The move will raise hundreds of millions of pounds for RSA, which desperately needs the cash in order to shore up its capital base. But already, analysts are picking holes in the plan. They say jittery stock markets will reduce the amount of money the float will raise, and question whether RSA should be selling off one of its best-performing businesses. The reality is that it has little choice, and the float is one of a number of drastic measures being taken to restore financial health. RSA?s troubles mean that its shares look very cheap at almost a third of the value of its assets. But we?d leave this potential recovery story alone for now.
The latest in the Six Continents saga is that bidders are coming forward for the pubs part of the business already. At least one private equity house has table a £2.8bn offer for Mitchells and Butlers, as the new company will be called once the leisure group splits up. Laurel Pub Co, which is also backed by private equity, is also interested. Private equity buyers like pub businesses because they generate lots of cash and are backed by freehold assets. Six Continents shareholders should continue to sit tight.
Cable & Wireless, the telecoms group, has appointed a new chief executive. He?s Francesco Caio, an Italian who joins from internet and telecoms company Netscalibur. C&W has surprised the market by managing to attract a relatively well-regarded executive to oversee its rehabilitation. But it?s had to pay; Mr Caio will be paid at least £1m in his first year in charge. And the fundamental outlook remains uncertain; we?d steer clear of the shares despite the recent rally.
Meanwhile, BT has announced a series of price cuts in its residential and broadband businesses. The moves are designed to seize the initiative from the army of resellers and internet service providers who are trying to muscle in on its customer base. But the impact on profits was not discussed.
Boots has abandoned its attempt to bring US-style personal grooming to the High Street. The chain is closing its ?Wellbeing? centres, which offered services chiropody and Botox injections, and it?s also pulling out of many overseas markets. The one-off costs of all this will be around £55m, the company said. We?re not big fans of the shares even though there?s a big dividend yield; there seems little room for further growth in such a mature market, and the company lacks direction as chief executive Steve Russell is on the way out and no replacement has been named.
Does Darwin's theory apply to taxation? Colin ponders...
The EC has been instructed to draft a European Union (EU) directive authorising an EU financial transaction tax, which would apply to ten of the EU’s 28 member states
Accountancy watchdog the FRC has dropped its investigation into the former chief financial officer of Tesco, nearly two years after the supermarket was engulfed in an accounting scandal
Colin imagines how Apple's logo might change in the wake of the EC's ruling over its Irish tax arrangements