Aberdeen Shares Soar On Scottish Widows Deal

Aberdeen Asset Management shares have surged by nearly a sixth after it agreed a deal to buy its rival Scottish Widows Investment Partnership (SWIP) from the taxpayer-backed Lloyds Banking Group.

In midday trades Aberdeen shares were up 15% at 491p.

The deal, valued at up to £660m, would increase the value of assets managed by Aberdeen to around £350bn - transforming it into the largest listed fund manager in Europe.

Aberdeen's deal is mainly share-based, which gives Lloyds a stake of around 10%, valued at £560m.

It will also pay up to £100m as "deferred consideration payable in cash" in five years.

Sky News City Editor Mark Kleinman first reported the impending sale last month.

The announcement comes as Aberdeen released its full-year results to September 30.

It revealed an underlying pre-tax profit of £482m, up 39% on the previous year.

The deal means Lloyds will enter into a long-term management relationship with Aberdeen.

The sale of SWIP does not include the core asset of Scottish Widows plc, which includes the group's life, pension and investment business.

Lloyds is 33% owned by taxpayers and has a refocused strategic goal of building UK business and retail banking while selling off non-core assets.

Aberdeen's chief executive Martin Gilbert called the transaction was "significant".

He said: "It strengthens our investment capabilities and adds new distribution deals."

Lloyds boss Antonio Horta-Osorio added: "I'm very pleased today to be announcing this strategic partnership with Aberdeen Asset Management.

"This is a good deal for them, and a good deal for Lloyds Banking Group."

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Tycoon To Bankroll UKIP Election Campaign

One of Britain's wealthiest men has vowed to do "whatever it takes" to bring UKIP European election victory next year in a blow to the Conservative Party.

Paul Sykes, a Eurosceptic tycoon who has been estimated to be worth £650m, was formerly a Tory backer but is promising to bankroll Nigel Farage's UKIP campaign.

Mr Sykes, a veteran of the keep the pound campaign 15 years ago, reportedly donated £1.5m to UKIP's 2004 European election campaign.

His intervention will increase fears among the Conservatives that the rise of UKIP will prevent them from wining a majority at the next General Election.

Mr Skyes' backing in 2004 helped UKIP quadruple its number of seats from three to 12.

UKIP leader Nigel Farage has welcomed Mr Sykes' support

In a statement Mr Skyes said: "I believe we have one last chance to stop the gradual erosion of our national independence. And that chance comes with the European elections.

"If, as I hope and believe, Ukip score a stunning national victory, then the leaders of the other main parties will have no choice but to abandon their slavish support for the EU.

"Nigel Farage and Ukip are the last best hope for Britain. I am prepared to do whatever it takes to propel them to victory next year."

Mr Farage said: "Paul Sykes has a long record of defending British democracy.

"His involvement in this campaign is a significant boost for UKIP and will help us to cause our intended earthquake in British politics in the European Elections next May."

Mr Sykes was a strong supporter and backer of the Conservatives under Margaret Thatcher in the 1980s but broke with the party in 1991 over John Major's stance on Europe.

UKIP returned a strong performance in 2004

He went on to selectively fund individual eurosceptic candidates in the 1997 General Election.

Mr Skyes said that he hoped UKIP election success would force the other parties to listen to calls for an early referendum on Britain's membership of the EU.

He said: "So far they have stubbornly refused to listen. Maybe a comprehensive thrashing at the polls will bring them to their senses. Far better would be to accelerate the whole process and have that in/out referendum on the day of the general election in 2015."

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PlayStation 4 Sells A Million On Launch Day

The PlayStation 4 console sold more than a million units on its first day, according to Sony.

The new machine went on sale in the US and Canada on Friday, and is being  released in Europe and Latin America on November 29.

Andrew House, head of Sony Computer Entertainment, called the response "phenomenal" and said sales were still going strong.

"We are extremely grateful for the passion of PlayStation fans and thank them for their continued support," he said.

Sony has said it expects to shift five million PS4 consoles by April.

Sky News' review of the console found it delivers on the hardware front and praised its sleek design but, like a number of other testers, thought the games available at launch were "fairly limp".

There were also a few teething troubles on launch day, with the PlayStation Network online portal crashing under the strain of people logging in.

Microsoft is gearing up for the debut of its own next-generation console on Friday and will be hoping to hold on to existing fans as well as tempt any "floating gamers".

