The Week's Big Business Stories

Once you've caught up on last week's business news, you can get ahead on what's coming up next week with Sky's Week Ahead.

:: Monday, June 2

On Monday at 6.30pm, Sky News launches its new flagship business show, Ian King Live.

Also on Monday, Apple is hosting its Annual Worldwide Developers Conference. The event is often used by the company to launch new products. It is reportedly gearing up to announce a smart home software platform, powered by iPhones and iPads which would allow users to control household appliances with the swipe of a finger.

:: Tuesday, June 3

The Nationwide House Price Index for May is out on Tuesday morning. Britain's biggest building society reported an annual pre-tax statutory profit of £677m, up more than 300% on the figure last year. Chief executive Graham Beale said there could be early signs of a natural correction to house price rises in London, but warned that measures to cool capital prices might have a negative impact elsewhere.

:: Wednesday, June 4

Tesco will release its first quarter sales on Wednesday. The UK's biggest retailer has refurbished a significant number of stores and some analysts think this will stand it in good stead for the future, but these figures are still likely to show a like-for-like sales decline. Watch for more about the appointment of a new finance boss.

:: Thursday, June 5

At 12pm on Thursday, the Bank of England will announce whether it is to raise interest rates or not. The rate has been at a record low of 0.5% since 2007. The outgoing deputy governor Charlie Bean has said that rates could increase to 3% in the next three to five years.

:: Friday, June 6

The United States will release its jobless data for the month of April on Friday. Consumer spending unexpectedly fell 0.1% in April, according to a report by the Commerce Department. The drop was the first in a year, but economists expect it to be temporary

:: Missing something? Tweet your business stories to @SkyNKTweets

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Regional Home Price Disparity Widens In April

Help To Buy: 80% Go To First Time Buyers

Updated: 3:26pm UK, Thursday 29 May 2014

Some 80% of the Help To Buy loans granted in the mortgage scheme's first six months were given to first time buyers, the Treasury has said.

A total of 7,313 loans were issued between October last year and March this year, with a total value of £1bn.

The average value of each loan taken out under the controversial scheme was £136,742.

Only about 1% of all mortgages taken out in the period were helped by the scheme, undermining critics of the programme who have said it is prompting a house price bubble.

Most mortgage completions through the scheme were on properties outside London and in regions where prices are lower.

A high proportion of homes supported by the scheme were in the North West and the East of England.

Blackstock property expert Andrew Teacher said: "Today's figures reinforce the fact that Help to Buy has not helped to blow up the London market as numerous commentators have suggested.

"The figures show the scheme has been most effective in areas of reduced growth where prices have remained relatively flat."

The mean value of a property purchased or remortgaged through the scheme is £151,597, compared to a national average house price of £252,000.

A total of 38% of loans were for terraced houses.

The scheme's rollout in October saw only four completions, followed by 164 in November and 818 in December.

However, the monthly figure jumped significantly in the first three months of this year.

In January, completions reached 1,580, while the number rose further in February and March, to 2,090 and 2,657 respectively.

Only 5% - a total of 385 completions - were made on properties in the capital.

The Help To Buy mortgage guarantee scheme was boosted by a second phase equity loan scheme in the spring.

Data for both phases shows a total of 27,861 homes were bought under the scheme, with 85% of sales to first-time buyers.

Prime Minister David Cameron said: "Help to Buy has helped thousands of hardworking people to buy a new home and crucially it is helping to increase the number of new homes being built around the country.

"It is an important part of our long term plan to back those who want to get on and to secure a better future for Britain."

Meanwhile, net lending to small and medium sized businesses as part of the Bank of England's Funding for Lending Scheme dropped  by £723m in Q1, amid a focus on business loans.

The Bank said that between February and March lenders drew just £2bn from the scheme. It was launched in mid-2012 to encourage banks to improve borrowing facilities.

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Retailers' Credit Union To Defy Payday Lenders

By Mark Kleinman, City Editor

Some of Britain's biggest high street names, including New Look and Next, are forming a credit union that will offer staff an alternative to the sky-high interest rates charged by payday lenders.

Sky News has learnt that RetailCure, which has also received backing from entrepreneurs such as Rymans owner Theo Paphitis, is drawing up plans to launch later this year.

The new venture has received start-up funding of £1m and will eventually be accessible to the 4.8 million people who work directly in retail or in related sectors of the economy, half of whom earn less than £8 an hour.

It will be chaired by John Lovering, a veteran retailer who has led buyouts of companies including Debenhams, Homebase and Somerfield.

Mr Lovering is also chairman of the Retail Trust, an industry charity which has been working on plans for the new credit union for some time.

Speaking to Sky News, he said: "The industry feels that we have to find a way of providing a source of cheap, reliable credit for our people.

"The three million in retail and the nearly five million in the wider industry do have a need for low-cost, value-for-money, short-term borrowing facilities, and that's what we as an industry are trying to provide."

Booker and Matalan have also agreed to support RetailCure, while John Lewis Partnership and Wm Morrison have been approached and are expected to provide financial assistance.

The launch of RetailCure comes amid a still-intense political debate about the business model employed by payday lenders, which charge interest rates that work out at more than 5,000% on an annual basis.

The high street chains' credit union will charge interest on a sliding scale from roughly 7% to nearly 28% depending upon the borrower's credit history.

Mr Lovering expects the average loan request to be lower than £5,000, and believes that RetailCure could ultimately become Britain's biggest credit union.

"We think we can build a loan-book of £50m and attract 50,000 members relatively quickly," he said.

Assuming it receives regulatory approval, savers who deposit funds with RetailCure will be protected by the same Government guarantee as that which covers high street banks.

Earlier this week, the Church of England unveiled a pilot scheme through which a new credit union network will be piloted in three of its dioceses.

That project is being led by Sir Hector Sants, the former boss of the City watchdog, which since April has had oversight of consumer credit providers such as payday lenders.

Last year, the Archbishop of Canterbury, Dr Justin Welby, said he had told the then boss of Wonga that he wanted to "compete (the company) out of existence".

The remarks sparked acute embarrassment for the Archbishop, however, when it emerged that the Church of England's pension fund was among the investors in one of Wonga's financial backers.

In its annual report this week, the Church Commissioners said they had yet to dispose of the holding because doing so would crystallise a significant loss for its pension fund.

Some industry stakeholders were sceptical about the prospects for RetailCure.

Russell Hamblin-Boone, chief executive of the Consumer Finance Association, which represents short-term lenders, said greater choice was welcome but warned that it faced significant uncertainties.

"What this body will have to do is make sure it complies with very stringent regulations that are applied to financial services.

"I would ask questions around what is going to be the collection policy, what happens if somebody leaves the retailers business still owing a debt, how are you going to collect that?"

RetailCure hopes to launch formally in November.

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UK Economic Growth At 11-Year High: CBI Survey

A survey of more than 700 UK firms has indicated the strongest rate of economic growth since data was first collected more than a decade ago.

The Confederation of British Industry (CBI) said its poll of 726 companies showed May growth expansion at its best since 2003.

The findings come as a second lobby group, the British Chambers of Commerce (BCC), upped its 2014 growth forecast by a tenth.

The BCC said it now expects growth this year at 3.1% instead of an earlier estimate of 2.8%.

Its forecast for 2015 has been upwardly revised from 2.5% to 2.7%, and it continues to expect 2.5% growth in 2016.

BCC director general John Longworth told Sky News: "The figures show the economy is in good state and growing very rapidly.

"But growth at the moment is based too much on consumer spending and consumer credit.

"We need to rebalance the economy towards investment, infrastructure and exports."

The BCC said too much of Britain's growth is coming from consumer spending

The CBI said data indicates growth continuing to expand in the second quarter, building on gains of 0.8% during the first three months of the year.

It added that May's growth was up significantly in the poll compared to the April figure.

CBI deputy director-general Katja Hall said: "The UK economy is performing strongly thanks to rising business and consumer confidence, better credit conditions at home and improving global economic conditions.

"What's encouraging is that growth is becoming more broad-based, with solid increases in business investment over the past year. This bodes well for the year ahead.

"But there are risks to the UK's outlook from global developments, including the possibility that the situation in Ukraine and Russia could impact on global commodity prices."

Meanwhile, a separate consumer survey by data researcher Markit has highlighted householders' concerns.

It said fears of a rising cost of living, interest rates and energy bills topped the list.

It added that nearly a fifth of mortgagees believed there would be "very significant" impact from rising rates.

The concerns match lenders new protocol prior to accepting mortgage applicants.

Last month the Mortgage Market Review (MMR) was introduced, designed to better calculate applicants' ability to pay if loan rates rise in the future.

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Insurers Expose £1.3bn In Fraudulent Claims

A record £1.3bn worth of fraudulent insurance claims were uncovered last year as the industry continues to crack down on cheats.

The Association of British Insurers (ABI) said some £3.5m worth of dishonest claims are uncovered every day.

The figures show an 18% increase in the value of fraudulent claims detected in 2012.

In 2013, some 118,599 fraudulent or exaggerated claims were detected, the equivalent of more than 2,000 each week.

Motor insurance claims were the most expensive and common dishonest claims to be uncovered.

The average value of fraud detected across all kinds of insurance products was £10,813.

Aidan Kerr, the ABI's assistant director, said: "The message is clear: never has it been harder to get away with committing insurance fraud.

"Never have the penalties - ranging from a custodial sentence and a criminal record, to difficulties in obtaining financial products in the future - been so severe."

The ABI says the figures also reveal a "significant" rise in the number of people reporting suspected fraudsters.

Calls from members of the public reporting frauds to the Insurance Fraud Bureau's "cheatline" rose by one third (32%) in 2013 compared with the previous year.

Malcolm Tarling, a spokesman for the ABI, said the industry has also seen an increase in the number of "staged accidents".

