Tag Archives: business sales

Sell a Business, Pay No Broker Fees

4 Jun

Why market your business with Business Owners Direct?

Our site puts genuine business buyers in direct contact with you!
Your business is yours, you deserve the reward for your hard work, we charge no commissions on sale.


Ready to Sell Your Business?
We offer unlimited amount of text in your advert.
Photos speak a 1000 words.
Email Alert – Business buyers will instantly receive notification your business is live on our site.
With our “Featured Business” option you are more likely to receive enquires quicker.
Access your statistics: Access to your account 24/7 to see the number of views and responses to your Ad.
Our site is highly ranked on Google, buyers will find you.
Large database of registered buyers.
Cost effective & risk free advertising.
All listings linked to Facebook & Twitter for maximum exposure.



Spain has taken painful steps to clean up its banks, but more may yet be needed

6 Dec

European Union regulators approved Spain’s plans to restructure its troubled banks, allowing them to get bail-out funds. One of the lenders, Banco de Valencia, is being sold off for a token €1 ($1.30).
THE delightful (though small) plates of tapas that often accompany an evening drink in Spain can, if eaten with gusto, end up replacing the meal they were meant to precede. After four years of appetiser-sized bank restructurings, bail-outs and reforms, Spain’s banking system may finally be getting its fill of public money.
On November 28th the European Commission approved restructuring plans that will allow it to inject €37 billion ($48 billion) in euro-zone funding into four Spanish banks. The money will allow for a clean-up of bank balance sheets begrimed by dud loans granted to property developers during the inflation of Spain’s colossal property bubble. Many of these loans are now worth just cents on the euro. Yet an earlier refusal by supervisors and banks to recognise the scale of the problem contributed to an erosion of confidence in both banks and in government finances.
Under the new plan, four banks including Bankia, itself the failed product of an earlier half-hearted restructuring of bust regional savings banks, will get cash from two of Europe’s bail-out funds. In return they have promised to cut their balance-sheets, stop lending to risky property developers and focus instead on lending to small and medium-sized businesses.

The sharpest cuts will be at Bankia, which has already been nationalised and which will receive public funds worth almost €18 billion (including €4.5 billion injected into the bank by the state in September). It will cut its branch network by almost 40% and its staff by 28%. Investors in the bank’s debt will also take a hit, with as much as €4.8 billion in additional capital coming from the mandatory swapping of hybrid instruments and subordinated debt for new shares worth less. Across all four banks, holders of hybrid instruments may take a hit of about €10 billion.
Forcing investors in some of the banks’ debt to take losses was a condition imposed by contributors to the bail-out funds to minimise the burden on taxpayers. Yet it will probably prove unpopular in Madrid, since much of this debt is held by tens of thousands of small investors, many of whom bought it after being assured by banks that it was as safe as deposits.
Bankia optimistically hopes to return to profitability next year and to be generating healthy returns by 2015. One bank, Banco de Valencia, was deemed beyond salvation. It will be recapitalised with €4.5 billion and then sold to CaixaBank, Spain’s third-largest bank.
A second key element of the bail-out will be the creation of a new “bad bank” in December. It will take dud loans from those being restructured. The government hopes this will help them regain the confidence of markets. It may also kickstart lending, and help revive an economy that contracted by about 5% in the year to August. Little detail was provided as to exactly how much debt the bad bank, known as Sareb, will take, but officials in Brussels said some €45 billion in Spanish banking assets would be transferred to it.
Officials in Brussels hoped that the markets would welcome the restructuring, saying it would “restore the viability of banks”. Yet even this new recapitalisation and restructuring plan may underestimate the voracious appetite of the Spanish banking system.
A report by staff at the International Monetary Fund (IMF) released on November 28th sounded warnings of further loan losses as Spain’s economy contracts. Losses on corporate loans have already increased sharply, yet those on mortgages remain remarkably subdued (see chart). Some deterioration in these seems likely if, as the IMF expects, house prices contract and unemployment also rises.
The IMF reckons that house prices, which have slumped 30% from their peak, may fall further given the stock of unsold homes and weak growth in household incomes. Unemployment, already at about 25%, may rise to almost 27%, the OECD warned in a separate report this week. The main course of bank restructuring may have been served, but a sour postre (dessert) may still be on the menu.