The Xbox One is £80 more than the PS4 at £429, but comes bundled with the new version of the Kinect movement sensor.

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Emirates Airlines In Boeing And Airbus Spree

Emirates Airlines has gone on a 200-plane spending spree, as its home base of Dubai reiterates plans to become the world's biggest aircraft hub.

The airline has agreed to buy 150 Boeing 777 mini jumbos and confirmed purchase of 50 Airbus A380 superjumbos.

The order from Boeing is valued at $55.6bn (£34.5bn), excluding engines, while the purchase from its European rival Airbus amounts to $20bn (£12.4bn) at list price.

Emirates' appetite for plane purchases will not cease, the airline's president Tim Clark said.

"I don't think Emirates is going to stop with this order," Mr Clark, speaking at the Dubai air show, said.

"The intention of the government of Dubai is to fill the new airfield here on this site," at Al-Maktoum International Airport which opened for passenger operations last month.

In total Gulf airlines, led by Dubai's Emirates and Abu Dhabi's Etihad, struck plane deals worth almost $150bn (£93bn) on Sunday.

The buying spree underscored a shift in power in the aviation industry, as oil-rich, fast-growing economies of the Gulf take advantage of their strategic position between East and West to draw more travellers from hubs in Europe and Asia.

An Emirates Airbus A380 lands on the runway at Manchester Airport

But it comes at a price - both Airbus and Boeing signed deals to buy some $5bn of parts and materials from Abu Dhabi, in a sign Gulf states are seeking a reciprocal boost to their economies from the huge orders they have placed with the plane firms.

Dubai has in the past announced ambitions to turn Al-Maktoum into the world's largest aviation hub once completed, with five runways and a capacity to handle 160 million passengers.

"They're hoping to get that in the state of readiness for 2020-2022 and the scale of that will allow us to grow our fleet further," Mr Clark said.

"When we have more firm lines on that, we will be revisiting our fleet plans and routes structures."

Mr Clark said the commitment to buy 150 Boeing aircraft would be finalised before the end of 2013.

Emirates was in discussions for four to five years with Boeing over the new airliner that is scheduled to enter service around 2020.

"In the last months we've got it where we wanted it to be," said Mr Clark. "Basically the terms are agreed with Boeing."

The biennial Dubai air show got off to a bright start Sunday, with orders from the big three Gulf carriers - Emirates, Etihad Airways and Qatar Airways - for Boeing and Airbus planes hitting $141.5bn (£87.5bn), excluding the price of engines.

Emirates flew its first routes out of Dubai with just two aircraft in October 1985, using a leased Boeing 737 and an Airbus 300 B4.

It now has more than 200 aircraft, excluding the newly announced purchases, and flies to 70 countries.

The airline accounts for around 40% of all flights at Dubai International Airport.

:: The air show was hit by a Gulf sandstorm on Sunday, cutting visibility dramatically.

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Bidders Eye Lloyds-Owned Housebuilder Avant

By Mark Kleinman, City Editor

A group of private equity firms are circling a major housebuilding firm owned by Lloyds Banking Group, as investors seek to exploit the benefits of the Government's Help to Buy scheme and the wider availability of mortgage finance.

Sky News has learnt that Avant Homes appointed investment bankers from Rothschild in recent days to oversee an auction of the company that will begin during the course of next year.

Lloyds, which owns a 100% economic interest in Avant, is supportive of the decision to launch a sale of the company, which is likely to generate a return for it of more than £100m. Last year, the bank refinanced £455m of its borrowing facilities, giving the company until next year to repay its loans.

Private equity groups including Electra Partners are already understood to be drawing up plans to bid for Avant, whose flagship developments include Quartermile luxury residential properties in Edinburgh, insiders said on Monday.

Avant was previously known as Gladedale, and has a significant presence in both the residential and commercial property sectors.

Like many other housebuilders, it is understood to have seen a sharp upturn in business because of the broader availability of mortgage finance and the advent of the Government's Help To Buy initiative, which has sparked concerns in some quarters about a potential housing market bubble.

Based in Dunfermline, Avant expanded rapidly under its founder Remo Dipre to become one of the UK's 10 largest housebuilders in 2006. Mr Dipre quit the company in 2009 amid a debt-for-equity swap which involved Lloyds writing off approximately £500m of outstanding loans.