This dangerous practice sees fraudsters cause deliberate accidents, often with innocent motorists, in order to cause injuries and claim insurance.

"Staged accidents, which are extremely serious, involve criminal gangs deliberately staging an accident, normally involving an innocent motorist," Mr Tarling said.

"These are increasingly becoming more commonplace and the industry is actively working very hard to crack down on them."

One insurer, AA Insurance, said it identifies more than 100 fraud attempts each week.

Simon Douglas, director of AA Insurance, said: "These figures are encouraging because they reflect the growing success of the insurance industry in the war against fraud, rather than more fraud taking place.

"This should send a strong signal to anyone thinking of trying it on."

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Regional Home Price Disparity Widens In April

Help To Buy: 80% Go To First Time Buyers

Updated: 3:26pm UK, Thursday 29 May 2014

Some 80% of the Help To Buy loans granted in the mortgage scheme's first six months were given to first time buyers, the Treasury has said.

A total of 7,313 loans were issued between October last year and March this year, with a total value of £1bn.

The average value of each loan taken out under the controversial scheme was £136,742.

Only about 1% of all mortgages taken out in the period were helped by the scheme, undermining critics of the programme who have said it is prompting a house price bubble.

Most mortgage completions through the scheme were on properties outside London and in regions where prices are lower.

A high proportion of homes supported by the scheme were in the North West and the East of England.

Blackstock property expert Andrew Teacher said: "Today's figures reinforce the fact that Help to Buy has not helped to blow up the London market as numerous commentators have suggested.

"The figures show the scheme has been most effective in areas of reduced growth where prices have remained relatively flat."

The mean value of a property purchased or remortgaged through the scheme is £151,597, compared to a national average house price of £252,000.

A total of 38% of loans were for terraced houses.

The scheme's rollout in October saw only four completions, followed by 164 in November and 818 in December.

However, the monthly figure jumped significantly in the first three months of this year.

In January, completions reached 1,580, while the number rose further in February and March, to 2,090 and 2,657 respectively.

Only 5% - a total of 385 completions - were made on properties in the capital.

The Help To Buy mortgage guarantee scheme was boosted by a second phase equity loan scheme in the spring.

Data for both phases shows a total of 27,861 homes were bought under the scheme, with 85% of sales to first-time buyers.

Prime Minister David Cameron said: "Help to Buy has helped thousands of hardworking people to buy a new home and crucially it is helping to increase the number of new homes being built around the country.

"It is an important part of our long term plan to back those who want to get on and to secure a better future for Britain."

Meanwhile, net lending to small and medium sized businesses as part of the Bank of England's Funding for Lending Scheme dropped  by £723m in Q1, amid a focus on business loans.

The Bank said that between February and March lenders drew just £2bn from the scheme. It was launched in mid-2012 to encourage banks to improve borrowing facilities.

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Tesco Signs Deal For China Joint Venture

Britain's biggest supermarket chain has signed a partnership deal to form China's biggest food retailer.

The joint venture will see Tesco combine its 131 outlets with China Resources Enterprise's (CRE) Vanguard business that already has 2,986 stores.

Tesco will hold a 20% stake and CRE the 80% majority.

Shares in Tesco were up around 1.5% on news of the deal.

The British retail giant, which has seen its dominant home market position weakened by rivals, announced the China venture plan earlier this year.

Tesco chief executive Philip Clarke said: "We're very pleased to have completed this historic agreement."

"The partnership creates a strong platform in one of the world's largest markets.

"We can now combine our strengths to build a profitable multi-channel business, offering our customers in China the best of modern retail."

Part of Tesco's strategy is to successfully expand into China and India to help offset weakness in Europe.

The London-listed company reported its first annual profit drop for almost two decades in 2012/13.

Tesco is the world's third biggest supermarket chain, behind Wal-Mart and Carrefour.

In early 2013 Tesco landed a partnership with India's Tata Group in a plan to become the first foreign supermarket to enter its domestic retail sector - valued at £300bn.

Along with intense competition in its home market, Tesco decided to close its failed US division Fresh & Easy and to exit from the Japanese territory.

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Centrica Confirms Exit Of Weston To Aggreko

The top boss at British Gas is to leave the company, amid a management shake-up at the UK's biggest energy supplier.

Centrica issued a statement saying Chris Weston, managing director of its international downstream business, had tendered his resignation in order to become CEO of Aggreko.

He is expected to join the temporary power group next year, once he has fulfilled his commitments at Centrica.

Details of the energy supplier shake-up were first revealed by Sky News City Editor Mark Kleinman.

Meanwhile, speculation has been mounting about the future of Sam Laidlaw, Centrica's long-serving chief executive.

Centrica said at its annual meeting earlier this month it was beginning the process of exploring options for management succession, with a replacement also due to be found for Nick Luff, its finance director.

The intense row about energy prices is said to have been a factor in recent deliberations of both Mr Laidlaw and Mr Weston, who has only held the British Gas role for 15 months, over their futures.

Kleinman said: "I understand Mr Weston was uncomfortable at the amount of scrutiny the role attracted as the boss of British Gas, especially as he had only been in the role for a short time.

"He was under intense pressure to hand back or give up the £281,000 bonus he received earlier in the year. He didn't do that.

"I think for him, this is an easy way out of the maelstrom that surrounds British Gas and the other big energy companies."

Britain's energy sector is facing a full competition inquiry, turning the heat up even further for the so-called big six suppliers.

Centrica is now expected to try and fill the roles of three top executive positions, including that of its finance director.

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Help To Buy: Most Loans Go To First Time Buyers

Some 80% of the Help To Buy loans granted in the mortgage scheme's first six months were given to first time buyers, the Treasury has said.

A total of 7,313 loans were issued between October last year and March this year, with a total value of £1bn.

The average value of each loan taken out under the controversial scheme was £136,742.

Only about 1% of all mortgages taken out in the period were helped by the scheme, undermining critics of the programme who have said it is prompting a house price bubble.

Most mortgage completions through the scheme were on properties outside London and in regions where prices are lower.

A high proportion of homes supported by the scheme were in the North West and the East of England.

Blackstock property expert Andrew Teacher said: "Today's figures reinforce the fact that Help to Buy has not helped to blow up the London market as numerous commentators have suggested.

"The figures show the scheme has been most effective in areas of reduced growth where prices have remained relatively flat."

The mean value of a property purchased or remortgaged through the scheme is £151,597, compared to a national average house price of £252,000.

A total of 38% of loans were for terraced houses.

The scheme's rollout in October saw only four completions, followed by 164 in November and 818 in December.

However, the monthly figure jumped significantly in the first three months of this year.

In January, completions reached 1,580, while the number rose further in February and March, to 2,090 and 2,657 respectively.

Only 5% - a total of 385 completions - were made on properties in the capital.

The Help To Buy mortgage guarantee scheme was boosted by a second phase equity loan scheme in the spring.

Data for both phases shows a total of 27,861 homes were bought under the scheme, with 85% of sales to first-time buyers.

Prime Minister David Cameron said: "Help to Buy has helped thousands of hardworking people to buy a new home and crucially it is helping to increase the number of new homes being built around the country.

"It is an important part of our long term plan to back those who want to get on and to secure a better future for Britain."

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Nationwide Pre-Tax Profit Up 303% To £677m

The Nationwide building society has reported an annual pre-tax statutory profit of £677m, up more than 300% on the figure last year.

It said that total income for the year ended April 4 was up 16%, at £2.9bn.

The mutual added that gross mortgage lending in the period was up 31% to £28.1bn, giving it a market share of almost 15%.

The number of mortgagees in three-month arrears is 0.63% compared to an industry-wide figure of 1.59%, due to what it called a "prudent approach to lending".

The high street lender has seen a wave of new accounts opened up as disillusioned customers flee its bigger rivals.

It said that during the reporting period 430,000 new current accounts were opened up, an increase of 18% on the previous year.

Nationwide now has 5.5 million current accounts taking its total share to 6.2%, up from 5.7% last year.

The lender said it offers a "compelling alternative to the established banks" and is now a "modern mutual".

Group retail executive director Chris Rhodes told Sky News: "The reality is we are ranked by customers on customer service and out members tend to stay with us.

"And 11% of all current account switching was to Nationwide - we are growing against everyone except Santander."

He added: "A traditional mutual focuses on traditional customers and governance, but Nationwide as a modern mutual holds the values of a traditional business while able to cover all of today's consumers."

Sky News City Editor Mark Kleinman first revealed the boost in account holders it received amid distrust with mainstream rivals.

Nationwide said its credit card business growth rate had reduced amid competitive alternatives offered by rivals.

It opened 272,000 new credit card accounts compared to 350,000 a year beforehand.

But outstanding card balances increased by 12.9% to £1.7bn.

Its tax charge for the year was £128m, giving it an effective rate of 18.9% - more than 4% below the statutory rate.

Just under a third of all Nationwide mortgages are in Greater London, with 35% in central and northern England.

Home movers accounted for 32% of new loans, first time buyers 31%, re-mortgaging 22% and buy to let 14%.

CEO Graham Beale said there could be early signs of a natural correction to house price rises in London, but warned that measures to cool capital prices might have a negative impact elsewhere.

Mr Rhodes told Sky News: "London is up 20% on pre-crash prices while elsewhere it is 2% below pre-crash values.

"The activity we see and feedback from estate agents indicates the London market is slowing a little. We don't see a bubble so we don't see it bursting. The disparity between areas may ease as a result of the correction."

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GSK Probed By SFO In UK Over Bribe Claims

Britain's Serious Fraud Office (SFO) is investigating drugs giant GlaxoSmithKline (GSK) over alleged bribery, it has been confirmed.

The west London-based pharmaceutical firm, the world's sixth largest, said the SFO has opened a "formal criminal investigation".