Xstrata chairman steps down as shareholders reject £140m pay deal

21 Nov

Sir John Bond is to step down as chairman of the £50bn natural resources giant Glencore Xstrata almost as soon as it is created after shareholders finally approved a £50bn takeover of Xstrata by Glencore but rejected “egregious” £140m retention bonuses.

The City grandee and current chairman of Xstrata had been slated to lead the board of the enlarged group but ended up irking his own investors, first by attempting to persuade them to accept Glencore’s initial approach at what was seen as a low price, and then by proposing enhanced terms for the miner’s top managers after one major shareholder forced Glencore into increasing its offer.

Xstrata’s extraordinary general meeting in Zug, Switzerland, approved the takeover.

Afterwards, Bond said in a statement: “In the light of shareholders’ decision not to support the board’s recommendation, I have informed the Xstrata board and Glencore’s current chairman that, once the merger has completed, I intend to instruct the board to commence an orderly process to appoint a new independent chairman of Glencore Xstrata. Upon the satisfactory conclusion of the search process, overseen by the Glencore Xstrata board nominations committee, I will step down.”

While the timing of Bond’s announcement was a surprise, most observers had been expecting him to be ousted shortly after the takeover was completed and it was clear from Tuesday’s votes that many shareholders had been upset by the way the whole process had been handled.

David Trenchard, vice chairman of Knight Vinke, a top 20 shareholder which voted against all Xstrata proposals, called the planned £140m of bonuses for Xstrata bosses “egregious” and indicated Knight Vinke would be spearheading a campaign to ensure shareholders were represented more effectively by the new board.

He told the meeting: “We have no confidence in the independence and robustness of the current Xstrata board. Good governance must now take centre stage. We intend to broaden our discussion with fellow shareholders to ensure that happens.”

Following Bond’s announcement, Trenchard added: “This is the first step of what needed to be done. It is good news.

“The important thing is that the board appoints a sufficiently robust chairman to represent shareholders with what is clearly a strong presence of Glencore on the board.”

In a series of complex votes, investors defeated a plan to increase incentives for Xstrata executives, with 32.15% of voted shares failing to back a proposal that needed 75% of votes in support. A second resolution asking investors to back a takeover without the pay scheme won 78.88% of votes, limping past the 75% threshold for the deal to be approved.

One Xstrata adviser said: “I’m surprised how high the ‘no’ vote was [on the second resolution]. Everyone knew last week [when Qatar Holding said it would back the deal but not the incentive scheme] you had to vote for the second resolution if you wanted the deal to go through.”

The tie-up was approved by 90.08% of shareholders who voted at the EGM. After receiving the news, Bond told the meeting that the takeover had “received shareholder approval”.

The deal will create a mining and commodity trading business with a combined market capitalisation of £50bn. It has taken nine months to get this far, after Glencore chief executive Ivan Glasenberg was forced into a U-turn over price by Qatar Holding, which had built a blocking stake. The impasse was only resolved after former prime minister Tony Blair intervened.

The merger of the miner and the commodity trader now faces regulatory hurdles, including a decision later this week by EU competition officials over whether to open an in-depth investigation.

Earlier in the day, Glencore shareholders had voted overwhelmingly in favour of the long-awaited takeover. As expected, a huge majority of investors supported the tie-up, with 99.4% of those who voted backing the resolution.


Will Britain’s post-recession economy be resurgent, stagnant or greener?

12 Nov

Economic forecasting is a mug’s game. Experts find it next to impossible to predict the next set of quarterly growth figures or the length of the dole queues in the latest month.

