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Chase Bank Limits Cash Withdrawals, Bans International... Before you read this report, remember to sign up to http://pennystockpaycheck.com for 100% free stock alerts Chase Bank has moved to limit cash withdrawals while banning business customers from sending...

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Richemont chairman Johann Rupert to take 'grey gap... Billionaire 62-year-old to take 12 months off from Cartier and Montblanc luxury goods groupRichemont's chairman and founder Johann Rupert is to take a year off from September, leaving management of the...

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Cambodia: aftermath of fatal shoe factory collapse... Workers clear rubble following the collapse of a shoe factory in Kampong Speu, Cambodia, on Thursday

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Spate of recent shock departures by 50-something CEOs While the rising financial rewards of running a modern multinational have been well publicised, executive recruiters say the pressures of the job have also been ratcheted upOn approaching his 60th birthday...

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UK Uncut loses legal challenge over Goldman Sachs tax... While judge agreed the deal was 'not a glorious episode in the history of the Revenue', he ruled it was not unlawfulCampaign group UK Uncut Legal Action has lost its high court challenge over the legality...

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Glencore/Xstrata battle likely to get bloodier

Category : Business

Glasenberg’s 11th-hour tactics are brilliant or outrageous depending on whose camp you’re in

Welcome to the world of mergers and acquisitions, Mr Blair. You’ve picked a corker – a deal that threatens to become the nastiest and most bitter we’ve seen for years. The decades-old friendship-cum-jolly-rivalry between Glencore’s Ivan Glasenberg and Xstrata’s Mick Davis already looks to be dead. And in the middle of the drama stand your friends from Qatar, who will settle the outcome.

Glasenberg’s hardball, 11th-hour tactics are brilliant or outrageous, depending on whose camp you’re in. The arch-trader may be close to pulling off a coup, albeit after being forced by the Qataris to blink on price. But it’s still possible that he has shot himself in the foot and the deal will collapse. Odds? Probably 70/30 that Glencore prevails: might usually does when the gloves come off in City battles.

The indisputable fact is that the Glencore boss spent seven months pursuing a friendly “merger of equals” but then threatened to turn the transaction into a takeover on the morning of the shareholder vote. He upped to 3.05 from 2.8 the number of new Glencore shares to be issued for each of Xstrata’s to satisfy Qatar Holding’s demand for better terms. But then – critically – he insisted on being chief executive, ripping up the original arrangement with Xstrata that Davis would be the boss.

Where’s the problem, it may be asked. If Glencore is finally paying up, doesn’t Glasenberg have the right to take the top job? And wasn’t the original idea that he would work as Davis’s deputy just a polite fiction? That’s the view from the Glencore camp. But it’s problematic in two ways.

First, did Glasenberg spell out to Qatar that he would insist on being chief executive? It may seem incredible that he failed to do so, but that’s the claim from some in the Qatari camp. It may be a misunderstanding over the timing of Glasenberg’s elevation. Or perhaps squeamishness in Qatari quarters about elbowing out Davis, whom they had previously supported publicly.

Whatever the reality, there is no way Davis will accept relegation, especially after Friday’s drama. And several of his lieutenants may also depart if a takeover happens. That prospect may yet terrify the Qataris into rejecting Glencore’s formal proposal.

Second, if the deal is now a cold-blooded takeover, where is the proper takeover premium? That’s the question the Xstrata board asked, once it had overcome its shock. A 17% premium, it said, is “significantly lower than would be expected in a takeover”. But, of course, chairman Sir John Bond is in an excruciating position. He agreed to trade the firm at a 2.8 ratio, despite objections from Qatar and several other shareholders, so it is hard now to claim that 3.05 is not enough.

Bond’s position can only be squared if you accept his other argument, that it was safe for Xstrata investors to accept Glencore shares only if Xstrata managers were on hand to run the mines. That was the basis on which Bond proposed and defended the £170m retention package for Xstrata’s top 80 executives. To many outsiders, the package looked greedy. But for Bond it was an essential safeguard. It is hard to see how he can now recommend Glencore’s new offer and retain his (already damaged) credibility.

And if Xstrata’s board won’t recommend capitulation, this tale could become a lot messier. Those odds may yet change.

Glencore and Xstrata? Morrisons and quiches? This could all end in tears

Category : Business

On the agenda this week: a big decision in the mining industry, and fears for sales figures at the supermarket

Glencore boss Ivan Glasenberg is supposedly one of the world’s shrewdest traders, so he’ll be acutely aware of the choice facing him this week: either he performs a humiliating volte-face by increasing his bid for the mining group Xstrata, or he must risk never having complete control of an asset so coveted that he was prepared to put his notoriously secretive company through the irritation of a public listing to get it.

