Hello investors, welcome back to TSB's IPO. Lloyds Banking Group
has announced its intention to float a 25pc stake in its resurrected
TSB subsidiary. The partial sale, which is expected to value Britain's
seventh biggest bank at £1.5bn, has been set for next month with the
prospectus due in mid-June. The float will be the culmination of a
three-year effort by Lloyds to sell the 631 branches it was ordered to
off-load by competition authorities in Brussels after it bought HBOS in
2008. Plan A was to sell the branches to the Co-Op Bank, but that was
before the Co-Op discovered its £1.5bn blackhole. Instead the old TSB
brand was dusted down and relaunched as a new bank. Paul Pester,
chief executive of TSB, has declared a "significant milestone in our
journey to create a new competitive force in UK banking." He wants to
grow the bank's balance sheet by 40pc to 50pc through current accounts
and mortgages. Still, there will be a degree of nervousness about the
float after the apparent cooling of the IPO market. Last week Saga's IPO had a lukewarm response while the retailer Fat Face scrapped
its plans to list admit lack of demand. Like Saga, TSB is ready to
tempt investors by offering bonus shares to those who hold the stock for
more than a year. Still, the company is not expected to pay dividends
for three years which could put off some punters. We'll have the updates
on our business website here.
In other company announcements, both Pfizer and AstraZeneca
have released statements following the passing of the Takeover Panel
deadline last night which officially killed the £63bn deal. Ian Read,
boss of Pfizer, has said: "We continue to believe that our final
proposal was compelling and represented full value for AstraZeneca." Mr
Read was more punchy when he talked to the Telegraph last night: he has hit out against the UK's "overly complicated and overly bureaucratic" Takeover Code. The pressure in on AstraZeneca to prove that he's wrong and they were right. Lief Johansson,
chairman of AstraZeneca, has said the company "welcome the opportunity
to continue building on the momentum we have already demonstrated as an
The soft drinks group AG Barr has
reported a 5.2pc increase in revenues for the past 15 weeks in trading
update ahead of its annual meeting in Glasgow today. The owner of Irn
Bru has said its chairman Ronnie Hanna will announce his
intention to retire after five years in the job. He will be replaced by
John Nicolson, senior non-executive director. Directors are also likely
to be quizzed on their views on the impact on the company of the
Scottish independence referendum.
Armour Group has announced the departure of its finance director, John Harris.
The company says the move follows the sale of its automotive division
in March which "has resulted in a significant reduction in the size of
the group." Johnston Press is holding a general meeting for shareholders to vote on its proposed £360m capital refinancing plan.
Europe continues to dominate the headlines. The European Parliamentary
elections have dealt a bloody nose to mainstream political parties
across Europe, but business leaders are alarmed after the weekend's
"earthquake" too. Michael Hintze, the hedge fund boss of CQS, and Sir Rocco Forte, the hotel owner, are among
a list of business signatories to a letter to The Telegraph this
morning who have demanded a strong Government response to the rise of
UKIP. They have called for "all parties to spell out their vision for a reformed EU". David Cameron
has spent the weekend promising to secure reform in Brussels before an
in/out referendum. His work will start tonight at an informal dinner for
EU heads of state in Brussels. The PM will join Angela Merkel, Francois Hollande and the European Council President, Herman van Rompoy
at what promises to be a sombre affair. Official business includes
discussing the process of proposing a candidate for the European
Commission presidency but the talk will also be about the clear
disillusionment with the entire European project. The question is, will
anything actually change? Meanwhile, Ed Miliband is expected to make a speech on the aftermath of the local elections.
The CBI is
launching its Services Sector survey, its quarterly report on
accountancy, legla and market firms as well as the consumer service,
such as travel, leisure and restaurants. At 930am the British Bankers Association is releasing its latest statistics on mortgage lending, personal deposits, and unsecured lending.
And the Government has claimed its crackdown on tax avoidance is working. HMRC
has said it has raised an extra £23.9bn in additional tax in the year
to March as a result of investigations. The figure is almost £1bn higher
than the target set by George Osborne is his Autumn Statement last
year. "The Government is determined to tackle the minority that seek to
avoid paying the taxes they owe," said David Gauke, the Treasury minister.
QUOTE OF THE DAY
UK's takeover rules are overly complicated and overly bureaucratic.
They were put in place to be in the best interests of shareholders. I
don’t necessarily believe they serve that function.
The FTSE 100 last week fell 40.06 to 6815.75. Markets will reopen today after the Spring Bank Holiday.
Last week in the US, the Dow Jones Industrial Average gained 114.96 points to 16,606.27 while the S&P 500 climbed 22.67 points to 1,900.53. Wall Street will reopen today after yesterday's Memorial Day break.
BEST OF THE BROKER NOTES
Kathleen Brooks at currency trader Forex.com
says the bond markets will be worth watching today following the lurch
to the right in Europe signaled by this weekend's election results:
is worth watching how French yields perform in the coming days, and
whether the big win for the Marine LePen's National Front triggers an
increase in its risk premiums. If French yields creep higher, this could
increase volatility, which could weigh on stocks and the EUR in the
Brent crude oil fell 0.16pc to $110.26 a barrel. Gold remained steady at $1,292 an ounce. More here.
THE MONEY MARKETS
Sterling fell 0.15 cents against the euro to €1.2340 and rose 0.04 cents against the dollar to $1.6846. More here.