Most forecasts are made by extrapolating recent trends and tweaking them a bit, which is why they tend to be wrong when economies are subjected to powerful shocks. Last week, the Paris-based Organisation for Economic Cooperation and Development bravely tried to envisage what the world will look like in 2062. But, as the UK’s recent experience shows, even imagining how things will pan out in 2013 is hard enough.

This time five years ago, the economy was still growing and Gordon Brown contemplated holding a snap general election, before eventually getting cold feet. The Royal Bank of Scotland had just bought ABN Amro in the biggest bank takeover in history. The official cost of borrowing set by the Bank of England was 5.75%. Only economic geeks had heard of quantitative easing.

It would have taken a brave forecaster to say back then that in late 2012 RBS would be largely owned by the British taxpayer, that interest rates would have been at 0.5% for the best part of four years and that the Bank would be sitting on £375bn of gilts bought from the private sector in an attempt to get the economy moving after a deep recession.

It was assumed at the time that all these measures were temporary expedients to deal with what was expected to be a short-lived crisis. Yet there is no immediate likelihood of RBS returning to the private sector, the City thinks that interest rates will remain at 0.5% until at least 2014 and the Bank will not start selling the gilts it bought under the quantitative easing programme until the economy can cope with dearer borrowing.

These forecasts could also prove to be wide of the mark. Although it currently looks unlikely, there is a possibility that all the stimulants pumped into the economy since late 2008 will finally work and that activity will accelerate rapidly. David Cameron may be right when he says that the good news will keep on coming.

In truth, nobody knows what is going to happen over short periods of time, let alone decades. Let’s take the UK as an example. The economy’s performance since the slump of 2008-09 has broken with recent historical precedent, with recovery much slower than was the case after the downturns of the early 1980s and early 1990s. The first quarter of 2013 will be the fifth anniversary of the pre-recession peak in UK output and the economy will still be around 3% smaller than it was in the first quarter of 2008. In 1986, five years after the trough of the recession of the early 1980s recession, the UK was humming. The pattern repeated itself in the 1990s.

It’s tempting to say that the problems of the economy are the fault of the government, either the current one for being too austere or the previous one for being too spendthrift. Tempting but wrong. Something more profound has been going on.

As Dhaval Joshi of BCA Research noted last week, the UK has been the fastest-growing major economy in Europe over the past decade, even after its double-dip recession. The reason for that, though, was simple: Britain went on a borrowing binge.

At the start of the 1990s, the UK’s combined private and public sector debt amounted to 165% of GDP. By 2000, this had climbed to 200% of GDP. Over the next decade it rocketed to 295% of GDP. It was this acceleration in the rate of growth of indebtedness, Joshi says, that provided the strong tailwind for the economy in the years before the financial crisis.

The problem, he adds, is that last decade’s tailwind has become this decade’s headwind. To receive the same boost from credit again, the UK’s debt-to-GDP ratio would need to accelerate again over the next decade, to 450% of GDP. That looks utterly implausible since the private sector is debt-sated and the government is aiming to cut its borrowing.

Seen in this light, the recent performance of the economy looks a lot more comprehensible. Deprived of the impulse it got from credit, the UK’s growth rate has fallen. There is nothing abnormal about quarter after quarter of virtual stagnation; the abnormal period was the pseudo-Ponzi scheme that went before.

Yet the Joshi analysis should be cause for sober reflection rather than deep depression. Let’s try out a few assumptions. The first is that a return to the pre-2007 business as usual model is both desirable and possible; this is fast becoming a minority view, although it does have its adherents.

The second assumption is that a stagnant economy is indeed the new normal but that we should welcome it as it will prevent us from burning up the planet. Greens would argue that Britain could thrive and be happy in a steady-state world provided work, income, wealth, and opportunity were shared more equitably.

The third assumption is that a new growth model will emerge from the wreckage of the old. Historically, this is the most likely scenario and it has often been periods of crisis in the past that have provided the catalyst for change. For example, the 1920s were a troubled decade for Britain with low growth, high unemployment and industrial unrest. Yet in the two decades after the end of the first world war there was a gradual shift in the economy away from the staple industries of cotton, coal and shipbuilding towards light engineering. Then, as now, the world was being changed by technology. Then, as now, the global balance of power was changing.