We will know which trade-off he’s plumped for by Friday, when Xstrata shareholders are due to vote on Glencore’s plan to combine the pair into a £53bn natural resources giant – although the latest opinion polls suggest the scheme is set for a comprehensive defeat.

Still, there remains a chance that Glasenberg will sacrifice his reputation to land the prize (and save Xstrata’s obedient board from the vengeance of their own shareholders). But should Glasenberg be considering a late increase to his bid, then he needs to be reminded of the perils of dawdling.

As a young man, the commodity trader almost competed as a speed-walker in the 1984 Olympics. Apartheid meant that his native South Africa was barred from the games but, with his Jewish ancestry, he sought to go as an Israeli. Sadly, Glasenberg failed to complete his paperwork in time.

Rising quiche but falling sales at Morrisons

In one of his adverts for the supermarket chain Morrisons, England cricket hero Andrew “Freddie” Flintoff takes a bunch of young children on a shopping trip for a party. As they fill up the trolley with hearty favourites such as joints of British beef, hot cross buns and cupcakes, Freddie suddenly stops his group on the way to the checkout and asks: “Did you get the quiche?”

It is hardly the worst gag you’ll be subjected to in a supermarket commercial (that remains the most fiercely competitive field in the industry) but the supposed joke of a lad from Preston fancying such fare now seems to be on the retailer.

The company unveils its interim results this week with City analysts expecting dire numbers, including falling like-for-like sales.

Among the criticisms are the usual concerns about the chain’s lack of online shopping and convenience stores, as well as the Bradford-based grocer suddenly appearing to have abandoned its core customer by trying to become too posh. Veg counters spewing out dry ice seem the most obvious irritant – meaning (to butcher another of the group’s old ads) there are fewer reasons to shop at Morrisons.

How long have we got to save the euro now?

In January 2011, Hungary’s prime minister Viktor Orbán reckoned there was six months to “save the euro”. By June, the schedule still held, as a meeting between Germany’s chancellor Angela Merkel and France’s then president, Nicolas Sarkozy, prompted headlines hinting there was just “45 minutes” to do the same. So we should perhaps be mildly sceptical in 2012 about suggestions that European Central Bank president Mario Draghi now has two weeks to try again.

Still, having promised to do “whatever it takes” to save the currency in July, Draghi now faces an important fortnight in which he needs to justify bondholders’ recent optimism that he’s managed to unearth a plausible euro solution while on his summer holidays. The next two weeks potentially will see fresh ECB bond-buying measures, a Spanish plea for aid, plus clues about whether the market will raise its boot from Greece’s throat and ease the terms of its bailout. Meanwhile, German judges and Dutch voters will also get a say on the currency’s future (or otherwise).

Amid all that, Draghi convenes the ECB’s governing council on Thursday, with analysts daring to dream he’ll utter the magic word “unlimited”. That’s as in ECB intervention, not supposed deadlines.

Making a marque

They used to say that Range Rovers had heated rear windscreens to keep their owners’ hands warm as they pushed them home, but the marque’s reputation has been transformed since then.

Nowadays Jaguar Land Rover, which makes the beasts, is lauded as that highly unusual case of a British manufacturing success story (albeit one that, rather less unusually, is foreign owned).

The company has recently hired an extra 1,000 workers at its Halewood plant in Merseyside to launch a three-shift, 24-hour operation – as the carmaker attempts to satisfy demand for its new Range Rover Evoque, which is very popular despite a tie-up with Victoria Beckham.

This week will also see the manufacturer unveil its latest line, “the all new Range Rover”, a model made in Solihull and which the company boasts “has delivered significant enhancements in performance and agility”. That’s more than can be said for British manufacturing, as yet another depressing purchasing managers’ index is expected to show tomorrow.

Glencore and Xstrata? Morrisons and quiches? This could all end in tears

Category : Business

On the agenda this week: a big decision in the mining industry, and fears for sales figures at the supermarket

Glencore boss Ivan Glasenberg is supposedly one of the world’s shrewdest traders, so he’ll be acutely aware of the choice facing him this week: either he performs a humiliating volte-face by increasing his bid for the mining group Xstrata, or he must risk never having complete control of an asset so coveted that he was prepared to put his notoriously secretive company through the irritation of a public listing to get it.

