Sunday newspaper round-up: Tesco, RBS, Ocado, Aramco, Wood Group

After a terrorist attack on London Bridge where seven people were killed, over 40 injured and three attackers shot deal, campaigning in the general election was halted for the second time since the vote was called in April, adding further uncertainty to a race that already had become increasingly hard to call. While local work such as leafleting would continue, the Conservatives said they have decided not to campaign nationally on Sunday, while Labour said the party would resume campaigning on Sunday evening as delay any longer would disrupt the democratic process.

One of the rebel shareholders objecting to Tesco’s £3.7bn takeover of Booker claims he has not spoken to a single investor in the supermarket giant who wholeheartedly approves of the deal. Daniel O’Keefe, of hedge fund Artisan Partners, and City investment giant Schroders have publicly warned that the acquisition of Britain’s biggest wholesaler by Tesco will damage the grocer’s turnaround, the Sunday Telegraph reported.

Royal Bank of Scotland could be forced to increase its settlement offer to diehard shareholders, who are suing the bank, after it emerged that they are close to securing sufficient funds to continue their court action against the taxpayer-backed lender. The shareholders claim that RBS and its directors misled them about the bank’s financial health in the prospectus for its ill-fated £12bn rights issue in 2008, the Sunday Times reported.

Ocado has taken its first tentative steps abroad by striking a long-awaited overseas deal with a mystery regional European retailer to help it set up an online grocery delivery service. The FTSE 250 business, which works with Morrisons and Waitrose in Britain, announced it had signed an agreement to provide the unidentified company with its proprietary software, “know-how and support services”, the Sunday Telegraph noted.

The City’s top fund managers are attempting to torpedo Saudi Arabia’s attempts to list 5% of its $2 trillion state oil company Saudi Aramco on the London Stock Exchange. In a letter to the Financial Conduct Authority, Chris Cummings, chief executive of the Investment Association (IA), said they would not tolerate any listing that did not adhere to the market’s rules and standards, which include a rule that forces companies to list at least 25% of their shares to qualify for inclusion in the FTSE indices.

Dulux paint owner Akzo Nobel’s plan to appease shareholders with a €1.6bn cash sweetener is at risk from a powerful band of British pensioners from the former ICI and Courtaulds empires, said the Sunday Times. The Dutch chemicals giant promised a one-off €1bn special dividend and a 50% rise in its regular payout to fend off a takeover by American suitor PPG, though its plans could fall foul of retirement funds that fear a weakening the “covenant” or strength of the company.

Despite the looming threat of a Serious Fraud Office investigation into takeover target Amec Foster Wheeler, Wood Group’s £2.2bn bid to buy its smaller oilfield services rival is gaining support. City sources close to the deal told the Sunday Telegraph Wood Group shareholders have been quietly assured that the offer made to Amec already had a potential SFO fine “baked into” the deal through a slightly lower offer price.

Insurer Hastings is trying to claw back as much as £20m from the taxman in a dispute over the insurer’s Gibraltar arm. A resolution of the long-running battle with HMRC is imminent, with a tax tribunal set to deliver its verdict this month, the Sunday Times reported.

Google faces a new front in its war with Europe over allegations of abusing its search dominance, with the price comparison website Kelkoo suing the internet giant in the High Court. The Sunday Telegraph reported that Kelkoo claims Google has crippled its business by illegally exploiting its monopoly over internet searches, and is seeking damages that could run to millions of pounds.

The American hedge fund owners of the Co-operative Bank are expected to stump up £300m as part of a rescue deal for the troubled former mutual. Silver Point Capital, Golden Tree Asset Management and other vulture funds are in “pole position” to take full ownership of the bank, City sources told the Sunday Times.

Britain's restaurants, hotels and tourism businesses are facing a ‘perfect storm’ of high costs, labour shortages and security fears, say leisure bosses. They are calling for the next Government to tackle migration to stop the industry falling off a ‘cliff edge’ as European Union workers desert Britain, reproved the Mail on Sunday.

POLITICS CORNER

Philip Hammond’s time as chancellor of the exchequer appeared to be running out last night as a source close to Theresa May signalled that he may be fired in the prime minister’s post-election reshuffle, the Sunday Times reported. The senior Tory described David Davis, Amber Rudd and Boris Johnson — respectively the Brexit secretary, home secretary and foreign secretary — as key members of May’s top team, but pointedly left out the chancellor.