The crisis has been so powerful and so long-lasting it is easy to believe that the economy is like frozen Narnia under the White Witch. But humans are ingenious and adaptive: a thaw will eventually set in.

On past form, this structural transformation will take time and patience will be needed, particularly given Britain’s misshapen economy. It will be driven primarily by the private sector, although government has the capacity to help or hinder the process. Decisions taken on skills, education, welfare, infrastructure, public procurement, industrial strategy and banking will be crucial in this process and will matter far more than whether George Osborne tweaks fiscal policy in his pre-budget report next month.

The PBR is unlikely to be a bundle of laughs. The chancellor is going to have to admit that growth is weaker and borrowing higher than he had hoped. But it would be unwise and needlessly gloomy to assume Britain in 2022 or 2032 will still be today’s recession-mired basket case.


Karren Brady aims to make Olympic Park home of West Ham football club

7 Nov

Sitting in the Olympic Stadium during this summer’s magical sporting achievements was bitter-sweet for Karren Brady, vice-chairman of Premier League football club West Ham.

Nearly two years ago the club won the battle to take over the running of the stadium after the Games. But that deal was set aside following a legal challenge from London rival Tottenham Hotspur, negotiations continue to drag on and there is still no guarantee West Ham will ever make its home in the Olympic Park, in Stratford, east London.

“It is like being the winner without getting the prize,” says Brady.

She suggests West Ham could provide 1,000 jobs with its plans for the stadium and hundreds more via the redevelopment of its existing stadium, in nearby Upton Park, which would become homes and shops.

Of course, she sees West Ham as the only viable bidder for the stadium which she would convert into a multi-use facility hosting athletics and educational facilities for young people alongside the Premier League club.

She believes that the club could attract 1 million visitors a year to watch football, keeping the whole Olympic Park buzzy.

The project would underpin her plan to transform West Ham’s image into a pillar of the community, together with an aim to back a local Academy school.

“It would be nice to think we changed the culture and created something very special about that football club,” she says.

“We know it’s a big commitment to convert the venue into a truly world class multi-use stadium. We have to invest money that could probably build three brand new Olympic stadiums,” says Brady.

With the mayor of London, Boris Johnson, now in charge of the process anything could happen.

Brady suggests that Virgin’s success in persuading the government to repeal its decision on awarding the west coast mainline contract to First Group after errors were made in considering the bids, means other significant infrastructure deals, including the stadium contract, are now being handled with even more care.

“These decisions are very important to the local community and to us and the processes have to be right otherwise there’s a challenge and it delays it even longer,” she says. Brady denies she is giving the London Legacy Development Corporation a warning, but it would be foolish for anyone to ignore her tough negotiating skills.

She says what drives her is not the money or cachet but the ability to call the shots. “I wanted one thing and that was to be truly independent. I wanted to say when and why and how.”

Growing up, Brady realised independence meant her own money so she skipped university and joined advertising firm Saatchi & Saatchi, setting her on a career path that led her to become the youngest ever boss of a British public limited company.

From the ad agency she got a job selling advertising at London radio station LBC and was head-hunted by David Sullivan to run marketing for his Sunday Sport paper after she persuaded him to buy millions of pounds worth of advertising.

Aged 23, she then talked Sullivan into buying Birmingham City FC out of administration, and putting her in charge. She turned the business around before listing it on the London stock exchange.

For an avowed feminist on a mission to ensure women’s skills and abilities are recognised and rewarded, football was not the easiest road to choose.

After selling Birmingham for £82m in 2009, she admits that arriving at West Ham two years ago was like joining a men-only country club.

“There were no senior women and it was all about cars and membership of the Ivy club. It was all about power and nothing about responsibility,” she says.