We will know which trade-off he’s plumped for by Friday, when Xstrata shareholders are due to vote on Glencore’s plan to combine the pair into a £53bn natural resources giant – although the latest opinion polls suggest the scheme is set for a comprehensive defeat.

Still, there remains a chance that Glasenberg will sacrifice his reputation to land the prize (and save Xstrata’s obedient board from the vengeance of their own shareholders). But should Glasenberg be considering a late increase to his bid, then he needs to be reminded of the perils of dawdling.

As a young man, the commodity trader almost competed as a speed-walker in the 1984 Olympics. Apartheid meant that his native South Africa was barred from the games but, with his Jewish ancestry, he sought to go as an Israeli. Sadly, Glasenberg failed to complete his paperwork in time.

Rising quiche but falling sales at Morrisons

In one of his adverts for the supermarket chain Morrisons, England cricket hero Andrew “Freddie” Flintoff takes a bunch of young children on a shopping trip for a party. As they fill up the trolley with hearty favourites such as joints of British beef, hot cross buns and cupcakes, Freddie suddenly stops his group on the way to the checkout and asks: “Did you get the quiche?”

It is hardly the worst gag you’ll be subjected to in a supermarket commercial (that remains the most fiercely competitive field in the industry) but the supposed joke of a lad from Preston fancying such fare now seems to be on the retailer.

The company unveils its interim results this week with City analysts expecting dire numbers, including falling like-for-like sales.

Among the criticisms are the usual concerns about the chain’s lack of online shopping and convenience stores, as well as the Bradford-based grocer suddenly appearing to have abandoned its core customer by trying to become too posh. Veg counters spewing out dry ice seem the most obvious irritant – meaning (to butcher another of the group’s old ads) there are fewer reasons to shop at Morrisons.

How long have we got to save the euro now?

In January 2011, Hungary’s prime minister Viktor Orbán reckoned there was six months to “save the euro”. By June, the schedule still held, as a meeting between Germany’s chancellor Angela Merkel and France’s then president, Nicolas Sarkozy, prompted headlines hinting there was just “45 minutes” to do the same. So we should perhaps be mildly sceptical in 2012 about suggestions that European Central Bank president Mario Draghi now has two weeks to try again.

Still, having promised to do “whatever it takes” to save the currency in July, Draghi now faces an important fortnight in which he needs to justify bondholders’ recent optimism that he’s managed to unearth a plausible euro solution while on his summer holidays. The next two weeks potentially will see fresh ECB bond-buying measures, a Spanish plea for aid, plus clues about whether the market will raise its boot from Greece’s throat and ease the terms of its bailout. Meanwhile, German judges and Dutch voters will also get a say on the currency’s future (or otherwise).

Amid all that, Draghi convenes the ECB’s governing council on Thursday, with analysts daring to dream he’ll utter the magic word “unlimited”. That’s as in ECB intervention, not supposed deadlines.

Making a marque

They used to say that Range Rovers had heated rear windscreens to keep their owners’ hands warm as they pushed them home, but the marque’s reputation has been transformed since then.

Nowadays Jaguar Land Rover, which makes the beasts, is lauded as that highly unusual case of a British manufacturing success story (albeit one that, rather less unusually, is foreign owned).

The company has recently hired an extra 1,000 workers at its Halewood plant in Merseyside to launch a three-shift, 24-hour operation – as the carmaker attempts to satisfy demand for its new Range Rover Evoque, which is very popular despite a tie-up with Victoria Beckham.

This week will also see the manufacturer unveil its latest line, “the all new Range Rover”, a model made in Solihull and which the company boasts “has delivered significant enhancements in performance and agility”. That’s more than can be said for British manufacturing, as yet another depressing purchasing managers’ index is expected to show tomorrow.

Xstrata shareholders send Ivan Glasenberg a message

Category : Business

Opposition to Glencore’s all-share takeover bid appears to be growing – at least at the current price

Xstrata’s shareholders, or some of them, are in unco-operative mood, which is not welcome news for Ivan Glasenberg, Glencore’s chief executive, as he pursues his lowball all-share takeover attempt.

The chunky 19% vote against David Rough, head of Xstrata’s pay committee, was the highlight of the results from the annual meeting. But there was also a 13% vote against Glasenberg’s re-election to the board of Xstrata, on which he sits by virtue of Glencore’s right to appoint three directors to reflect its 35% shareholding. Given that Glencore will have voted its shares in support of its boss, a 13% refusal counts as a big score. It is also significantly more than the thin 3.75% opposition to Glasenberg a year ago.