Labour has pledged to cut the rate of VAT if it wins the general election, the shadow chancellor John McDonnell told the Observer. The new pledge to use the proceeds of future growth to reduce VAT from its current 20% level came as Theresa May and her senior ministers appeared to be at loggerheads over the Conservatives’ own tax policies, adding to an impression that the Tories are suffering a bout of late campaign jitters before polling day on Thursday.

A Labour victory on Thursday would trigger a surge in public borrowing, a spike in inflation and a plunge in the pound, according to leading City economists. If Jeremy Corbyn wins an outright majority, or forms a coalition with the SNP, sterling could tumble below $1.20, warned Fathom Consulting in the Sunday Times.

JPMorgan was not so sure suggesting a strong Labour performance would be the best result. Analysts at the US bank believe that a coalition of center-left parties would lead to a “soft” Brexit, which might be better for the UK economy and its currency.

Lunch breaks are being cut short, minority subjects are being dropped and parents have even been asked to pay for basic cooking ingredients, as part of attempts by schools across the country to cover for shortfalls in funding. Analysis by the Observer revealed headteachers have been resorting to desperate measures to save money as budgets are squeezed – and are forced to make increasing demands, often on parents, to plug the gap.

More than 1,300 academics from the European Union have left British universities in the past year, prompting concerns of a Brexit brain drain, the Observer said. There has been a 30% rise in departures of EU staff in just two years, according to data released by dozens of universities under the Freedom of Information Act.

BA STRUGGLES, LOCAL NEWSPAPERS RUSTLING

Struggling outsourcing giant Capita is in talks to take over British Airways’ call centres in Newcastle and Manchester as the airline tries to slash more costs. The possible deal risks more controversy for the IAG-owned airline, which was brought to its knees last week by an IT meltdown that left 75,000 passengers stranded, the Sunday Times reported.

British Airways’ parent company needs to add more non-executives with specialist IT knowledge in the wake of last weekend’s system outage, a major shareholder advisory group has warned. Glass Lewis said the board of International Airlines Group, which owns Iberia and Aer Lingus in addition to BA, does not have enough people to help it tackle the type of crisis which occurred last weekend, the Sunday Telegraph reported.

Hedge funds and restructuring experts are developing plans for a major consolidation of Britain’s local newspaper industry, using the debt struggles of The Yorkshire Post publisher Johnston Press as a catalyst, the Sunday Telegraph reported. The company’s lenders are understood to be in talks with management and shareholders about pursuing potential mergers with rivals including Trinity Mirror and Newsquest, which is owned by the US newspaper group Gannett.

Sir Philip Green has called in management consultants as he tries to turn around his struggling Arcadia Group, the Sunday Times reported. McKinsey & Co is said to be helping Green grapple with the shift to online shopping, which has particularly hit sales at Topshop, the most successful part of his empire.

From above, the summer sun catches the glimmer and sheen of a new facet of the energy evolution, rhapsodised the Sunday Telegraph. A solar panel does not command attention quite like the stoic thermal power plants that rise up from British landscapes, but the spring bank holiday heatwave began with a new record for solar power generation, which created a quarter of the nation’s electricity mix on Friday afternoon.

For the Communication Workers Union (CWU), it must feel like a good deed punished. Having vocally supported BT over the last year in its campaign to retain control of its Openreach network unit, the reward for workers’ representatives is the planned closure of the company’s final salary pension, the Sunday Telegraph said.

Does the American dream exist? Or has the middle class ruined it by hoarding opportunity on a scale that makes even the infamous one-percenters appear harmless and ineffectual? That’s the question economics professor and Brookings Institution fellow Richard Reeves has set out to answer, and his findings are worrying: the top echelons of the US middle class – those earning over $120,000 – are separating from the rest of the US, and pulling up the drawbridge behind them. - Observer

Online fashion group Boohoo is set to grow by 50 per cent this year, putting it on target to hit turnover of £1billion by 2020. The estimate by John Stevenson of stockbroker Peel Hunt means other City analysts could redraw their sales targets this week and issue revised forecasts for the company’s meteoric rise, said the Mail on Sunday.