Sunday newspaper round-up: HSBC spinoff, Lloyds offer, Worldpay IPO

The government is planning a two-stage sale of Lloyds Banking shares this year, the Sunday Telegraph reported, partly as a means of preventing short-selling hedge funds from targeting one of the largest retail offerings in decades at the taxpayer’s expense. The government's UK Financial Investments is already understood to be working with advisers at JP Morgan on ways to reduce the influence of short-sellers. The first step of the plan, it is understood, would see a chunk of Lloyds shares sold to institutional shareholders, with the price of this share sale setting the level of a later retail offering, managed using a range of other stockbrokers, with individual investors offered a 5% price discount to the big institutions.

WorldPay, the payment processor spun out of Royal Bank of Scotland, has begun talks with investment bankers at Goldman Sachs about launching a £6bn flotation in in the next 12 months, the Sunday Times revealed. Sources said the company's private equity owners Bain Capital and Advent International are keen to cash out five years after they bought the electronic payments specialist for £2bn. Worldpay, which is chaired by Tesco chairman John Allan, generated a profit of £346m in 2013 and is forecast to follow that with £400m.

The London house price 'bubble' is set to inflate by a further 30% in the next five years, according to research cited by the Sunday Telegraph. The strong economic backdrop and unrelenting desire to live and invest in the UK capital will boost house prices, which figures show already rose 20% in the last year. A new report by property consultant CBRE has forecast that normally-priced houses and flats will see price rises of 5% each year in 2016, 2017 and 2018, before increasing to 6% in 2019, whereas prices in luxury London property will accelerate up to 6% in 2017, ahead of all other regions as well as the rest of the capital.

“Recession? What recession?” The Sunday Times Rich List has revealed Britain’s super-rich have made hay while the rest of the country scrimped and saved through austerity, more than doubling their wealth since the depths of recession in 2009. The annual survey found the wealthiest 1,000 people based in Britain are together £547bn, up 112% from the £258bn six years ago. The Rich List survey labelled the richest man in Britain as Len Blavatnik, the Ukranian-born, London-based owner of Warner Music. The media and metals investor's £13.17bn fortune saw him usurp last year's leaders, the Hinduja brothers Sri and Gopi, who are now worth £13bn. Anglo-Canadian brothers Galen and George Weston, whose family run Selfridges and were the originaly founders of Primark owner Associated British Foods, saw their fortune grow more than 50% in the year to £11bn to take third spot. Uzbekistkan-born businessman Alisher Usmanov, who owns a stake in Arsenal football club, was fourth.

France's biggest supermarket chain, Carrefour,is set to benefit from the return of the 'booze cruise', which is reported by the Sunday Telegraph as the powerful combination of rising alcohol duties in the UK combines with a cheap euro. The savings from hopping on a cross-channel ferry to France on an booze-buying day trip have "never been greater" the paper said. Data from currency exchange firm Caxton FX shows a 14% rise in British buyers shopping at the French supermarket group compared with the same time last year. Now 56% more Britons are shopping at the grocer than were in 2013, with overall transactions in Carrefour up by more than 17,000 to 87,000 in the past year.

The oil price slump and UK election worries led to more profit warnings in the last quarter than had been seen in the last six years, according to research quoted by the Sunday Telegraph. Analysis from accountancy firm EY showed UK quoted companies issued 77 profit warnings between January and March, three more than in the same period a year ago and representing more than 5% of all FTSE companies. Oil and gas producers and support services companies topped the list of struggling firms, with eight profit warnings apiece, while retailers issued six profit warnings.

The long-predicted wave of UK water company mergers may finally emerge as US bank Citi puts its £2bn stake in Yorkshire Water up for sale, the Sunday Times suggested. Yorkshire Water is 30% owned by Citi with the remainder held by GIC, Singapore’s sovereign wealth fund. The paper cited industry sources who said Citi’s exit could trigger a change of control at Britain’s fifth-biggest water company because two other big investors — Rreef, the infrastructure fund of Deutsche Bank, and pension fund giant M&G — have also been considering whether to sell out.

The Observer's business page looked ahead to results from BP and Royal Dutch Shell this week. BP, which analysts have been mooting as a possible takeover target in recent weeks, is expected to see a 60% drop in first-quarter operating profits to $2.1bn (£1.4bn), according to Société Générale analysts, with further costs relating to cancelling rigs during the quarter. Shell net income could fall 49% to $2.29bn, say analysts at Bernstein.

A relatively warm analyst reception for the Apple Watch was also covered by the Observer, ahead of second-quarter figures being published on Monday. The paper cited analysis that pointed out that the watch seemed about a third as popular as the iPad and half as popular as the iPhone at launch. UBS still forecasts sales of 36m units in the first year and 40m in 2016, though, and it is the success of the iPhone 6 that will be key to expected a near-24% rise in quarterly revenues to $56.5bn, a possible dividend hike and share repurchase scheme.

The Co-operative Group has not appointed a banker to its board a year after such an appointment was recommended following a probe into the scandal at its banking arm, the Mail on Sunday reported, although the group only owns 20% of the financial business now. Mark Garnier, a former member of the Banking Commission, said the fact the mutual had not yet appointed a banker could be "a sign they will divest and will give up on financial services altogether. What does it say about their long-term intentions?" The group is said to be in the process of approving several appointments to the board, with announcements imminent.

Expected to show a bit more discipline will be UK's first new mutual company in a decade, the Military Mutual, the Sunday Times reported. The mutual has been set up to offer motor and home insurance to former military personnel and their families. Chaired by retired major general Sir Sebastian Roberts, the mutual has received initial funding from Builders Reinsurance and will be managed by Regis.

The trading company run by 'Flash Crash' trader Navinder Singh Sarao, the man who is accused of causing a Wall Street crash in 2010 from his parents Hounslow home, is in line for a multi-million tax rebate, according to the Sunday Times. Saro, who the US wants to extradite to face charges there, is due the repayment after his company made losses in two consecutive years, accounts show.