Sunday newspaper round-up: Vodafone, Deals frenzy, Business loans

Vodafone and Three may combine their UK units which were respectively the third and fourth largest mobile network operators in the country, City sources said. Ownership of the joint-venture would be split equally. On account in part of its smaller size, Three's owner, CK Hutchinson, would probably inject a lump sum of cash into the venture. The merger's original date of announcement in May had to be delayed. Activist investor Cevian Capital had been calling for mergers and acquisitions in key markets in order to bolster Vodafone's share price. Hutchinson meanwhile was keen to sell Three due to the difficulty of achieving its targeted returns. However, lawyers in the City doubt that the Competition and Markets Authority will clear any deal. - Financial Mail on Sunday

The FTSE 250 may soon be hollowed out by a frenzy of deals, City sources say, as sharply falling share prices and the drop in sterling increase some firms' attractiveness to predators. In the case of US investors, the second-tier index had retreated by 22% year-to-date and the pound had depreciated by 14%, resulting in a significant discount. One senior banking source said that up to a fifth of FTSE 250 firms might become targets. The same source nevertheless conceded that tighter debt markets had scuppered the attempted buyout of Boots and that of UK Power Networks. Mid-sized firms however did not require huge amounts of debt in order to acquire them. A recent takeover approach for Euromoney was a case in point, said Canaccord Genuity, and Computacenter, Future Plc, IMI, Moneysupermarket.com and NCC Group could all soon also become targets. - Financial Mail on Sunday

Ministers will give the green light to a new £6bn business loan scheme within days, helping to lower the cost of debt for companies. A longer-term replacement for the Recovery Loan Scheme should be approved by the Treasury and the business department over the course of the coming week, sources at Whitehall said. RLS2, as the new scheme has been dubbed by some, will be less generous that its predecessor but aims to provide £3bn a year over the following two years. The first RLS had provided a government guarantee covering 70 per cent of loans worth up to £2m for small and medium-sized companies - Sunday Telegraph

Johnson Matthey is expected to unveil plans in the next few days to build a hydrogen fuel cell gigafactory in Royston, Hertfordshire, for £80m. The company already has deals in place with customers to build the factory. Plans are to sell £200m of the new technology by the end of the 2025 financial year. At the beginning, the factory will manufacture 3GW of proton exchange membrane fuel cell components each year, a type best suited for hydrogen vehicles and, it is believed, for use in heavy goods vehicles. - Sunday Telegraph

Ted Baker's cashflow is being negatively impacted by credit insurers' decision to pull their cover for the fashion chain during the pandemic. A spokesman for the retailer, which is running a process to potentially sell the business, said: "We do not believe there has been any change to the position of our suppliers with regards to credit insurance or that there is any new news in this area." - Sunday Times