Sunday newspaper round-up: BT, Shire, Sainsbury's, Laird

A handful of much-anticipated deals could be announced in the coming week, according to the Sunday newspapers, including BT's acquisition of EE, Shire's takeover of Baxalta and Sainsbury's follow up offer for Home Retail.

BT's acquisition of mobile phone network EE will be given final regulatory go-ahead this week. The Sunday Times said the Competition & Markets Authority (CMA) was expected to approve BT's £12.5bn takeover despite objections by rivals Sky and TalkTalk.

Shire has agreed its £22bn takeover of US target Baxalta and will announce the deal this week, said the Sunday Times. According to sources, the FTSE 100 pharmaceutical group will pay roughly $48 a share, with as much as 40% — or £8.8bn — paid in cash.

Laird, the FTSE 250 electronics company that is a major component supplier to Apple, has become an early-stage takeover target for Connecticut-based electronics giant Amphenol. The company would fetch at least £1.2bn, City sources told the Sunday Telegraph, with Amphenol understood to have been attracted by Laird’s discount relative to industry peers.

Anglo American will launch an auction for its most valuable asset in the coming week, the Sunday Times wrote, with its $1bn Brazilian niobium and phosphate operation put on the block. The massive mining group, whose shares tumbled by a fifth last week, revealed in November that it planned to raise cash by selling two-thirds of its mines and axing 85,000 jobs.

Sainsbury's has launched a charm offensive ahead of what is rumoured could be a £1.2bn follow-up offer for Home Retail this week, though institutional shareholders in the target are looking for a fee nearer £1.4bn, said the Mail on Sunday. Sainsbury's boss Mike Coupe, who has already begun lining up a buyer for Home's Homebase business, will speak publicly on Wednesday as the supermarket unveils its Christmas trading statement.

The Sunday Times wrote that Sainsbury's will need to pay more than £1.6bn to buy the Argos owner, possibly as much as 220p a share, after several backers laughed off the initial bid at around £1.1bn. The newspaper was told by three big shareholders they wanted at least 200p a share, north of £1.6bn, with one City insider describing such demands as unreasonable and another arguing that Home Retail could be worth much more if broken up.

Elsewhere, competition in the dog-eat-dog supermarket sector becomes ever fiercer, with Asda revealing it plans to inject £500m into discounting products even further. “There is currently no growth in the food market and the rise of the discounters means that we must take radical action to win back our customers,” chief executive Andy Clarke told the Sunday Telegraph.

The head of the Financial Conduct Authority has denied it has gone soft on the banking sector and will continue to take tough action against financial institutions who breach the rules, the Sunday Telegraph reported. Tracey McDermott, the interim chief executive of the City watchdog, said: "We're not going soft on the banks, we're not being told what to do by the government."

City traders now predict UK interest rates will not be lifted by the Bank of England until 2017 due to the continued low oil prices and global equity turmoil. While only a week ago, trader consensus was for an autumn 2016 rise, according to sterling overnight interest rates rising falling from 65% to 45%, the Sunday Times wrote.

A major house price correction could come in 2016, as central bank monetary expansion ends and the worldwide economy slows, said the Sunday Telegraph. Commodity prices such as oil have slumped, followed by share prices stalling last year, while the fundamentals of demand and supply in UK housing will undergo a huge shift in the year ahead, the newspaper argued, as the benefits of buy-to-let have been killed off along with demand from overseas buyers from Russia, China and the Middle East.

Royal Dutch Shell chief executive Ben van Beurden expressed his confidence the oil price will more than double in time, with Shell needing Brent crude to return to the low $60s for its acquisition of BG to make financial sense. He told the Sunday Times he was “very, very confident” oil prices would bounce back as they were "not sustainable”.

Encapsulating the dire straits of the UK oil and gas industry, the London-listed entire 112 companies are, when excluding Shell, BP and BG, today worth the same as Marks & Spencer's £7bn, said the Sunday Times. In the North Sea this has led to a disastrous contraction of an industry that employs more than 375,000 people, creating a massive black hole in 2016 tax revenue and leaving many well managed companies simply hit by weak oil prices being indiscriminately lumped by investors in the same boat as those that are truly mismanaged.

Insurers that snoop on customers using sites such as Facebook, Twitter and Linked could be hit by a crackdown by the Financial Conduct Authority. The FCA last week completed an initial study examining how insurers use information gathered from the internet to set premiums, wrote the Sunday Times.

Apple is under pressure from major European telecoms networks to make it easier for customers to switch from the iPhone to smartphones that use Google’s Android software, the Sunday Telegraph wrote. According to a senior industry source, Apple has privately agreed to develop a simple tool to help consumers shift data such as contacts, music and photos if they move to Android.

Heathrow Airport has paid its owners £2.1bn in dividends since 2012 but has handed the taxman only £24m due to the huge debts used when it was taken over by a consortium led by Spanish infrastructure giant Ferrovial in 2006 almost a decade, the Sunday Times wrote. Strip away the interest payments on the £12.5bn of loans, which can be set against profits to leave almost no corporation tax, and the airport is a gold mine, with profits of £839m in 2014 on £2.7bn revenues.

Chancellor George Osborne looks like he might have to push back his plans for a £2bn March sale of Lloyds Banking Group until this summer due to the recent stock market turmoil. Shares in Lloyds closed at 68.9p on Friday, noted the Mail on Sunday, below the 73.6p level at which the Government breaks even on its investment.

The investment arm of challenger bank Shawbrook has invested £30m in a firm specialising in proton beam therapy – the form of radiotherapy that made headlines in the case of Ashya King. Shawbrook Asset Finance backed Proton Partners International, which is building the first dedicated proton beam therapy centres in the UK.

PayPal's business lending arm has provided £690m to small firms since launching in 2013, with demand having tripled in the past year. The unit, which lends around 15% of its total outside the US, initially offered £20,000 at a time but the limit has been upped to £50,000, the Mail on Sunday said.