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Tuesday newspaper round-up: Axon, BP, Lonmin

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Date: Tuesday 26 Aug 2008

LONDON (ShareCast) - Axon, a little-known IT services company, has become the latest British business to be snapped up by a fast-growing Indian rival.

Infosys, one of the world’s biggest outsourcing companies, said yesterday that it had bought Axon in a £407m acquisition that hands £44m to Mark Hunter, Axon’s founder and former chairman, reports the Times.

The Prime Minister faces the prospect of the resignation of at least one ministerial aide if he fails to impose a new levy on energy companies’ profits, The Times has learnt. A petition calling for a windfall tax has been signed by 70 Labour MPs, including three ministerial aides. Five other junior members of the Government have told The Times that they are backing the campaign.

TNK-BP, the Russian joint venture of BP, suffered another setback yesterday with the resignation of a second senior executive in less than a month. Anthony Considine, the company’s head of downstream business, responsible for its oil refining, trading and marketing businesses, is leaving after five years to “pursue other opportunities” as the battle for control of the business escalates, reports the Times.

Sir John Craven's attempts to defend Lonmin, the platinum producer, from a £33-a-share hostile bid from Xstrata have been undermined by the revelation that he sold two thirds of his personal stake in the company for only £1 a share more. Lonmin's chairman has described Xstrata's offer as ridiculous, despite selling 63,808 shares at £34 in February. This raised nearly £2.2m and left Sir John with 30,000 shares, writes the Times.

Britain risks losing its influence abroad unless it makes defence a bigger priority, according to Mike Turner, BAE Systems’ chief executive. Mr Turner also warned that his company could be forced to consider leaving the UK if military spending ever declined below a “reasonable level”, he told the Financial Times.

The world economy has a "long way to go" before it recovers from the worst crisis since the 1970s, the deputy governor of the Bank of England has warned. Charles Bean said that there is little prospect of an economic recovery until well into next year, meaning households' income will remain under severe pressure for months to come, reports the Telegraph.

The crisis gripping Fannie Mae and Freddie Mac spread across the financial system on Monday as JPMorgan Chase warned of a possible $600m (£323m) loss from its holdings of preferred shares in the two mortgage financing groups. JPMorgan said it would write down the value of its $1.2bn of preferred shares in Fannie and Freddie by half. Banks and insurers own most of the $36bn in preferred stock in Fannie and Freddie, writes the FT

Citigroup, meanwhile, is outlawing colour photocopying from internal meetings and banning expense claims for more than one mobile device in a desperate effort to crack down on costs. New BlackBerries and flashy client parties will soon be history after the US investment bank warned staff they should be "challenging every dollar" spent, reports the Telegraph.

Falling profitability and flagging confidence have spread from the consumer sector to Britain's business and professional services firms, a survey of the services industry shows. Services such as lawyers, marketing, accountancy and computing reported record falls in business volumes and values in the quarterly Confederation of British Industry services survey, reports the Independent.

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