Through its rescue of HBOS - a deal that led to it becoming 43%-owned by UK taxpayers - Lloyds ended up as the owner of a string of housebuilders which over-expanded before the financial crisis.

Many have since been restructured or sold, including Countryside Properties, McCarthy & Stone and Cala Homes.

Cala, also headquartered in Scotland, was bought by a joint venture between Legal & General, the insurer, and Patron Capital, the private equity group, in a £210m deal.

Countryside sold a large stake to Oaktree Capital, another investment firm, in February, while Crest Nicholson, a larger rival, floated on the London stock exchange earlier this year.

The flurry of sales involving housebuilding groups backed by Lloyds underlines the extent to which HBOS became embroiled in excessive lending to the sector during the boom which preceded the financial crisis, a trend criticised in a report this year by the Parliamentary Commission on Banking Standards.

Assuming Lloyds successfully sells its stake in Gladedale, it would be the last remaining equity stake in a major housebuilder to be removed from the bank's books.

Avant declined to comment.

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Burton's Biscuits Bought By Canadian Fund

The Ontario Teachers' Pension Plan has agreed to buy the British maker of Wagon Wheels and Jammie Dodgers.

Burton's Biscuits is the UK's second-largest biscuits manufacturer, employing 2,000 people around the UK with annual sales of £340m.

The deal was first reported by Sky News City Editor Mark Kleinman on Saturday.

The pension fund has not revealed the value of the deal to buy the biscuit maker.

Burton's is also the name behind Cadbury Fingers and Maryland Cookies.

Based in Hertfordshire, Burton's traces its roots back to the mid-1800s when it was founded by George Burton.

It employs more than 2,200 people around the UK in manufacturing facilities in Llantarnam, Edinburgh and Blackpool, a chocolate refinery in Moreton and a central distribution hub in Liverpool.

Ontario Teachers has become a voracious acquirer of British companies in recent years, taking over National Lottery operator Camelot and nursery chain Busy Bees.

Burton's is one of a sizeable number of mid-sized British companies which has been through several phases of private equity ownership.

In 2009, Apollo and the Canadian bank CIBC seized control of the company after Duke Street Capital, its previous owner, was forced to surrender control to the biscuit-maker's lenders.

Another private equity group, HM Capital, had bought the company in 2000 from Associated British Foods, owner of the Primark retail chain.

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Prosecco Makes Majestic Wine's Profit Fizz

Wine warehouse chain Majestic Wine has seen a 39% surge in prosecco sales, prompting a 4.2% rise in first half profit.

The company said rocketing sales of the Italian sparkling wine, along with new store opening, saw revenue rise 3.3% to £130.2m until the end of September.

Pretax profit rose to £9.5m in the period.

Prosecco has been outperforming both champagne and cava as consumers seek a midway point between the rival wine-producing nations of France and Spain.

British supermarkets also saw a spike in prosecco sales last Christmas.

Grape production for prosecco has grown from five million bottles in 1968 to 150 million bottles in 2008.

Producers now hope to reach 250 million bottles annually and match France's champagne output.

Majestic Wine opened three stores in the first half of the year and has opened three since the end of September, bringing the total to 198.

Vineyards in northern Italy used for prosecco production

Active customers rose by 6.2% to 631,000, while online sales rose by 8.3%.

Internet purchases now represent 10.3% of all UK retail sales.

The company said: "These results show we continue to make steady progress towards our strategic growth objectives and we are very well prepared for the peak Christmas trading period."

There was some flat news for Majestic, as like-for-like sales were down 0.4%.

It blamed last year's Jubilee celebrations and the timing of Easter for conflicting with its reporting timetable.

Majestic Wine said its growth strategy is to expand its store estate, increase revenue from business customers, grow internet transactions and develop sales of fine wine.

Shares in the firm were up 1.55% in lunchtime trades on Monday. Majestic's stock price has risen 40% over the last 12 months.

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Top Directors' Pay Up 14% In Past Year

Pay packets for directors at Britain's biggest listed companies have grown 14% in the past year - more than six times the increase in overall average earnings.

The disparity has been driven by a huge rise in share-based long-term incentive payments, according to a new report.