When it comes to Glencore’s takeover offer, the bidder is not allowed to vote its shares. So Tuesday’s Xstrata rebels, if they dislike Glasenberg’s terms as much as his presence on their board, will enjoy a louder voice. Glencore’s 75% hurdle for success looks a stretch.

In truth, one didn’t have to see Tuesday’s voting to reach that conclusion. Behind the scenes, most fund managers who regard the bid ratio (2.8 Glencore shares for every Xstrata share) as mean appear unmoved by Glasenberg’s charm offensive. They think he’s testing the water to see what he has to pay to bag his longed-for prey. They’re probably right – and there’s no harm in giving Glasenberg a prod via an unrelated vote.

Glencore and Xstrata to set off on global investor road show

Category : Business

News of charm offensive came as Glencore announced first set of full-year results as public company – and gave no indication it would sweeten its $37bn offer

Ivan Glasenberg, the multi-billionaire chief executive of commodity trader Glencore, is to embark on a global investor road show with Xstrata boss Mick Davis in an effort to win over investors reluctant to back their $37bn (£23bn) “merger of equals”.

News of the planned charm offensive came as Glencore announced its first set of full-year results as a public company, in which it gave no indication that it would sweeten its offer for the miner Xtrata.

Glasenberg said: “In April Mike [Davis] and myself will go on a road show to convince investors … A lot of Xstrata shareholders are not shareholders of Glencore. A lot think Glencore has not got ‘tier one’ assets. We have got to educate them that Glencore has got tier one assets.”

The company, which released an estimate for 2011 profits last month, confirmed those results, with net income up 7% to $4.06bn and a 28% rise in revenues to $186bn. It will pay a total dividend for the year of 15 cents a share, which will mean that Glasenberg – who is the biggest shareholder with a 15% stake – will receive a dividend of $109m.

The chief executive added that he had declined a potential bonus of £1.8m, on the grounds that he receives the “most benefit from the growth of the company”.

Glencore is offering 2.8 new shares for every Xstrata share it does not already own – about two thirds of the company. Some analysts believe Glencore, the world’s largest commodities trader, is likely to improve its offer in April, with Andrew Keen at HSBC saying 3.3 Glencore shares would be a fairer level. In April, documentation about the proposed tie-up will be sent to investors ahead of a vote in May.

However, Glasenberg said the current offer was fair for all shareholders and insisted: “It ain’t a takeover, it’s a merger of equals”.

When asked why Glencore is offering a premium to Xstrata shareholders if the companies really are equal, he replied: “Mike [Davis] is a hard negotiator”. He also pointed out that Xstrata executives will get most of the senior jobs.

The latest efforts by Glasenberg to sell the Xstrata merger – a deal which was widely understood to be the reason the company floated last year – came as Zambia closed a copper treatment plant belonging to Glencore’s Mopani Copper Mines for pollution violations.

Glencore, which has previously been hit with a host of unwanted headlines involving Mopani over allegations that it has avoided paying £100m in local taxes, said in a statement it was surprised at the action by the environmental agency and implied it may be forced to lay off staff following the closure.

“The last visit by the Zambian Environmental Management Agency was in early February and the license was duly renewed on 21 February,” a Glencore spokesman said.

“We are therefore surprised that we are currently required to suspend this project, which we believe may be due to recent unsubstantiated reports in the local press. We are working to resolve this situation as quickly as possible, not least because over 300 jobs depend on it. This project accounts for about 1.5% of Mopani’s total production”.

Glencore has always denied it owed any taxes to Zambia. Glasenberg, who did not rule out appearing in front of UK MPs conducting an enquiry on taxation in developing countries, insisted that Mopani taxes were no longer an issue in Zambia.

Shares in Glencore edged down 0.1p yesterday to 403.45p. They floated at 530p just under a year ago.

Glencore chief protests too much

Category : Business

Ivan Glasenberg is likely to offer some form of sweetener to persuade reluctant Xstrata shareholders to agree to the takeover – but he’ll deny it until it happens

Ivan Glasenberg protests too much. He used the phrase “merger of equals” at every opportunity, as if mere repetition would persuade Xstrata’s suspicious shareholders to be grateful for the modest takeover premium (8% on one basic yardstick) that Glencore is offering for their firm.

In reality, the “naysayers” as Glencore’s chief executive called them, heard little to encourage them to say yes to a deal structured as an offer of 2.8 Glencore shares for every Xstrata share. There was nothing wrong with Glencore’s full-year results – profits, ignoring exceptional items, were up 7% at $4.06bn (£2.6bn), as expected – but nor were there any great revelations about the quality of its assets.

