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Wednesday newspaper round-up: Bradford & Bingley, Lonmin, Vodafone

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Date: Wednesday 14 May 2008

LONDON (ShareCast) - Bradford & Bingley is planning to announce an emergency rights issue this morning to shore up its battered balance sheet, The Times has learnt.

The mortgage bank is thought to be exploring how it might raise fresh capital, and at least one institutional investor has been approached about the possible underwriting of the deal. According to one source, the bank has been gauging investor appetite for raising £300m by offering one new share at 90p for every two held, although the precise terms had not been set.

House prices will fall by up to 10% “at best” in the next year, according to a private government assessment laid bare by a minister’s blunder. Caroline Flint, the Housing Minister, told the Cabinet yesterday to prepare for a worsening market. “We can't know how bad it will get,” she said. What was intended as an internal briefing was made public when Ms Flint exposed her notes inadvertently to photographers as she arrived for the meeting, writes the Times.

Alistair Darling cut taxes yesterday for 22m people to make good the losses of only 4m in the biggest financial and political U-turn of modern times. The Chancellor borrowed £2.7bn to give those on low and middle incomes an extra £120 this year in a desperate move to end the row over the abolition of the 10p rate that has brought Labour to its knees and left Gordon Brown fighting to survive, reports the Times.

Vodafone has emerged as one of the frontrunners in the auction for Tiscali after it submitted a bid for the entire €1.4bn (£1.1bn) Italy-based broadband company. It is understood that BSkyB, Swisscom's Fastweb, BT and Wind, an Italian mobile phone operator, also made it through to the next round of bids for all or parts of the company, says the Telegraph.

Barclays has signalled ambitions to push into mergers and acquisitions by poaching five senior investment bankers from ABN Amro, seven months after the UK lender lost out to Royal Bank of Scotland in a battle for the Dutch bank. The bankers are joining Barclays' investment banking division, Barclays Capital, where they will form a dedicated advisory team specialising in M&A. The unit is looking to hire as many as 40 bankers, Barclays said, writes the FT.

BSkyB's hopes of launching a pay-TV service on Freeview, the digital terrestrial television service, will not now come to fruition until spring next year at the earliest after the industry regulator announced another delay to its inquiry into the proposals, reports the Independent.

A string of pension buyouts involving FTSE 100 companies is expected over the next few months after Lonmin, the London-based miner, became the first blue-chip company to offload its pension scheme risks in a deal with Paternoster, the specialist insurer. Mark Wood, Paternoster’s chief executive, said that trustees of several FTSE 100 pension schemes were already “deep in the process” of looking at shedding scheme liabilities, writes the Times.

Airbus announced another delay to the production schedule of its flagship A380 jet yesterday, putting it on the hook for more penalty payments to airlines already angered by a two-year-delay to the superjumbo programme. The company announced that instead of delivering 13 planes this year, it would deliver 12, and that it would fall four planes short of its target of 25 next year, reports the Independent.

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