It comes after Chinese authorities claimed GSK staff had bribed government and health officials in the country.

A company spokesperson said: "GSK is committed to operating its business to the highest ethical standards and will continue to co-operate fully with the SFO."

Shares in GSK were down more than 1.5% in mid-morning London trades.

The firm has been bruised by successive allegations about its business practices in a number of territories.

Although the most damaging investigation into its behaviour has been in China, its conduct in Iraq and Poland has also been probed by local law enforcement officials.

Chinese investigators claimed the former head of GSK's China unit, Mark Reilly, ordered his salespeople to bribe doctors and hospital officials to use the drug company's products.

Officials said it netted the firm more than £100m in "illegal revenue".

Less than two weeks ago Chinese officials said they had charged the former British boss of GSK's China business and other colleagues with corruption.

If allegations are proven, the company risks being fined under the UK Bribery Act or the US Foreign Corrupt Practices Act (FCPA).

From 2008 onwards, fines under the FCPA have been ratcheted up in value, some to nine digits.

The FCPA is designed to prevent corrupt payments to government officials, while UK anti-bribery legislation can be used in cases involving both government and non-government recipients.

The SFO investigation was launched after an inside informant made allegations against GSK.

The unit has also encouraged more people to come forward with claims of bribery against GSK, or any other firm.

A spokeswoman said: "Whistleblowers are valuable sources of information to the SFO in its cases.

"We welcome approaches from anyone with inside information on all our cases including this one - we can be contacted through our secure and confidential reporting channel, which can be accessed via the SFO website."

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Political Battle Over Who Can Make Scots Richer

The battle for Scotland moved to a scrap over who would put more money in the pockets of the Scottish people as conflicting economic visions were presented by each side.

Chief Secretary to the Treasury Danny Alexander claimed staying with the UK would make Scottish people £1,400 richer than if they opted to independent.

Scotland's First Minister said his financial assessment found Scottish households will be £2,000 better off in 15 years, if the country votes to split from the UK.

Both men were presenting competing financial cases for independence at venues just metres away from each other in Edinburgh on Wednesday morning.

According to Mr Salmond, Scotland would be £5bn better off by 2029 if it opted for independence.

However, Mr Alexander said that the start-up costs of an independent Scotland alone would be £1.5bn and said there would be a gap in its public finances from day one.

He accused the Scottish Government of failing to provide proper costings for independence and warned that interest rates would be higher because of an independent Scotland's higher cost of borrowing.

The Scottish Government strongly criticised the figure. File image

Presenting his financial case, Mr Alexander said: "Today we have shown that, by staying together, Scotland's future will be safer, with stronger finances and a more progressive society because as a United Kingdom we can pool resources and share risks.

"It means a UK Dividend of £1,400 a year for every man, woman and child in Scotland.

"That dividend is our share of a more prosperous future. It is the money that will pay for better public services and a fairer society."

Mr Salmond claimed that Scotland's finances in 2016-17 would be similar to, or stronger than, both the UK and the G7 industrialised countries as a whole.

He said: "Scotland is one of the wealthiest countries in the world, more prosperous per head than the UK, France and Japan, but we need the powers of independence to ensure that that wealth properly benefits everyone in our society.

"That wealth means we will start life as an independent nation with strong finances and huge economic potential.

"The latest figures show that by using the powers that only independence will bring we can deliver an independence bonus with increased revenues for Scotland."

Mr Alexander said under independence Scottish people would have to work an extra two weeks before they stopped paying tax and started earning for themselves. Tax Freedom Day for the UK this year is today.

He was dealt a blow overnight when the academic behind the research claimed the Treasury had "badly misrepresented".

Patrick Dunleavy, a professor of politics at the London School of Economics (LSE), says that when Treasury officials used his research to calculate the start-up costs of independence, they overstated the figure by 12 times.

Officials had previously briefed that, partly based on the research of Professor Dunleavy, they estimated the start-up costs for an independent Scottish Government at £2.7bn.

It was a calculation of how much it would cost to set up 180 government departments, in line with recent equivalent costs in Whitehall.

The Scottish Government had strongly criticised the figure, saying it would not need anything like 180 departments and that much of the departmental infrastructure was already in place in Scotland.

The Professor himself echoed the view.

He wrote on Twitter: "UK Treasury press release on Scotland costs of government badly misrepresents LSE research.

"Appears to take minimum Whitehall reorganisation cost of £15m and multiply by 180 agencies to get £2.7bn. Overstates maybe 12 times?"

Later, he tweeted: "Could they be this crude? Phone call from Treasury guy later confirms: Yes, they had been."

Scotland's First Minister Alex Salmond has demanded the Treasury withdraw the figures and apologise.

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InterContinental Rebuffs Secret £6bn US Bid

By Mark Kleinman, City Editor

The FTSE-100 hospitality provider InterContinental Hotels Group (IHG) has rejected a secret takeover bid from the US which valued the company at about £6bn.

Sky News has learnt that IHG's board met a few weeks ago to consider the offer, but dismissed it on the grounds that it was too low.

The identity of the bidder was unclear this weekend, although analysts said it may have been Starwood Hotels & Resorts, the owner of the Le Meridien, St Regis and Westin brands, or a specialist investment fund such as Starwood Capital.

Sources said that IHG was braced for the bidder or a rival to return, with US hotel operators understood to be enticed by the prospect of moving their tax domicile to the UK in a process known as a tax inversion.

That mechanism, which allows US companies to avoid paying tax on their overseas cash holdings, has been at the centre of Pfizer's £69bn offer for AstraZeneca, provoking a political outcry on both sides of the Atlantic.

Senior sources said on Saturday that Pfizer was likely to issue a statement on Monday under Rule 2.8 of the City's Takeover Code, which will confirm its intention not to make a formal bid at this stage for its British pharmaceuticals rival.

Pfizer would then be barred from making another approach for six months, although as Sky News revealed this week, AstraZeneca's biggest investor is pressing it to re-open talks with the US company in three months' time.

The recent approach for IHG, which owns brands such as Crowne Plaza, Holiday Inn and its eponymous chain, could fade away and not be revived, according to insiders.

One added that IHG's stock repurchases in the last fortnight meant that it was not involved in live takeover talks.

Starwood Hotels has a market value of just under $15bn (£8.9bn), while IHG is capitalised at £5.6bn.

The British group is chaired by Patrick Cescau, a former boss of Unilever, and run by Richard Solomons, who has pleased investors with a series of large capital returns.

These have been generated by the sale of many of its flagship hotel properties, including most recently sites in San Francisco and New York, as IHG shifts its business model to hotel management rather than ownership.

IHG still owns the LeGrand Paris and InterContinental Hong Kong, but is also expected to sell these properties and return hundreds of millions of pounds more to shareholders.

It has also been accelerating the expansion of its pipeline of new hotels, with 237 locations opened last year and 444 more added to its roster of future openings.

The company operates about 5% of the world's hotel rooms but has more than twice that volume of the industry's known slate of new rooms.

Last year, IHG reported pre-tax profits of £600m, a 10% rise on the previous year.

Its future growth will be driven by emerging markets, with Hualuxe, a premium brand aimed at Chinese customers, launched in 2012.

A spokeswoman for IHG, shares in which closed up 0.3% on Friday at 2226p, declined to comment.

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Blackstone In Joint Bid For Friends' Tax Arm

By Mark Kleinman, City Editor

The private equity giant Blackstone has joined forces with a US-based specialist insurer to table a bid for the tax planning arm of Friends Life, the FTSE-100 financial services group.

Sky News understands that Blackstone and Philadelphia Financial will make a joint offer for Lombard, which specialises in wealth planning solutions for some of the world's wealthiest people.

Philadelphia Financial targets high net-worth families through a network of intermediaries, and is understood to view Lombard as an attractive opportunity to expand that area of its business.

Friends Life has been in talks to sell the division for more than six months and is understood to have set a deadline in June for offers from interested parties.

Permira, another private equity group, is also expected to lodge a bid, while interest from Warburg Pincus, another private equity firm, is said to have waned.

Responding to Sky News' disclosure of the sale plan last November, Friends Life, which was then called Resolution, said: "Resolution notes the recent speculation in the press regarding the potential disposal of its Lombard division, which comprises Lombard International Assurance S.A. and Insurance Development Holdings AG, and confirms that it is currently in discussions regarding the possible disposal.

"There is no certainty these discussions will result in a transaction being agreed. A further announcement will be made as and when appropriate."

Analysts say the Lombard unit, which is being auctioned by investment bankers at Barclays, could be sold for £400m.

Based in Luxembourg, Lombard offers "wealth planning solutions to high and ultra-high net worth individuals".

The business is viewed as non-core by Friends Life's board and a sale would see the company re-orient itself towards its home market in the UK, analysts said.

Lombard uses Luxembourg's light-touch tax regime to help shield clients' assets from the taxman and is understood to include dozens of billionaires among its key customers.

Insiders said that Friends Life was also likely to consider the sale of Friends Provident International (FPI), which provides life assurance and investment products in Asia, the Middle East and some other markets, in due course, although no sale process for that business had yet been formally planned.

FPI has offices in the United Arab Emirates, Hong Kong, Singapore and the Isle of Man, and primarily distributes through independent financial advisers and strategic partnerships.

Andy Briggs, Friends Life's chief executive, said late last year that it was planning to compete more aggressively with specialist annuity providers such as Just Retirement, which recently floated on the London Stock Exchange.

In March, it issued updated guidance on its plans in the wake of George Osborne's shake-up of the annuities market.

He said: "There is a negative implication for new business flows in the individual annuity market, as some people utilise the increased flexibility provided by the Chancellor's proposals.

"However, we believe that annuities will continue to be an important product for those who value the guaranteed income throughout increasingly long retirement periods."