Brady remains the only woman on the company’s four-person board but she says half of her senior management team are now female and she is about to hire another woman.

She promoted people from within the business as well as bringing in new blood. “Women were there but they couldn’t see what was under their noses,” she says.

For her, promoting women in the workplace is not just a hobby horse but the key to running a strong business. “The best companies are those with different people from different backgrounds and different experiences,” Brady says.

She points out that football is not just about the game but about finance, pitch maintenance, catering and property.

“We need so many different specific skill sets and it doesn’t matter to us where you get that,” she says. She adds several more female bosses are on track to lead Premier League clubs in the future.

Brady, however, does not believe female boardroom quotas are the right way forward. As a high profile and successful businesswoman, Brady gets offered a number of non-executive directorships every month from companies keen to get some female perspective. But they are all missing the point, she says, which is “to encourage a younger generation of women who can be new investors, businesswomen and directors”.

Rather than quotas, she wants companies who do not have women on their boards to be compelled to explain why not in their annual report.

Beyond that, she says, workplaces need to adapt so that other women do not feel they have to return to work just weeks after having a baby in order to further their career – as she did when she was running Birmingham City.

She would also make childcare a tax deductible expense.

“It would raise more money than it would cost and be a first step in recognising that childcare is important if you are going to work.”

Brady has a small stake in West Ham, but is also a major shareholder in a number of smaller companies including Mentore, a business whose aim is to prepare up and coming female executives for the boardroom.

So would Brady further her cause by working with the government? Scrunching up her nose in disgust at the idea, she says: “I don’t want to be part of some spin, with no power to do anything and no money to do something. I want to see something happen.”.


Huge scale of UK’s ‘dash for gas’ revealed

4 Nov

The amount of power expected to be generated from gas by 2030 has quadrupled in the last year, according to official projections that will infuriate green campaigners who are demanding greater use of renewable energy sources.

They claim that the statistics, buried in recently published government documents, will leave the country unable to meet its carbon emission targets. The figures will reinforce the sense that chancellor George Osborne is winning his battle to downgrade the role of green energy in favour of a dash for gas.

The coalition is divided over energy policy, with Osborne favouring a major increase in gas use, promising generous tax subsidies to the shale gas industry at last month’s Tory party conference. The Liberal Democrats want greater emphasis on renewable energy. The chasm was laid bare last week when Tory energy minister John Hayes declared “enough is enough” over onshore wind farms, only to be slapped down within hours by Lib Dem energy secretary Ed Davey.

Data from the department of energy and climate change show the amount of power being generated from gas by 2030 leapt from 8GW in its 2011 projections to 31GW in the same projections 12 months later. The data also show that, as it stands, the carbon targets for the 2020s – called the fourth carbon budget – will be broken. Less than a tenth of the gas power is projected to have carbon capture and storage technology fitted to trap and bury carbon dioxide emissions.

The revelations come as the coalition’s all-powerful “quad” – David Cameron, George Osborne, Nick Clegg and Danny Alexander – prepare to meet again this week to hammer out a deal on the government’s delayed energy bill, which will set out the UK’s energy sources for decades. The last meeting failed to agree after discussion was dominated by an impromptu pledge from Cameron to legislate to force energy companies to give customers the lowest tariffs.

The continuing uncertainty has led the energy industry to warn that billions of pounds of investment in the economy may be lost.

“The idea that unabated gas is a long-term solution is mistaken,” said Tim Yeo, the Conservative MP and chairman of the energy and climate change select committee. “There is a significant risk in being very dependent on gas in the 2020s because the world price may be much higher than it is now.”

Caroline Flint, Labour’s shadow energy secretary, said: “There is a real risk the government’s dash for gas will blow a hole through our climate change targets, undermine investment in clean energy and leave households vulnerable to price shocks and rising energy bills.”

But Davey said: “We need more gas-fired power stations to keep the lights on, but the vast majority of this will be to replace old polluting plants. It will be alongside new nuclear, CCS [carbon capture and storage] and the continued deployment of renewables, and it will under no circumstances be allowed to jeopardise our legally binding carbon budgets.”

