Business is Not Out of the Woods Yet
Wednesday, June 24, 2009 16:30
There were signs that the economy had turned a corner after a leading think-tank declared the recession over a number of big-money deals boosted sentiment. However, there were also some stark reminders that business was not out of the woods yet.
The National Institute of Economic and Social Research said that it believed that the worst of the downturn was behind us after it released upbeat estimates showing that growth in GDP had resumed in April and May. The institute’s assessment came after official figures revealed the first gains in manufacturing output for 14 months.
Heritage Oil agreed a deal with General Energy, a Turkish business, that will create a £3.5 billion FTSE 100 oil group.
BlackRock, the US money manager, said that it would buy Barclays Global Investors for $13.5 billion in a deal that will create the world’s biggest asset manager.
Investment banking advisers to the Treasury were examining the feasibility of selling Northern Rock, the nationalised lender, back to the City in the Autumnm and the City speculated whether Thomas Cook, the travel group, may soon be in play after Arcandor, the German retailor that holds a 52.b per cent stake in the FTSE 100 group, applied for bankruptcy after being refused state aid.
A deal for Setanra Sports, the troubled pay-TV froup, also looked on the cards after Len Blavatnik, the Russian-born oligarch, offered to buy a 51 per cent stake for £20 million.
West Bromwich Building Society took a step back from the brink of collapse after agreeing a debt-for-equity swap deal with its bondholders.
However, Llyods Banking Group said that it would close all 164 branches of Cheltenham & Gloucester and shut other parts of its mortgage business with the loss of 1660 jobs.
Cabin crew at British Airways were fretting after the airline told them that it wanted to cut 2000 jobs, leading to fears that the carrier could be hit by a summer of strikes.
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