Blackstone, Permira and Friends Life all declined to comment on Friday.

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AstraZeneca 'Must Link Pay To New Targets'

By Mark Kleinman, City Editor

AstraZeneca should link future executive pay to the price that its board signalled it would be willing to sell the company for, a leading shareholder has told it in a move which intensifies the pressure on it to justify the rejection of a string of takeover bids.

Sky News has learnt that in a letter sent to the British pharmaceuticals group last week, Legal & General Investment Management (LGIM) said long-term share awards should pay out in full only if AstraZeneca's share price reaches £58.85.

That was the level at which the company has said it would be willing to discuss a takeover by Pfizer, its US rival.

Last weekend, Pfizer offered £55-a-share for AstraZeneca, valuing it at £69bn, which was rejected by its prospective merger partner.

It emerged on Wednesday that LGIM was among AstraZeneca shareholders which were disappointed by the decision to spurn Pfizer's offer, which is expected to lapse on Monday when a deadline expires for it to lodge a formal bid.

Sources said that LGIM, which owns approximately 3.5% of AstraZeneca and is its sixth-largest investor, had also called for executives' pay to be linked to a $45bn (£26.7bn) revenue forecast which was outlined by the drugs-maker's chief executive, Pascal Soriot, as part of its defence against Pfizer's approach.

LGIM's demand goes further than those of other AstraZeneca shareholders, a number of which have called for pay to be partly-determined by the shares hitting £55, the level of the most recent Pfizer offer.

"If the remuneration committee of AstraZeneca – and, indeed, any company rejecting an offer in favour of long-term independence – was to recalibrate any current and future incentives to vest only at the level of the spurned takeover, it would provide comfort to shareholders that if things do not play out as the management envisage, the executives have shared in the pain felt by shareholders at the lost opportunity," Richard Buxton, head of UK equities at Old Mutual Global Investors, wrote in a letter to the Financial Times.

AstraZeneca investors are divided about the board's handling of the bid, with its shares closing on Friday at £43.28.

Last week, Schroders issued a statement criticising the actions of both companies, while Sky News revealed that BlackRock, AstraZeneca's biggest shareholder, wants it to invite Pfizer to reopen merger talks.

Those which have backed the board's stance that AstraZeneca would be stronger as a standalone business include Fidelity Investments, M&G Investments and Woodford Investment Management.

Under rules supervised by the City takeover watchdog, Pfizer will be prohibited from making a further offer for AstraZeneca for six months if it abandons its interest. It has said it will not make a hostile bid by going directly to AstraZeneca's shareholders.

However, the British group, which will set out further details of its cancer drug pipeline at a key industry conference in the US this week, could approach Pfizer to enter talks in three months' time.

Pfizer's interest in AstraZeneca has sparked a row in Westminster about the US company's track record in research and development.

LGIM, AstraZeneca and Pfizer all declined to comment.

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RBS And NatWest Hit By Mobile Banking Glitch

Mobile banking services for RBS and NatWest have been hit by an IT glitch, along with an unconnected problem that affected some Lloyds, Halifax and Bank of Scotland online users.

In a statement given to Sky News, a spokesperson for RBS Group said: "Some customers may have had trouble getting into mobile banking today between 8.40am and 2.30pm.

"All services are back up and running as normal.  We apologise for any inconvenience this caused."

A spokesman for Lloyds Banking Group said there was a temporary issue on Friday morning that affected mobile and online services for a small number of customers who were trying to set up payments at Lloyds, Halifax and Bank of Scotland.

The apology seen by NatWest smartphones users

A Lloyds spokesman said: "We are aware that a small number of customers experienced issues accessing payments this morning.

"The issue has now been rectified and we are working with those customers who were affected."

The RBS Group has been hit be a sequence of system-wide IT failures in the past, which affected RBS, NatWest and Ulster Bank.

More recently, it has suffered 'pay day problems'  in the past, when workers expect to see funds enter their accounts.

Branch and cash machines are believed to be unaffected by the latest woes.

In its last annual results, the group said it was investing heavily in computer infrastructure to modernise its systems.

A number of banks were affected in February when workers expected funds to be deposited.

According to the British Bankers' Association, the use of mobile devices for banking services has doubled in the past 12 months.

RBS saw more than 17 million log ins in one week, through its mobile app, earlier this month.

In late December the group was hit by its fourth IT failure, after a cyber attack left online users unable to access accounts.

That followed an outage in early December, on one of the year's busiest shopping days.

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Blackstone In Joint Bid For Friends' Tax Arm

By Mark Kleinman, City Editor

The private equity giant Blackstone has joined forces with a US-based specialist insurer to table a bid for the tax planning arm of Friends Life, the FTSE-100 financial services group.

Sky News understands that Blackstone and Philadelphia Financial will make a joint offer for Lombard, which specialises in wealth planning solutions for some of the world's wealthiest people.

Philadelphia Financial targets high net-worth families through a network of intermediaries, and is understood to view Lombard as an attractive opportunity to expand that area of its business.

Friends Life has been in talks to sell the division for more than six months and is understood to have set a deadline in June for offers from interested parties.

Permira, another private equity group, is also expected to lodge a bid, while interest from Warburg Pincus, another private equity firm, is said to have waned.

Responding to Sky News' disclosure of the sale plan last November, Friends Life, which was then called Resolution, said: "Resolution notes the recent speculation in the press regarding the potential disposal of its Lombard division, which comprises Lombard International Assurance S.A. and Insurance Development Holdings AG, and confirms that it is currently in discussions regarding the possible disposal.

"There is no certainty these discussions will result in a transaction being agreed. A further announcement will be made as and when appropriate."

Analysts say the Lombard unit, which is being auctioned by investment bankers at Barclays, could be sold for £400m.

Based in Luxembourg, Lombard offers "wealth planning solutions to high and ultra-high net worth individuals".

The business is viewed as non-core by Friends Life's board and a sale would see the company re-orient itself towards its home market in the UK, analysts said.

Lombard uses Luxembourg's light-touch tax regime to help shield clients' assets from the taxman and is understood to include dozens of billionaires among its key customers.

Insiders said that Friends Life was also likely to consider the sale of Friends Provident International (FPI), which provides life assurance and investment products in Asia, the Middle East and some other markets, in due course, although no sale process for that business had yet been formally planned.

FPI has offices in the United Arab Emirates, Hong Kong, Singapore and the Isle of Man, and primarily distributes through independent financial advisers and strategic partnerships.

Andy Briggs, Friends Life's chief executive, said late last year that it was planning to compete more aggressively with specialist annuity providers such as Just Retirement, which recently floated on the London Stock Exchange.

In March, it issued updated guidance on its plans in the wake of George Osborne's shake-up of the annuities market.

He said: "There is a negative implication for new business flows in the individual annuity market, as some people utilise the increased flexibility provided by the Chancellor's proposals.

"However, we believe that annuities will continue to be an important product for those who value the guaranteed income throughout increasingly long retirement periods."

Blackstone, Permira and Friends Life all declined to comment on Friday.

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InterContinental Rebuffs Secret £6bn US Bid

By Mark Kleinman, City Editor

The FTSE-100 hospitality provider InterContinental Hotels Group (IHG) has rejected a secret takeover bid from the US which valued the company at about £6bn.

Sky News has learnt that IHG's board met a few weeks ago to consider the offer, but dismissed it on the grounds that it was too low.

The identity of the bidder was unclear this weekend, although analysts said it may have been Starwood Hotels & Resorts, the owner of the Le Meridien, St Regis and Westin brands, or a specialist investment fund such as Starwood Capital.

Sources said that IHG was braced for the bidder or a rival to return, with US hotel operators understood to be enticed by the prospect of moving their tax domicile to the UK in a process known as a tax inversion.

That mechanism, which allows US companies to avoid paying tax on their overseas cash holdings, has been at the centre of Pfizer's £69bn offer for AstraZeneca, provoking a political outcry on both sides of the Atlantic.

Senior sources said on Saturday that Pfizer was likely to issue a statement on Monday under Rule 2.8 of the City's Takeover Code, which will confirm its intention not to make a formal bid at this stage for its British pharmaceuticals rival.

Pfizer would then be barred from making another approach for six months, although as Sky News revealed this week, AstraZeneca's biggest investor is pressing it to re-open talks with the US company in three months' time.

The recent approach for IHG, which owns brands such as Crowne Plaza, Holiday Inn and its eponymous chain, could fade away and not be revived, according to insiders.

One added that IHG's stock repurchases in the last fortnight meant that it was not involved in live takeover talks.

Starwood Hotels has a market value of just under $15bn (£8.9bn), while IHG is capitalised at £5.6bn.

The British group is chaired by Patrick Cescau, a former boss of Unilever, and run by Richard Solomons, who has pleased investors with a series of large capital returns.

These have been generated by the sale of many of its flagship hotel properties, including most recently sites in San Francisco and New York, as IHG shifts its business model to hotel management rather than ownership.

IHG still owns the LeGrand Paris and InterContinental Hong Kong, but is also expected to sell these properties and return hundreds of millions of pounds more to shareholders.

It has also been accelerating the expansion of its pipeline of new hotels, with 237 locations opened last year and 444 more added to its roster of future openings.

The company operates about 5% of the world's hotel rooms but has more than twice that volume of the industry's known slate of new rooms.

Last year, IHG reported pre-tax profits of £600m, a 10% rise on the previous year.

Its future growth will be driven by emerging markets, with Hualuxe, a premium brand aimed at Chinese customers, launched in 2012.

A spokeswoman for IHG, shares in which closed up 0.3% on Friday at 2226p, declined to comment.

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RBS And NatWest Hit By Mobile Banking Glitch

Mobile banking services for RBS and NatWest have been hit by an IT glitch, along with an unconnected problem that affected some Lloyds, Halifax and Bank of Scotland online users.