An energy department spokeswoman said: “The projections only take account of policies for which funding has been agreed.”

The Observer has also learned that subsidies for new gas plants are very unlikely to be limited in the way that support for renewables is capped by Treasury rules. The so-called capacity mechanism compensates gas plants for operating intermittently as back-up for increasing amounts of wind and solar power. Ministers believe capacity payments are crucial to keeping the lights on and that a limit would be unworkable.

David Kennedy, chief executive of the Committee on Climate Change, the government’s official advisers, said a capacity mechanism was needed: “But you have to be very careful about its ambition. You don’t want this to trigger a [major] dash for gas and less low carbon investment.” The CCC has warned that extensive use of gas was “incompatible” with carbon targets and could therefore not be government policy.

Friends of the Earth energy campaigner Guy Shrubsole said: “Ed Davey has been caught writing a blank cheque to the gas industry. With the impacts of climate change becoming ever more obvious, this is precisely the wrong time to be committing public money to new fossil fuel investment.”

Last week, when appearing before the energy committee, Hayes declined to confirm that the government would meet a coalition commitment to develop four carbon capture storage demonstration plants. CCS is seen as crucial if the UK is to balance its backing for gas with environmental commitments.

“The government committed to supporting four CCS projects,” said Labour’s shadow energy minister, Tom Greatrex. “Yet this week’s announcement on CCS made no commitment to any support to the four projects.”

Privately, some in government think spending billions of pounds on the four plants would be difficult to justify in the current economic climate. But Stuart Haszeldine, professor of carbon capture and storage at the University of Edinburgh, said it was important that all four schemes went ahead.

Jeff Chapman, chief executive of the Carbon Capture & Storage Association, said: “To select less than four projects will deal another devastating blow to investor confidence.”


Starbucks dismisses tax avoidance claims

2 Nov

Starbucks executives have dismissed charges that it has underpaid its European tax bills.

Politicians in the UK, Germany and France have called for investigations into the coffee company following Reuters reports into the firm’s tax arrangements.

According to the news agency, the firm told investors its European businesses made a $40m (£25m) profit in 2011, but filed accounts that showed a $60m loss.

“We have never avoided paying taxes,” said Michelle Gass, Starbucks European president, as the company announced its latest earnings. She said the company had an “openness and willingness” to discuss its taxes, adding: “We look forward to clarifying our position in the days and weeks to come.”

The Seattle-based company reported a net profit of $359m for the quarter ended 30 September, compared with a year-earlier profit of $358.5m. The company had revenues of $283.7 in Europe and the middle east, slightly less than last year, and reported a loss for the region of $6.5m.

The Starbucks tax controversy comes as politicians and activists continue to highlight tax avoidance tactics used by multinational companies including Amazon and Google, which make significant sums in their UK subsidiaries but pay little in tax.

Starbucks has not paid tax in the UK for three years, Reuters reported last month, adding that it has paid £8.6m of income tax since 1998 on £3.1bn of sales by reporting consistent losses.

Starbucks paid no tax on its UK earnings for the past three years after recording annual losses. But Reuters reported that US executives claimed in telephone calls with investors that the UK business was profitable.

Starbucks has become a target for UK Uncut, the protest group that has targeted banks and firms including Topshop retailer Arcadia and Vodafone, gluing up locks and organising sitins.

The House of Commons public accounts committee has asked senior officials from all three companies to address the issues at a hearing later this month. Margaret Hodge, who chairs the committee, told parliament last month that Apple, eBay, Facebook, Google and Starbucks had avoided nearly £900m of tax.

Prime minister David Cameron responded to the claim by saying: “I’m not happy with the current situation. I think [HM Revenue & Customs] needs to look at it very carefully. We do need to make sure we are encouraging these businesses to invest in our country as they are but they should be paying fair taxes as well.”

Politicians in Germany and France have also called for an explanation.