Finance Update
Tue 16 Feb 2010
Babcock reveals bold £1.14bn offer for VT
Babcock International, the engineering support services group, yesterday revealed a £1.14bn offer for VT Group, the support services company currently involved in its own takeover battle for a smaller rival.
Babcock stated that it had made a proposal to VT's Board last week worth 633.9p per VT share last Friday but the approach was rejected.
Japan GDP rises 1.1%
Japan has stated that a double dip recession was becoming increasingly unlikely after data proved the economy was growing faster than expected towards the end of 2009.
Japan's gross product increased by 1.1% in the last quarter of 2009 compared to previous months. This has been driven by a marked recovery in exports and improving domestic demand.
Naoto Kan, the finance minister, remained cautious over the recovery and stated it may be time to consider tax rises in Japan.
New era for mutuals
The mutual life assurance industry is likely to undergo dramatic changes once the regulatory scrutiny is finished.
The Chrysalis Project which was kicked off by the mutuals, led the Financial Services Authority to send a "Dear CEO.." letter last year, which focused on decline in with-profits business and its impact impact on some of the mutuals.
The regulator is going through the responses, but the with-profits issue is just one of the challenges facing mutual life assurers, which are normally owned by the policy holders.
Lenders bet on Gala
Lenders to Gala Coral have agreed to a £175m capital infusion as part of a debt restructuring.
Just recently, two of the leading lender groups have discussed restructuring Gala, after an initial plan that had not been formally agreed was dodged by lenders seeking an injection of fresh funds.
A group of lenders, including Alcentra, Lloyds Banking Group and RBS have been in discussion with investors who bought into the company's debt in an attempt to try and take control.
Mobile Alliance
Nokia and Intel have unveiled plans for a new operating system to power smartphones and netbook computers in an attempt to catch up with Apple and Google.
Nokia, the worlds largest mobile maker, has faced criticism that it lacks a handset to competitor Apple's iPhone. A new platform called MeeGo could enable Nokia to improve its weak position in high-end smartphones. This platform could also help Intel to finally break into the mobile market after several failed attempts.
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