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Friday newspaper round-up: ITV, Yell, Lloyds TSB

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Date: Friday 11 Jul 2008

LONDON (ShareCast) - ITV is braced for a severe decline in autumn advertising revenue as household-name companies batten down marketing budgets before Christmas.

The broadcaster's advance deadline for September advertising bookings passed yesterday and agencies said that they expected that ITV1, Britain's most-watched commercial channel, would face a 13% drop, reports the Times.

Yell, owner of Yellow Pages, yesterday faced an investor revolt over its bonus payments and calls for its chief executive and chief operating officer to step down, The Times has learnt. The Association of British Insurers (ABI) has issued an “amber-top alert” signalling concerns over generous management bonuses at Yell after the 87% drop in the group's share price in the past year. Senior executives have received bonuses worth 110% of their salaries.

Lloyds TSB has pulled out of bid talks with the German lenders Dresdner Bank and Deutsche Postbank. Discussions are believed to have reached board level but Lloyds decided against an offer for either bank after resistance from its own shareholders and concerns about further possible writedowns at Dresdner, reports Telegraph.

Dow Chemical tapped Warren Buffett and Kuwait’s sovereign wealth fund to help pay for its $18.8bn takeover of its US rival Rohm & Haas. The proposed cash deal, which places a large premium on R&H’s recent valuation, will leave Mr Buffett as the single largest shareholder in the enlarged group and cement long-standing ties between Kuwait’s government and Dow, say the FT.

The crisis afflicting Britain's housebuilders is set to add tens of thousands to the unemployment count over the next few months, senior industry figures warned yesterday, amid deepening gloom in the property sector. Mark Clare, chief executive of Barratt Developments warned job cuts across the industry could reach 60,000 out of 300,000 people employed directly and indirectly in the sector, writes the FT.

The Bank of England will today be lobbied by leading figures from high street banks to widen the terms of the Special Liquidity Scheme (SLS), put in place in April to help free up money in the financial sector. The banks are reported to be pushing for the terms of lending to be widened, and are expected to argue that the scheme has not done enough to restore confidence among banks, which remain cautious about lending money to each other and customers, writes the Times.

Britain is now in the midst of the worst housing slide since the Great Depression, economists declared after house price inflation dropped to the lowest level since comparable records began. Figures from Halifax, the UK's biggest mortgage lender, showed house prices have fallen by 8.7% in the year to June, confirming that the property crunch is more severe than the last housing crash in the early 1990s, reports the Telegraph.

Thousands of shopkeepers are to stop selling Vodafone pre-pay top-ups from today in protest at the mobile phone company's plans to cut their commission.
Vodafone is to implement a one percentage point cut on August 1 as it says it wants to spend more on investing in services and marketing to pre-pay customers, says the Telegraph.

Vodafone, meanwhile, will face a tax bill of more than $4bn (£2bn) - double the amount expected - if it loses a landmark court battle with the Indian government.The development raises the temperature in a case that is already being closely watched by foreign investors in India says the FT.

Legendary fund manager Anthony Bolton believes the bear market is nearer the end than the beginning and has called time on commodity stocks, advising investors to transfer their money into the banking sector. In an interview with The Daily Telegraph, Mr Bolton admitted his advice was "controversial" but said the commodity sector would be the next to suffer after downturns in the banking, retail and construction, reports the Telegraph.

Hedge funds suffered their worst start to the year for almost two decades in 2008. Hedge Fund Research, a US analysis group, said the industry index it compiles was the worst in the first six months of the year since it began tracking in 1990. The group found that on average, hedge funds declined 0.75% this year, only the second time in 18 years the industry performance has fallen into negative territory. The first, in 2002, came in the fall out of the bursting of the technology bubble, reports the Independent.

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