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Monday newspaper round-up: HBOS, BP, Numis

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Date: Monday 28 Apr 2008

LONDON (ShareCast) - HBOS was last night drawing up plans for a rights issue raising up to £4bn of fresh capital after taking the view that it wants a big cushion of capital as Britain enters a housing downturn.

Directors at the banking group are thought to have warmed to the option of a significant capital-raising over the past few days and are likely to announce it before the annual meeting in Glasgow tomorrow, reports the Times.

Some of the world’s biggest consumer goods companies have become targets for the Office of Fair Trading’s latest probe into alleged price-fixing between Britain’s biggest supermarkets and their suppliers, reports the FT and Telegraph. Procter & Gamble confirmed on Sunday that it was visited last Thursday by the competition watchdog, which also visited the headquarters of Tesco, Asda, J Sainsbury and Wm Morrison to request data about prices of groceries, health and beauty products and detergents. Mars and Unilever said they had received letters on Friday from the OFT to arrange a visit to their offices. Reckitt Benckiser is also said to be on the list of suppliers under scrutiny.

United Business Media (UBM) is to join a growing exodus of companies from the UK by shifting its tax base to Ireland, dealing a fresh blow to the Government’s tax policies. The publishing and events group, a British company since 1918 which now generates 85% of its earnings overseas, is expected to make a formal announcement within days, says the Times.

House prices could fall by 25% if the credit crunch persists, with the market declining by 10% this year and by a further 15 percentage points in 2009, a new study suggests. The pain will be felt in all but the most exclusive postcodes, according to Savills, the estate agent. However, action by lenders could limit the credit crunch impact to a slide of 6%. Savills’ revised forecasts coincide with figures from Hometrack, the property data business, showing that house prices have dropped a further 0.6% in the past month, the seventh consecutive fall, writes the Times.

The record oil price will help BP and Royal Dutch Shell post bumper first-quarter profits. City analysts expect BP and Shell to report quarterly profits of more than £2.5bn each. Brokers are forecasting that Shell will unveil earnings of around $6.7bn (£3.4bn), while rival BP is expected to reveal slightly smaller profits of $5.2bn (£2.6bn). However, the record oil price will also hit profits at BP and Shell's refining businesses, writes the Telegraph.

Numis, the stockbroking group chaired by Michael Spencer, the City’s richest man, is in advanced talks to carve out the UK equities business of Bear Stearns, the stricken American investment bank, the Times has been told. Numis Securities, in which Mr Spencer holds an 11% stake, is understood to be looking to hire a team of about 25 staff from Bear, headed by Nicolo Brandolini d’Adda, the co-head of European equities.

Eos, the premium airline that flew between London and New York, filed for Chapter 11 bankruptcy protection last night, a move that appeared to signal the end of cut-price executive-only flights across the Atlantic. The American carrier’s flights were suspended last night, leaving hundreds of passengers stranded at Stansted and John F Kennedy airports, reports the Times.

The number of companies entering insolvency has risen to the highest level for five years due to the ongoing credit crisis. According to PricewaterhouseCoopers, in the first three months of 2008, 3,359 companies failed across the UK - a 21% jump on the previous quarter and a 17% increase on the same time last year, writes the Telegraph.