the £1 billion flotation of the group after the revelation that Fairfield Energy, a private equity backed North Sea oil business, looks almost certain to pull a fund raising for £330 million. It would appear that investors have shied away from the new issues market which is not a good sign for Ocado and its proposed £1 billion valuation.
The UK Takeover Panel has effectively banned South African investor Brian Myerson from dealing in the UK investment market for three years with what is known as the "cold shoulder" ruling. Myerson, and two other investors, were found guilty by the Takeover Panel in relation to a bid to take control of the Principle Capital Investment Trust in March last year. The allegation made by the Takeover Panel is in relation to the three investors acting together to take effective control of the investment trust without making an offer to other shareholders.
Royal Bank of Scotland chief executive, Stephen Hester, has today reiterated his opinion that UK taxpayers should benefit from the bailout of the UK banking system. Aside from the significant investments in Lloyds Bank and Royal Bank of Scotland, as well as Bradford and Bingley and Northern Rock, UK taxpayers have pumped billions upon billions of pounds into the UK money markets. Quite how the government and the Bank of England would be able to manage an overall return on this significant investment remains to be seen.
We wake up today with news that BP has installed a new tighter fitting containment cap with high hopes that this could temporarily stop the flow of oil into the Gulf of Mexico. This is an issue which has been ongoing for many weeks now and indeed one which will cost BP billions upon billions of dollars when the final cleanup and compensation bills are picked up. While this is only a temporary measure, until a more permanent tool can be fitted, it should at least stop the damaging flow of oil in the area.
At a time when the UK government is looking to slash the public-sector budget there have been further concerns regarding banking bonuses in the short to medium term. There's no doubt that the banking arena has lost the trust of UK consumers and UK businesses because of the startling turnaround in business activity, profitability and bonuses as result of significant taxpayer investment.
In a continuation of the previous Labour government's intention to increase the attraction of the UK motor market to overseas manufacturers, the coalition government has today confirmed a £360 million loan guarantee in relation to Ford Motor's £450 million loan agreement with the European Investment Bank. This is part of the company's £1.5 billion investment program in the UK which will span the next five years and see a new generation of green engines and green cars introduced to the marketplace.
The very fact that the market capitalisation of BP has fallen by in excess of £100 billion since the Gulf of Mexico disaster began would obviously at some stage make the company a potential takeover target. However, in a startling development to the situation it is believed that the US government has unofficially given oil giant Exxon the "go-ahead" to at least consider an offer of BP. This would create a company with a value in excess of £260 billion and a giant in the oil industry. So would BP be able to fight off any takeover offer?
Over the last two years we have seen a significant reduction in various exchange rates against sterling which has caused some problems in the UK. The importing of goods is now more expensive than it has been for some time although on the positive side we have seen an increase, albeit less than expected, in exports. However, is the UK now becoming a target for overseas investors?
A number of Europe's top bankers are currently in discussions regarding the potential creation of a private sector European Recovery Fund which could raise upwards of €20 billion a year to assist with future banking bailouts. It is believed that the significant investment required to fund the operation would effectively allow the banking arena to maintain independence from various governments within Europe and negate the need for government bailout funding in the future. But would this work?