A study by pay analysts IDS found that basic pay rises for directors of FTSE 100 firms were "relatively restrained" at 4%, while annual bonuses were 8.8% lower.

But the directors benefited from long-term incentive plans (LTIP), which jumped by 58%, taking the median total from £764,000 to over £1.2m, the study revealed.

Steve Tatton, of IDS, said: "These divergent pay trends highlight the complex make-up of boardroom remuneration, illustrating that while one part of a director's pay package may go down, another part may go up.

"With nearly two-thirds of FTSE directors benefiting from an LTIP award in the latest year, the higher share-based payouts clearly made up for any ground lost in lower annual bonuses."

LTIPs are created to offer incentives over an extended period, usually over three years.

They are normally given as shares and are linked to shareholder returns.

According to a study by Maifest and MM&K, FTSE 100 chief executive total pay sits at 120 times the average earnings of their employees.

This has risen from 47 times the rate in 1998, but down from a pre-crash peak of 151 times the average worker pay in 2007.

TUC general secretary Frances O'Grady said: "Britain's top bosses are back to their old tricks as their pay is growing 20 times faster than the average worker.

"It's one thing replacing bonuses with long-term incentive plans, but FTSE 100 companies are simply exploiting this change to make their fat cats even fatter.

"The time has come for legislation to put ordinary workers on the pay committees of companies. This is the only way to bring some sanity to the way in which directors are paid."

A significant portion of FTSE 100 directors were given large share blocks when equity prices were much lower.

With rising share prices the top directors are now seeing windfall gains.

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Housing Bubble Fears Raised In BoE Survey

The biggest fear of British high street lenders is a housing bubble burst, according to a survey published by the Bank of England.

The fears were voiced in the latest BoE twice-yearly survey of economic threats seen by banks, building societies, insurers and asset managers.

The firms said the impact of low interest rates on house prices had risen sharply as an area of concern since the May survey.

"Perceived risk around property prices ... rose, being mentioned by 36% of respondents, up 11 percentage points since the previous survey," the Bank of England said.

"Concerns were concentrated almost exclusively on the residential market, where responses focused on the risk of a house price correction."

The BoE feeds the survey into its financial stability work and so far has said it sees no general housing price bubble in the making.

The survey comes as the British Bankers' Association (BBA) warned Chancellor George Osborne to explain how and when the Help to Buy scheme will end.

The BBA, which represents the UK's largest lenders, has said Mr Osborne need to clarify the scheme's exit strategies.

However, property website Rightmove said that fears that Britain's housing stimulus schemes are inflating a property bubble look overblown.

The Bank of England survey also found two other concerns among banks and other financial sector players.

Respondents cited government debt levels in Europe and the United States, and the threat of an economic downturn as points of risk.

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US Stock Markets Hit New Highs After Jet Deal

Stock market indexes are hitting new milestones on Wall Street, fuelled by a wave of new Boeing plane orders and continued positive investor sentiment for stocks.

The Dow Jones industrial average crossed 16,000 points for the first time early Monday and the Standard & Poor's 500 index crossed 1,800 points.

Stocks have been rising sharply this year as the US economy improves, companies report bigger profits and the Federal Reserve keeps up its easy-money policies.

The S&P 500 index has risen for six weeks straight and is up 26% so far this year.

But a growing number of market watchers are calling for caution after the steep rise.

US politicians appeared to act against the national interest in the impasse

Boeing rose the most of the 30 stocks in the Dow after the plane maker booked around $100bn (£62bn) in orders at the opening of the Dubai air show.

Meanwhile, foreign buyers of US Treasury securities increased their holdings in September, suggesting many shrugged off budget battles in Washington to keep investing in American debt.

Total foreign holdings rose 1% September to $5.65trn (£3.5trn), the Treasury Department said.

That followed a 0.03% gain in August.

Holdings had fallen from April through July, possibly reflecting concerns about rising interest rates.

In September, holdings were 1.2% below the record high of $5.72trn reached in March.

China, the largest foreign buyer of Treasury debt, boosted its holdings 2% in September to $1.29trn.

Japan, the second-largest buyer, increased its holdings 2.5% to $1.18trn.

An impasse over the budget led to a 16-day partial shutdown of the federal government in October.

Politicians did not reach an agreement to raise the nation's borrowing limit until October 16 - one day before a deadline that, if compromised, would have increased the risk of a default on US debt.

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