In a statement given to Sky News, a spokesperson for RBS Group said: "Some customers may have had trouble getting into mobile banking today between 8.40am and 2.30pm.

"All services are back up and running as normal.  We apologise for any inconvenience this caused."

A spokesman for Lloyds Banking Group said there was a temporary issue on Friday morning that affected mobile and online services for a small number of customers who were trying to set up payments at Lloyds, Halifax and Bank of Scotland.

The apology seen by NatWest smartphones users

A Lloyds spokesman said: "We are aware that a small number of customers experienced issues accessing payments this morning.

"The issue has now been rectified and we are working with those customers who were affected."

The RBS Group has been hit be a sequence of system-wide IT failures in the past, which affected RBS, NatWest and Ulster Bank.

More recently, it has suffered 'pay day problems'  in the past, when workers expect to see funds enter their accounts.

Branch and cash machines are believed to be unaffected by the latest woes.

In its last annual results, the group said it was investing heavily in computer infrastructure to modernise its systems.

A number of banks were affected in February when workers expected funds to be deposited.

According to the British Bankers' Association, the use of mobile devices for banking services has doubled in the past 12 months.

RBS saw more than 17 million log ins in one week, through its mobile app, earlier this month.

In late December the group was hit by its fourth IT failure, after a cyber attack left online users unable to access accounts.

That followed an outage in early December, on one of the year's busiest shopping days.

18.56 | 0 komentar | Read More

Blackstone In Joint Bid For Friends' Tax Arm

By Mark Kleinman, City Editor

The private equity giant Blackstone has joined forces with a US-based specialist insurer to table a bid for the tax planning arm of Friends Life, the FTSE-100 financial services group.

Sky News understands that Blackstone and Philadelphia Financial will make a joint offer for Lombard, which specialises in wealth planning solutions for some of the world's wealthiest people.

Philadelphia Financial targets high net-worth families through a network of intermediaries, and is understood to view Lombard as an attractive opportunity to expand that area of its business.

Friends Life has been in talks to sell the division for more than six months and is understood to have set a deadline in June for offers from interested parties.

Permira, another private equity group, is also expected to lodge a bid, while interest from Warburg Pincus, another private equity firm, is said to have waned.

Responding to Sky News' disclosure of the sale plan last November, Friends Life, which was then called Resolution, said: "Resolution notes the recent speculation in the press regarding the potential disposal of its Lombard division, which comprises Lombard International Assurance S.A. and Insurance Development Holdings AG, and confirms that it is currently in discussions regarding the possible disposal.

"There is no certainty these discussions will result in a transaction being agreed. A further announcement will be made as and when appropriate."

Analysts say the Lombard unit, which is being auctioned by investment bankers at Barclays, could be sold for £400m.

Based in Luxembourg, Lombard offers "wealth planning solutions to high and ultra-high net worth individuals".

The business is viewed as non-core by Friends Life's board and a sale would see the company re-orient itself towards its home market in the UK, analysts said.

Lombard uses Luxembourg's light-touch tax regime to help shield clients' assets from the taxman and is understood to include dozens of billionaires among its key customers.

Insiders said that Friends Life was also likely to consider the sale of Friends Provident International (FPI), which provides life assurance and investment products in Asia, the Middle East and some other markets, in due course, although no sale process for that business had yet been formally planned.

FPI has offices in the United Arab Emirates, Hong Kong, Singapore and the Isle of Man, and primarily distributes through independent financial advisers and strategic partnerships.

Andy Briggs, Friends Life's chief executive, said late last year that it was planning to compete more aggressively with specialist annuity providers such as Just Retirement, which recently floated on the London Stock Exchange.

In March, it issued updated guidance on its plans in the wake of George Osborne's shake-up of the annuities market.

He said: "There is a negative implication for new business flows in the individual annuity market, as some people utilise the increased flexibility provided by the Chancellor's proposals.

"However, we believe that annuities will continue to be an important product for those who value the guaranteed income throughout increasingly long retirement periods."

Blackstone, Permira and Friends Life all declined to comment on Friday.

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InterContinental Rebuffs Secret £6bn US Bid

By Mark Kleinman, City Editor

The FTSE-100 hospitality provider InterContinental Hotels Group (IHG) has rejected a secret takeover bid from the US which valued the company at about £6bn.

Sky News has learnt that IHG's board met a few weeks ago to consider the offer, but dismissed it on the grounds that it was too low.

The identity of the bidder was unclear this weekend, although analysts said it may have been Starwood Hotels & Resorts, the owner of the Le Meridien, St Regis and Westin brands, or a specialist investment fund such as Starwood Capital.

Sources said that IHG was braced for the bidder or a rival to return, with US hotel operators understood to be enticed by the prospect of moving their tax domicile to the UK in a process known as a tax inversion.

That mechanism, which allows US companies to avoid paying tax on their overseas cash holdings, has been at the centre of Pfizer's £69bn offer for AstraZeneca, provoking a political outcry on both sides of the Atlantic.

Senior sources said on Saturday that Pfizer was likely to issue a statement on Monday under Rule 2.8 of the City's Takeover Code, which will confirm its intention not to make a formal bid at this stage for its British pharmaceuticals rival.

Pfizer would then be barred from making another approach for six months, although as Sky News revealed this week, AstraZeneca's biggest investor is pressing it to re-open talks with the US company in three months' time.

The recent approach for IHG, which owns brands such as Crowne Plaza, Holiday Inn and its eponymous chain, could fade away and not be revived, according to insiders.

One added that IHG's stock repurchases in the last fortnight meant that it was not involved in live takeover talks.

Starwood Hotels has a market value of just under $15bn (£8.9bn), while IHG is capitalised at £5.6bn.

The British group is chaired by Patrick Cescau, a former boss of Unilever, and run by Richard Solomons, who has pleased investors with a series of large capital returns.

These have been generated by the sale of many of its flagship hotel properties, including most recently sites in San Francisco and New York, as IHG shifts its business model to hotel management rather than ownership.

IHG still owns the LeGrand Paris and InterContinental Hong Kong, but is also expected to sell these properties and return hundreds of millions of pounds more to shareholders.

It has also been accelerating the expansion of its pipeline of new hotels, with 237 locations opened last year and 444 more added to its roster of future openings.

The company operates about 5% of the world's hotel rooms but has more than twice that volume of the industry's known slate of new rooms.

Last year, IHG reported pre-tax profits of £600m, a 10% rise on the previous year.

Its future growth will be driven by emerging markets, with Hualuxe, a premium brand aimed at Chinese customers, launched in 2012.

A spokeswoman for IHG, shares in which closed up 0.3% on Friday at 2226p, declined to comment.

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Barclays Fined £26m Over Trader's Gold Fixing

Barclays Bank has been fined more than £26m by the City watchdog over failings related to gold price manipulation by one of its former traders.

The Financial Conduct Authority (FCA) said the bank failed to adequately manage conflicts of interest between itself and customers.

It said oversight failures occurred between 2004 and 2013 led to the £26,033,500 fine.

The trader manipulated the rate in the bank's interest just a day after UK and US regulators fined it $450m (£290m) over attempted rigging of the Libor - an interbank lending rate - that has global impact.

Barclays was fined for oversight failures and not for the price manipulation by the worker.

It agreed to settle the case at an early stage, saving itself a 30% additional penalty.

Gold fixing is a financial term used to describe the somewhat arcane price-setting mechanism that allows investors to buy and sell gold at a single quoted price.

Barclays is one of four banks that sets the price of the precious metal twice a day, in US dollars, on the London Gold Exchange and in Paris and Zurich.

It joined the group in 2004, and the other members are Scotiabank, Societe Generale and HSBC.

The FCA said: "On 28 June 2012, former Barclays trader Daniel James Plunkett exploited the weaknesses in Barclays' systems and controls to seek to influence that day's 3pm setting of the gold price and thereby profited at a customer's expense.

Barclays boss Antony Jenkins has apologised for the latest scandal

"As a result of Plunkett's actions, Barclays was not obligated to make a $3.9m (£2.3m) payment to its customer, although it later compensated the customer in full.

"Plunkett's actions boosted his own trading book by $1.75m - £1m - (excluding hedging)."

The watchdog also fined Mr Plunkett £95,600 and has banned him from performing any function in relation to any regulated activity.

He can, however, work in financial markets in other countries.

The FCA said the trader used the phrase "mini puke" in an email to describe the drop in gold price ahead of the June 28 pricing figure.

Responding to the latest fine imposed by regulators, Barclays CEO Antony Jenkins said: "We very much regret the situation that led to this settlement.

"Barclays has undertaken a significant amount of work to enhance our systems and controls and is committed to the highest standards across all of our operations."

Meanwhile, the chairman of the Treasury Select Committee welcomed the ongoing attempts to improve integrity of the much-maligned banking sector.

Andrew Tyrie MP, the former chairman of the Parliamentary Commission on Banking Standards, said: "It is essential that the regulators do what is necessary to give us confidence that the integrity of these markets is being maintained.

"It is equally essential that the drive to improve standards with the fundamental reforms outlined by the Parliamentary Commission among others is maintained."

The gold price manipulation scandal is the latest issue to tarnish the reputation of Barclays.

It recently suffered a shareholder backlash - announcing a 32% fall in annual profits to £5.2bn but raising its staff bonus pool by 10% to £2.38bn.

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New Trains In Seven-Year Rail Franchise Win

Three new state-of-the-art electric train fleets are to be rolled out on the busiest rail routes in London and the South East.

The new Thameslink, Southern and Great Northern (TSGN) franchise will be run by Govia, with rival FirstGroup missing out.

Govia has been awarded a seven-year contract, which includes construction of nearly 1,400 new carriages.

Govia is 65% owned by the Go-Ahead Group and 35% by France's Keolis.