How could there be? Glasenberg can say until he’s blue in the face that his copper assets in the Democratic Republic of Congo are “tier one” but, if you’re a sceptical Xstrata shareholder, it’s political risk that bothers you – and there’s little Glasenberg can say on that score to reassure.

As for Glencore’s trading business, everybody accepts that it’s more than “a bunch of speculators,” as Glasenberg caricatured the sceptics’ view. But the doubters ask subtler questions. Will opportunities for arbitrage diminish as the greater price transparency, and use of spot markets, sweeps through the world of commodities? If so, doesn’t Glasenberg’s rush to combine with Xstrata at the first post-flotation opportunity betray the fear that in future it will be better to be a pure owner of physical assets, as Xstrata is, rather than a trading, owning and distributing conglomerate?

In the end, the debate will come down to bald arithmetic. Glencore needs a 75% majority to succeed and can’t vote its own 34% shareholding in Xstrata, so a collection of 16.5% of refuseniks in the Xstrata camp could block the deal. “In our view, Glencore wants this deal more than the recalcitrant end of Xstrata’s register and some form of a sweetener is likely to ensure the 75% voting threshold is reached,” says HSBC’s analyst Andrew Keen. That sounds like commonsense.

Glasenberg, of course, would be foolish to offer any hint in advance that he is prepared to give ground: indignation at the very idea will be maintained up until the moment of the U-turn. But having conceded that some form of premium is required to get the deal done, Glasenberg shouldn’t sound so surprised that some of Xstrata’s investors want to push him on price. He’s a trader, and traders rarely open with their best offer.

Glencore and Xstrata’s chief executives’ links go back to university days

Category : Business

The real drivers behind the deal were Ivan Glasenberg, chief executive of Glencore and his Xstrata counterpart Mick Davis

To prevent leaks, the codename for the takeover of Xstrata by Glencore was “Everest”. The name was apt – both Sir John Bond, the chairman of Xstrata, and Simon Murray, the chairman of Glencore, are keen mountaineers.

Bond’s daughter Annabelle is an accomplished mountaineer who has scaled Everest – a feat that prompted him to visit the base camp.

Bond, who is best known for his four decade career at HSBC, is to become chairman of the enlarged mining and trading organisation. An international banker, his HSBC career began in Hong Kong where he arrived having earned his sea passage from California by mopping floors on the ship.

It was not immediately clear what role would be handed to Murray, who once sat on the board of Vodafone, where Bond has also been chairman. Murray caused a row over sexism shortly after he was appointed chairman of Glencore to help facilitate its stock market flotation, when he said women were a risk to hire because they took nine months off to have children.

Murray and Bond, both septuagenarians, are thought to be well acquainted through connections in Hong Kong, though sources close to the deal insisted they were bit part players in the talks. The real drivers were Ivan Glasenberg, chief executive of Glencore, and his counterpart Mick Davis. Despite the fact that Glencore is in effect taking over Xstrata, Davis comes out top as chief executive with Glasenberg as his deputy. The pair have known each other since their days at Witwatersrand University in South Africa but have not always seen eye to eye.

Until last year Glencore was kept private, away from the glare of the stock market, while Xstrata was a public company embarking on high profile acquisitions. Glencore, which owns 34% of Xstrata, made life tricky for Davis during a rights issue in which it refused to participate in the cash call.

The flotation of Glencore last year marked the beginnings of the rehabilitation of Tony Hayward, the former chief executive of BP whose reputation was undermined by the Gulf of Mexico disaster. He became a non-executive director of Glencore as the company listed, and then popped up as a partner to the billionaire financier Nat Rothschild in an oil venture called Vallares. There is speculation Hayward will take on the crucial role of senior independent director of the enlarged company, though it was not clear last night whether he had secured that role over David Rough, the former fund manager who holds the same position at Xstrata.

The Rothshild connections run deep. Rothschild is a personal friend of Glasenberg’s. Before Glencore appointed Murray as chairman, Glasenberg called Rothschild to obtain Murray’s mobile phone number.

Meanwhile, Glasenberg sits on the board of Rusal, the aluminium group run by Rothschild’s close contact Oleg Deripaska and where Glencore and Rothschild are leading investors. Rothschild was also a pre-flotation investor in Glencore, while the prospectus of Rothschild’s coal mining group Vallar mentions Glencore 73 times, an indication of the importance of the trading group’s long-term marketing deals with the group’s assets.