...the main business headlines..........
US bail-out accord reached
A tentative deal on the $700bn US rescue plan was reached late last night, after many hours of fraught negotiations, reported the Times. The verbal deal will be put before the House of Representatives for a vote today after a series of long and complex talks at the end of which US Treasury Secretary Hank Paulson finally managed to persuade Republicans and Democrats to accept a compromise deal. It will give the Treasury $350bn immediately to spend on mortgage-related assets, with the second $350bn having to be approved by Congress.
AIG rescue and the Goldman connection 
Welcome to Wall Street’s cash machine
Bradford & Bingley nationalised
The government has confirmed the nationalisation of Bradford & Bingley, its second recent nationalisation. A run on the bank in recent days forced the government’s hand, with it inviting bids for the bank’s £21bn deposit base and branch network over the weekend. After 12 hours of talks Banco Santander agreed to buy the group’s nearly 350 outlets as well as its deposits for around £600m, in a deal which will see the owner of Abbey and Alliance & Leicester increase its branches to 1200 and deposits to £87bn. The government has taken control of £50bn in mortgages and loans and shares in the company have been suspended.
Northern Rock: memories of Rolls Royce
Northern Rock: the madness of crowds
Asian shares fall for fifth day
Shares in Asia fell for a fifth day in a row on doubts whether the US bail-out plan will prevent further financial turmoil, reported the Daily Telegraph. The initial agreement in Congress initially led to shareprice rises across the region but the rally “soon lost steam” and in afternoon trading markets dropped between one and two per cent. Worries grew that the rescue package offers “no guarantee” of an end to the credit crunch, while problems at Fortis led to concerns that the financial crisis is spreading to Europe.
Fortis in three-way rescue
Fortis, the biggest Belgian financial-services company, has been rescued by governments in Begium, Netherlands and Luxembourg. Shares in the company dropped 35 per cent last week on worries over its capital base, eroding investor confidence yet further, before the governments stepped in with their 11.2bn euros rescue. Fortis bought Dutch bank ABN Amro last year in combination with Royal Bank of Scotland and Banco Santander just as the US subprime mortgage market began to unravel, while the collapse of Lehman Brothers fatally raised funding costs.
M&G refuses to sell BE stake to EdF
M&G, which owns five per cent of nuclear power generator British Energy, is refusing to sell its stake to EdF said the Daily Telegraph. The fund manager helped block the initial bid by the French state-owned power company, and argues that the revised offer still “significantly undervalues” British Energy. There have been growing concerns over the role the government has played in the process and the impact on competition of the takeover. The government, with a 35 per cent stake, and nine per cent shareholder Invesco have already agreed to the deal.
CBI forecasts heavy City job losses
Thousands of jobs are set to be lost in the financial industry as it goes through its worst conditions for nearly 20 years said the Times. The CBI’s latest quarterly survey, covering the entire financial sector, reveals “grim findings”, in a period which predates the collapse at Lehman Brothers and the rescue of Merrill Lynch. The overall measure of sentiment for the sector fell again, with 59 per cent of companies reporting that they were more pessimistic than three months earlier. As a result the CBI expects 12,000 financial jobs to be cut in the next quarter.
...in brief..................
Wachovia teeters and Goldman spends on banks
The future of America’s fourth-largest bank, Wachovia, is “in the balance” as attempts to save it falter, reported the Independent. Analysts now believe that potential suitors will wait for the bank to go under before cherry-picking its best assets at “knock-down” prices…………
MFI has just escaped bankruptcy, after a deal on Sunday night which saw the furniture group sold to its management. Gary Favell, the company’s chief executive, has agreed to take over the business from private equity bosses Merchant Equity Partners, owners since 2006…………
Hypo Real Estate has been advanced a multi-billion euro credit line by the German financial sector after emergency weekend talks. It comes on the heels of the rescue of Fortis in Belgium and illustrates the spread of the financial crisis in Europe…………
Marks & Spencer chief Stuart Rose will reveal the extent of the retailer’s current woes on Thursday, when the group releases its first half profits. Analysts believe that food and non-food sales will have fallen by more than 7.5 per cent in the second quarter, leading to a sharp first half loss…………
Stuart Rose: from hero to zero
WPP, the world’s second-biggest advertising group, is set to shift its British headquarters to Dublin. The company is expected to announce that it is moving its tax domicile because of the threat of higher corporation tax, and is following Shire and UBM to Ireland…………
Goldman Sachs is looking to buy up to $50bn of banking assets from problem US banks, as it moves into commercial banking, reported the Financial Times. The company will use its banking subsidiary in Utah as an umbrella for new assets and has already transferred $150bn to the unit…………
AIG rescue and the Goldman connection
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