The franchise will carry more than 280 million passengers annually.

Go-Ahead Group CEO David Brown said: "I'm delighted the (Depatment for Transport) has chosen us to operate this important and complex franchise and to play an instrumental role in delivering the benefits of the Government's £6bn Thameslink programme.

"This will be the UK's busiest franchise and we will be introducing 50% more capacity into central London during peak times, with 26% more morning peak carriages providing 10,000 additional seats."

Services and capacity are expected to be improved to scores of destinations, including Brighton, King's Lynn, Cambridge, Peterborough, Bedford, Luton and Gatwick.

The improved service is due to be fully operational by the end of 2018 and will also include improved staffing and stations, along with a simplified ticket structure.

Rail minister Stephen Hammond said: "A world-class railway is a vital part of our long-term economic plan.

The improved service and trains will be spread across the South East

"That's great news for businesses and the hundreds of thousands of passengers who use these vital services every day."

The new franchise, the largest ever in terms of passenger numbers, is a blow to the current Thameslink operator FirstGroup.

Govia presently operates the other rail contract incorporated into the new franchise.

Twenty-four trains will be able to travel between Blackfriars and St Pancras each hour.

New tunnels will also link Peterborough and Cambridge to the existing Thameslink network, boosting access from the North to Gatwick and Brighton.

Govia beat competition from four short-listed bidders - Abellio, FirstGroup, MTR and Stagecoach - to run the key commuter contract from September.

The Go-Ahead Group's partner Keolis is 70% owned by French rail operator SNCF.

After the announcement, FirstGroup CEO Tim O'Toole said: "I am disappointed that we will not be operating the new franchise and taking the Thameslink programme on to its next stage.

"We submitted a strong bid which would have delivered high quality services for passengers, value for taxpayers and an economic return for shareholders."

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RBS And NatWest Hit By Mobile Banking Glitch

Mobile banking services for RBS and NatWest have been hit by an IT glitch, along with potential problems affecting Lloyds, Halifax and Bank of Scotland.

In a statement given to Sky News, a spokesperson for RBS Group said: "We are aware that some customers are experiencing issues with mobile banking, we are working to get this resolved as quickly as possible.

"We apologise to customers for the inconvenience."

A spokesman for Lloyds said the company was looking into the issue that may be affecting customers for it, Halifax and Bank of Scotland.

The apology seen by NatWest smartphones users

The RBS Group has been hit be a sequence of system-wide IT failures in the past, which affected RBS, NatWest and Ulster Bank.

More recently, it has suffered 'pay day problems'  in the past, when workers expect to see funds enter their accounts.

Branch and cash machines are believed to be unaffected by the latest woes.

In its last annual results, the group said it was investing heavily in computer infrastructure to modernise its systems.

A number of banks were affected in February when workers expected funds to be deposited.

According to the British Bankers' Association, the use of mobile devices for banking services has doubled in the past 12 months.

RBS saw more than 17 million log ins in one week, through its mobile app, earlier this month.

In late December the group was hit by its fourth IT failure, after a cyber attack left online users unable to access accounts.

That followed an outage in early December, on one of the year's busiest shopping days.

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Meet Darkcoin - Bitcoin's Shadowy Cousin

Cryptocurrency Darkcoin - known as the shadowy cousin of Bitcoin - is booming.

In just one month, the value of the little-known alternative online currency has soared from 75 cents (45p) to $7 (£4.14).

Its main selling point is its increased anonymity in comparison to Bitcoin - meaning it is very difficult to trace a payment to a person.

Cryptocurrencies like Bitcoin have soared in popularity, and have become notorious as a way to buy drugs, weapons and other illicit items online.

Darkcoin is one of the fastest-growing cryptocurrencies, and the total value of its combined coins is around $30m (£17.8m).

The extra layer of anonymity comes from the way Darkcoin jumbles up the transactions individual users make with those of two other users.

The feature, called Darksend, means discovering where a user's cash has ended up is more difficult.

Bitcoin consultant Kristov Atlas told Wired he believed the price rise was based on the privacy features, and was not just a bubble.

He said: "It's not purely a speculative bubble. There's some solid indications the market price is currently based on the fundamental value of the coin."

Bitcoin trader Allen Price added: "I had sort of smugly stood to the side waiting for the big, inevitable crash with an 'I told you so' ready.

"But no crash ever really came, and it's been kind of an ongoing success for investors."

Like Bitcoin, Darkcoin can be "mined" by anyone who repeatedly carries out a specific computer function using powerful hardware.

The value of the currency is based on trades between creators and owners of the Darkcoin.

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Royal Mail Posts £430m In Full-Year Profits

Royal Mail has reported an operating profit of £430m in its first full-year results since privatisation.

The figure for the 12 months to March, after transformation costs, is up from £403m in the previous year - a rise of 6.7%.

But the company warns it is facing a number of "headwinds" including increasing competition in parcels.

The Royal Mail also warned a move to direct delivery of letters by rivals TNT Post could threaten the financial sustainability of the universal service without action by the regulator Ofcom.

The company is legally obliged to deliver to every address in the country for a single price, and it warns the TNT plans could lose the firm £200m.

Chief executive Moya Greene said: "We can't just sit around waiting for the damage to be done, there has to be action now. Ofcom's duty is to secure the financial sustainability of the Universal Service Obligation."

But an Ofcom spokesman said: "We do not believe that there is presently a threat to the financial sustainability of the universal postal service.

"We have a duty to secure the universal service, and if we identify any future threat we have powers to step in to protect it.

"We would expect Royal Mail to take appropriate steps to respond to the challenge posed by competition, including improving efficiency."

Parcels now contribute more than 50% of Royal Mail's revenue - £4.82bn - after a 7% rise, although volumes remained flat.

On Wednesday, the firm announced it will start delivering parcels and opening delivery offices on Sundays, in response to the rapid growth of online shopping.

Ms Greene said: "The competitive environment on the parcels side is more intense. We are taking steps to remain the leader in this growing market."

The group's letters performance was at the better end of expectations, with revenues down 2% to £4.6bn on a year earlier.

The amount of letters fell by 4%, but the trend improved over the year due to better economic conditions and one-off factors such as energy companies writing to customers about price rises.

Shares in the firm opened more than 3% lower. However at 553p the stock is still much higher than the 330p valuation placed at the time of the flotation.

The Government still own a 30% stake in Royal Mail, which was sold off last autumn.

But the privatisation was heavily criticised for not delivering value for money for the taxpayer.

The Government robustly defended the sale against sharp criticism from the National Audit Office, which found that "deep caution" shown by ministers when pricing shares in the Royal Mail cost the taxpayer more than £1bn.

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Zoopla 'Worth £1.2bn' After Stock Market Float

Zoopla, the UK's second-largest property website, has announced plans to float on the stock exchange with a proposed value of £1.2bn.

The sale of at least 25% of the firm, which only launched in 2008, aims to tap into the upturn in the housing market.

The company's last half-year revenues were just over £38m.

The offer will only be open to financial institutions, such as banks and pension funds, and estate agents and developers.

Some 86% of Zoopla revenues come from estate agents' fees.

Zoopla founder declined to predict how much the share offer would raise

The website has 40 million users a month.

Only shares held by its existing owners, including founder Alex Chesterman and the Daily Mail Group Trust (DMGT), will be sold.

Mr Chesterman, the company's chief executive declined to predict how much the share offer would raise but said he expected DMGT - which holds a 52.6% stake - to remain the largest shareholder.

He said the firm plans to launch additional products and services after the sale and to expand into other parts of the property market, such as commercial property, with overseas expansion a possibility in the future.

He said: "With over 40 million visits per month to our websites and mobile applications, generating over two million inquiries every month for our members, Zoopla Property Group has become an indispensable link in the property search process for consumers and the property marketing process for professionals across the UK."

The move comes as the fashion chain FatFace ditched plans to float, following disappointing stock market debuts by other businesses.

The firm, which is controlled by the private equity firm Bridgepoint and has former M&S boss Sir Stuart Rose as its chairman, said current market conditions were largely to blame for the decision.

It added: "The board remains confident in the prospects for the business and will continue to execute the growth plans which are already underway."

In recent weeks, Card Factory, another retailer, has disappointed after coming to the market, while Saga said it is cutting the price range for its despite what it claimed was buoyant demand.

Meanwhile, the discount chain B&M headed by former Tesco chief executive Sir Terry Leahy, has confirmed its intention to join the stock market in the coming weeks.

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Royal Mail Launches Sunday Parcel Deliveries

Royal Mail is to start delivering parcels and opening delivery offices on Sundays, in response to the rapid growth of online shopping.

The recently-privatised firm says parcels will be delivered on Sundays later this summer to addresses within the M25. 

Around 100 of the busiest delivery offices will open on Sunday afternoons as part of the pilot.

The group's express parcels business, Parcelforce Worldwide, will also launch a Sunday delivery service in June for online shoppers through participating e-retailers.

Parcelforce Worldwide will make the service available to contract customers across the UK.

Shoppers who choose the Sunday service through registered retailers will receive a text message between 30 and 90 minutes before delivery.

Royal Mail said the changes were being introduced under an agreement with the Communication Workers Union (CWU).

Chief executive Moya Greene said: "Through these new Sunday services we are exploring ways to improve our flexibility and provide more options for people to receive items they have ordered online."

Union support for the move had enabled the company to "respond quickly to a changing market", she added.

CWU deputy general secretary Dave Ward said: "Royal Mail's announcement about expanding delivery and collection services to seven days a week is an exciting innovation which we welcome.

"We appreciate that in order to stay competitive in a broadly unregulated sector, Royal Mail has to expand its services to its customers.

"We believe that offering Sunday delivery and collection services is the right response from the company.

"With ever-increasing numbers of people opting to shop online, Sunday services are necessary to deal with the growing demand in parcel delivery.

"The union is negotiating with Royal Mail nationally to ensure that postal workers who are affected by these changes receive good terms and conditions and, where appropriate, that work is performed on a voluntary basis."

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UK Retail Sales Growth Hits 10-Year High

A late Easter helped boost UK retail sales to a 7.7% growth rate year-on-year, officially relased figures have revealed.

The Office for National Statistics (ONS) said retail sales volumes jumped by 1.3% on the March figure, and 6.9% on the year - the highest since May 2004.

A consensus among economists had forecast the rise to be around 0.5% on the month and 5.2% on the year.

The ONS said food sales jumped 3.6% in April compared to March, and 6.3% on the year, taking the rate to its highest level for more than 12 years.

It said the spike in food sales was due to better weather and promotions in-store.

Non-food store sales rose 6.5% year-on-year but were down 0.4% on the month.

The increase in consumer spending has become a key driver of Britain's modest recovery from the financial crisis more than five years ago.

A trend in easing inflation and gentle wage growth, along with record low mortgage rates, has helped boost spending.

However ONS figures released on Tuesday showed inflation rising 0.2% month-on-month, eating into the wage recovery.

Figures from the Council of Mortgage Lenders (CML), also released on Wednesday, showed gross mortgage lending was an estimated £16.6bn in April - 8% higher than March's total.

The CML added that it was 36% higher than April last year and the highest total for an April since 2008 when it was £25.7bn.

Click and collect, and smartphone usage to research prices, is increasingly seen as a driver for high street purchases.

Meanwhile, the sector known as non-store/repair saw the biggest jump out of eight retail areas classified by the ONS.

It said year-on-year that sector grew by 25.1%, and 5.9% month-on-month.

But spending on fuel dropped both on the month and compared to last year, due to price suppression.

Figures showed motorists spent 3.7% less on fuel in April compared to March, and 0.7% down on the April 2013 figure.

Deloitte UK head of retail Ian Geddes said: "It is encouraging to finally see some strong figures in the food sector, as this remains a challenging market for the large grocers who are vigorously responding to consumers' changing retail habits and, are currently implementing significant structural reorganisation.

"This is clearly a long race and the large grocers are repositioning themselves to win over customers in the new, more complex era of multichannel retailing."

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SSE Sees Profit Up 9.6% Amid Price Hikes

Energy giant SSE has seen its full-year adjusted pre-tax profit rise by 9.6% to £1.55bn, just months after announcing price increases.

But it saw the retail division operating profit fall 28.6% to £292m in the year to March 31 as energy usage plunged during the mild winter.

SSE is Britain's second largest provider of household energy and announced it would increase prices last autumn.

It said increased output from renewable energy helped its wholesale arm's operating profit rise to £634.6m - up 24.8%.

During the last year SSE has topped several customer complaint league tables compiled by consumer groups.

SSE lost 370,000 customers during the year - more than 1,000 a day - in a drift towards smaller and independent providers.

In a swipe at the likely backlash over profits, it pointed to a report by accounting giant PwC which found that in the previous financial year the energy firm contributed £9.1bn to UK gross domestic product and supported 112,000 jobs.

Sky's Eamonn Holmes interviewed SSE Group managing director Will Morris after the results were released.

Asked by Holmes if the company would reduce prices for consumers amid reducing wholesale prices, Mr Morris said: "It has been a tough year.

"We will look constantly and if there is a sustained fall ... We know customers care most about having certainty and peace of mind."

A political and consumer backlash over energy firms raising prices saw SSE decide to freeze its energy tariffs last March, until January 2016.

The company's electricity transmission operating profit however, rose by nearly half due to a major increase in investment which its chairman Robert Smith said would continue with a net investment of around £5.5bn over four years in the network.

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Consumer Inflation Rises In April To 1.8%

The consumer prices index (CPI) for April hit 1.8%, according to officially released figures.

The Office for National Statistics (ONS) said it was a rise of 0.2% on the March figure.

The rise was more than expected, up from its lowest level in more than four years.

Chancellor George Osborne called March's figure of 1.6% "welcome news for families" and will now be under pressure to address the rise.

The ONS said the late Easter break helped push up the cost of travelling.

Fuel prices were flat in April, compared to a 2.1p per litre month-on-month fall recorded in 2013.

Food prices, especially for vegetables, helped cap the rise. Vegetables dropped 2.3% between March and April and fish prices dropped 3.4%.

Non-alcoholic drinks and food inflation fell 0.5% in the month, but it is unclear if this was due to increased competition in the supermarket sector.

Core CPI, which excludes food and other household components, rose 2% - the strongest rate since September.

The Chancellor is under pressure to explain the inflation-wage disparity

The Bank of England (BoE) target for inflation is 2% and the CPI has now been below that figure for five months.

The CPI's six-month period of falls has now come to an end.

Weaker price growth has helped salaries and wages recoup lost ground since the 2008 financial crisis.

However the latest figure show wage increases in April of 1.7% have now lost out to inflation again.

The separate measure of inflation known as the retail prices index (RPI) remained static at 2.5%, according to the ONS.

The RPI includes housing costs in the calculation.

Meanwhile, the ONS said house prices were up 8% in March, year-on-year, slowing from a 9.2% figure in February.

The low level of inflation is helping the BoE to keep the base rate at its historic low of 0.5%, which have a direct impact on mortgage rates offered by lenders.

Responding to the unplanned CPI rise, Trades Union Congress general secretary Frances O'Grady said: "Last month we were told the living standards crisis was over, yet one month later real wages are falling again.

"Even on a measure that excludes the cost of housing, prices are rising faster than wage packets.

"It will be years before workers even recover the earnings they have lost since 2008, let alone start to feel any better off."

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M&S Annual Profits Drop For Third Year In A Row

Marks and Spencer has a revealed a 3.9% drop in full-year underlying pre-tax profit to £623m.

It was the third annual profit fall in a row for the high street icon.

The company said its like-for-like UK sales for general merchandise, which includes clothes and furnishings, were down 1.4% in the year until March 29.

In the same period its like-for-like food sales outperformed the wider market and were up 1.7%.

Mr Bolland has been in the top job at M&S since 2010

M&S has invested heavily during the last three years to try and revive its general merchandise business.

For the first time the profit outcome is below the annual profit made by faster growing fashion rival Next.

Total UK sales were up 2.3% in the year but general merchandise remained at 0%.

Multi-channel sales, including online and mobile, were up 22.8%.

It said the company's newly launched website would take up to six months "to settle in" and therefore revenue for the current quarter is expected to be adversely affected.

Chief executive Marc Bolland said: "We are focused on improving our performance in general merchandise and were pleased to see early signs of improvement.

"Our food business had a very strong year, consistently outperforming the market."

Last week Mr Bolland, who has now been in the job four years, announced a new campaign to push 19 million customers online.

He added: "Three years ago, we recognised the scale of investment required to transform our business, investing to strengthen our foundations and improve our customer offer.

"We are making solid progress on this journey and are now focused on delivery."

Sales at M&S were down for the eleventh quarter in a row last quarter, although clothing purchases did rise slightly.

The company was able to reduce its net debut by 6% in the year, to £2.46bn.

It said 2013/14 was a "significant year on our journey" as it seeks to transform itself from a traditional UK chain to "an international, multi-channel retailer".

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House Prices Up As PM Mulls Help To Buy Future

House prices have risen 8% in the year to March, figures have shown, as David Cameron said he would "consider" changes to the Help To Buy scheme if advised to do so by the Bank of England.

While the increase is down on the 9.2% rise announced in February, according to the Office for National Statistics, the continued strong price growth, particularly in London and the South East, is set to fuel criticism of the Government scheme which underwrites home loans for people without large deposits.

Bank of England governor Mark Carney told Sky News at the weekend that the housing market had "deep, deep" problems.

In an interview with Sky's Murnaghan show, Mr Carney warned rising house prices represented the biggest current risk to the economy.

Mr Cameron says Help To Buy has helped tens of thousands of people

In response, the Prime Minister indicated he was open to rethinking Help To Buy, which critics argue contributes to forcing up house prices by fuelling demand, which far outstrips the supply of available homes.

Asked if he would look at reducing the programme's £600,000 threshold, Mr Cameron said: "Of course, we will consider any changes that are proposed by Mark Carney.

"But, as he said, this is a well-targeted scheme and it's helped tens of thousands of people get on the housing ladder and to have mortgages."

The PM was speaking ahead of the release of the ONS report which said property values continued to increase "strongly across most parts of the UK".

The ONS said annual house price rises in England were being driven by a 17% year-on-year increase in London, a 6.6% hike in the East and a 6.1% rise in the South East.

It has been warned the housing market has reached "boiling point"

The average house price in London has reached £459,000, while the average price in the UK as a whole now stands at £252,000, slightly down on the £253,000 peak in February.

The 0.5% drop marks the first time property values have fallen month-on-month in just over a year.

However, first-time buyers now face having to pay 10% more than they did a year ago, with the average price of a starter home standing at £193,000 in March, according to ONS figures.

Campbell Robb, chief executive of housing charity Shelter, said: "These figures are yet more proof that our housing market is reaching boiling point.

"With every rise in house prices leaving more people priced out or stuck in cramped homes, rollercoaster house prices are rapidly losing their feel-good factor."

Speaking to Sky News, Mr Carney signalled he is ready to take action to cool the housing market.

He said the Bank could adopt a range of measures, including imposing a new "affordability test" for borrowers and advising the Government to curb the Help to Buy scheme.

Lib Dem Chief Secretary to the Treasury Danny Alexander said: "Help to Buy doesn't change any of those, the qualifying criteria that people need to follow in order to get a mortgage, but what it does do is help to open up the housing market to people who otherwise would be excluded from it.

"I think that's a good policy objective but, of course, if the Bank of England suggest reforms to that we will certainly listen to that in the weeks and months to come."

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Ryanair Profits Slide 8% Amid Falling Fares

Ryanair has seen an 8% drop in full-year net profit, its first decline for five years.

The airline said earnings for the 12 months to the end of March were €523m (£425m), down from €569m (£465m) a year earlier.

The company had previously warned of its full-year profit forecast, saying intense competition and falling fares in the sector was to blame.

The no-frills airline said it expected a boost in revenue from the coming summer market.

In early trades shares in its key competitor easyJet were up, so too were shares in the owner of British Airways, IAG.

Chief executive Michael O'Leary said: "While disappointing that profits fell 8% to €523m due mainly to a 4% decline in fares, weaker sterling, and higher fuel costs, we reacted quickly to this weaker environment last September by lowering fares and improving our customer experience which caused H2 traffic to grow 4% as load factors rose 1%."

It saw a 17% rise in "ancillary revenue" on costs associated with non-seat items, such as food and drink.

After a series of complaints against Ryanair, the firm amended its ancillary pricing structures last year, including the introduction of allocated seating and a reduction in some baggage charges.

A quarter of its revenue now comes from ancillary charges.

It also expects to carry 84.6 million passengers this financial year, up 4%, amid a forecast 2% rise in fares.

Ryanair remains "very cautious" about the second half of the year, after the lucrative summer trading period ends.

It expects to boost passenger capacity by 6% in the H2 period.

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AstraZeneca Rejects Pfizer's 'Final Offer'

AstraZeneca Rejects Pfizer: Full Statement

Updated: 8:09am UK, Monday 19 May 2014

The Board of AstraZeneca PLC ("AstraZeneca" or the "Company") notes the announcement by Pfizer Inc. ("Pfizer") of its final proposal (the "Final Proposal"), comprising £24.76 in cash (45%) and 1.747 Pfizer shares (55%) per AstraZeneca share, representing a value of £55.00 per AstraZeneca share (based on the closing price of Pfizer shares on 16 May 2014).

This proposal undervalues the Company and its attractive prospects and has been rejected by the Board of AstraZeneca.

Leif Johansson, Chairman of AstraZeneca said: "Pascal Soriot, Marc Dunoyer and I had a lengthy discussion with Pfizer over the weekend about the proposal Pfizer made on Friday evening at a value of £53.50 per share.

"During this discussion, Pfizer said that it could consider only minor improvements in the financial terms of the Friday Proposal. In response, we indicated, even assuming that other key aspects of any proposal had been satisfactory, that the price at which the Board of AstraZeneca would be prepared to provide a recommendation would have to be more than 10% above the level contained in Pfizer's Friday Proposal.

"The Final Proposal is a minor improvement which continues to fall short of the Board's view of value and has been rejected."

"Pfizer's approach throughout its pursuit of AstraZeneca appears to have been fundamentally driven by the corporate financial benefits to its shareholders of cost savings and tax minimisation.

"From our first meeting in January to our latest discussion yesterday, and in the numerous phone calls in between, Pfizer has failed to make a compelling strategic, business or value case.

"The Board is firm in its conviction as to the appropriate terms to recommend to shareholders."

"AstraZeneca has created a culture of innovation, with science at the heart of its operations, which will continue to create significant value for patients, shareholders and all stakeholders of AstraZeneca."

"As an independent company, the entire value of AstraZeneca's pipeline will accrue to our shareholders. Under Pfizer's Final Proposal, this value would be significantly diluted."

"We have rejected Pfizer's Final Proposal because it is inadequate and would present significant risks for shareholders, while also having serious consequences for the Company, our employees and the life-sciences sector in the UK, Sweden and the US."

Background

After the close of business on 16 May 2014, the Board received a letter containing a revised non-binding proposal from Pfizer comprising £21.57 in cash (40%) and 1.845 Pfizer shares (60%) per AstraZeneca share, representing a value of £53.50 per AstraZeneca share (based on the closing price of Pfizer shares on 16 May 2014) (the "Friday Proposal").

Pfizer's letter did not provide detail about other key aspects of its proposal, several of which are of importance to the Board's evaluation.

The Board of AstraZeneca met on 17 May 2014 and concluded that the financial terms of the Friday Proposal substantially undervalued the Company and its attractive prospects. Accordingly, the Friday Proposal was rejected.

The Board wrote to Pfizer on the evening of 17 May 2014 to confirm that the Board had rejected the Friday Proposal.

The Board offered to hold a meeting with Pfizer to explain its views around the substantial shortfall in value of the Friday Proposal.

The Board also offered Pfizer the opportunity to explain the key aspects of its proposal that were not described in Pfizer's letter, in particular four points central to the Board's concerns relating to value for AstraZeneca's shareholders. These are:

· The business operating model and segmentation which would allow AstraZeneca to deliver on its research and development pipeline and prospects; and which would protect and preserve its culture of science and innovation, especially given the likelihood of material cost savings and research and development reductions;

· The details of Pfizer's plans for cost savings, including around research and development, pipeline delivery and employment;

· Transaction execution risks, in particular Pfizer's proposed tax inversion and regulatory clearances; and

· Pfizer's plans for protecting the certainty of delivery of the value of any offer at closing.

Pfizer requested that this meeting be held by conference call. This conference call, between Leif Johansson (Chairman), Pascal Soriot (Chief Executive Officer) and Marc Dunoyer (Chief Financial Officer) of AstraZeneca and Ian Read (Chairman and CEO) and Frank D'Amelio (Chief Financial Officer) of Pfizer, took place on the afternoon of 18 May 2014.

The Chairman of Pfizer said that Pfizer could consider only minor improvements to the financial terms of the Friday Proposal.

The Chairman of AstraZeneca responded that, even if the other key aspects of the Friday Proposal had been satisfactory, the price at which the Board of AstraZeneca would be prepared to provide a recommendation would have to be more than 10% above the level contained in Pfizer's Friday Proposal. Pfizer stated that its Friday Proposal was final and would not be amended.

As a consequence the discussion ended.

The Board of AstraZeneca met on 18 May 2014 after this telephone discussion and reconfirmed its rejection of Pfizer's Friday Proposal.

A few hours later, without prior notice to AstraZeneca and contrary to its previous statement, Pfizer announced its Final Proposal to the market. The Board of AstraZeneca met again and rejected Pfizer's Final Proposal for reasons set out below.

The Board believes Pfizer's proposals fail to recognise the transformation of AstraZeneca and its attractive long term prospects as an independent science-led company

As set out in the presentation to shareholders on 6 May 2014:

· AstraZeneca has a growing and accelerating late stage pipeline, with aggregate risk-adjusted pipeline peak year sales potential of around $23 billion and non risk-adjusted pipeline peak year sales potential of around $63 billion;

· AstraZeneca's five key growth platforms are sustaining near-term growth, AstraZeneca remains confident that 2017 revenues should be broadly in line with 2013;

· AstraZeneca is targeting strong and consistent revenue growth from 2017, leading to annual revenues of greater than $45 billion by 2023; and

· AstraZeneca's core earnings growth is expected to be in excess of revenue growth during the period from 2017 to 2023 as a result of operating leverage.

AstraZeneca has excellent momentum in the delivery of its clearly defined strategy, underpinning the Board's confidence in long term revenue targets and profitability

AstraZeneca continues to demonstrate strong momentum across all elements of its strategy, as evidenced by multiple recent significant pipeline developments in its core therapy areas.

These pipeline developments, announced in 2014 after completion of the Company's 2013 Long Range Plan, underpin the Board's confidence in AstraZeneca's revenue targets due to increased probabilities of success for key oncology and other specialty franchise pipeline assets.

As a result, AstraZeneca's margins are expected to benefit from this improved revenue mix.

Given that AstraZeneca is at a point of inflection, the Board believes that selling AstraZeneca at the final price proposed by Pfizer would deprive shareholders of the value from potential future pipeline success.

Accordingly, the Board believes short term metrics, including premia over historical share prices, as referenced by Pfizer regarding the attractiveness of its proposals are not appropriate bases for assessing the value of AstraZeneca.

Pfizer's Proposals and Business Model Bring Uncertainty and Risk

The majority of the consideration is in Pfizer shares which many AstraZeneca shareholders will be forced to sell. Further, for those AstraZeneca shareholders able to hold Pfizer shares, the Board believes Pfizer's proposals would materially alter the investment case and create risks and uncertainties.

In particular the Board believes:

· Pfizer's proposals are predicated on the delivery of significant cost reductions and imply a meaningful reduction in research and development potential and capabilities;

· The associated integration would risk significant disruption to the delivery and value of AstraZeneca's pipeline;

· Pfizer's previous large scale acquisitions have highlighted the challenges around the negative impact of integration on research and development productivity and output; and

· Pfizer's announced business segmentation, if it were applied to AstraZeneca's business, would likely lead to value destruction.

In the context of the above, AstraZeneca notes the recent decline in Pfizer's share price, which has fallen by 5.3% since the release of Pfizer's Q1 2014 results.

The tax-driven inversion structure remains a key part of Pfizer's proposals. The inversion structure has already been the subject of intense public and governmental scrutiny, particularly in the US, as a result of Pfizer's possible offer for AstraZeneca. The Board believes this structure brings increased uncertainty as regards the delivery of value for AstraZeneca shareholders.

Rejection of the Final Proposal

The Board believes that Pfizer's Final Proposal, in relation to price, form of consideration and the four particular points that are central to the Board's concerns around value, remains inadequate. Accordingly, the Board has rejected the Final Proposal.

This statement is being made by AstraZeneca without prior agreement or approval of Pfizer.

There can be no certainty that an offer will be made nor as to the terms on which any offer might be made. Shareholders are strongly advised to take no action. 

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