Manchester City Facing £50m Fine From Uefa

By Paul Kelso, Sky News Sports Correspondent

Manchester City face a £50m fine and having to limit their Champions League squad to just 21 players next season, instead of the normal 25, after breaching Uefa Financial Fair Play (FFP) rules, Sky News understands.

Under sanctions which the club are contesting, City will also have to cap their spending on Champions League players so spending does not exceed this year's total.

The reduction in the size of the Champions League squad to 21 could hit City hardest, as they will have to continue selecting eight "home-grown" players in the squad.

City are contesting the Uefa sanction, but if they do not agree to the sanctions, set out in an initial "settlement offer", they face even stiffer penalties.

Manchester City's Joe Hart makes a save at Saturday's match against Everton

Final confirmation of the sanctions is expected on Friday, two days before City's title-deciding game against West Ham at the Etihad.

Under the FFP rules, clubs are not permitted to lose more than £37m over two seasons unless they can show that losses have been incurred by investments in club infrastructure, including youth development, academies and stadium development.

In the two seasons tested by Uefa 2011-12 and 2012-13, City's combined losses were almost £150m, with losses of almost £200m in 2010-2011.

While some of those losses can be legitimately written off - for example City are building a £100m playing campus next to the Etihad Stadium - Uefa have concluded not all of their losses are legitimate under the terms of FFP.

Manager Pellegrini gesticulates during the Barclays Premier League match

Uefa also examine sources of revenue, which cannot be from "related parties" if they are to count as income for FFP accounting purposes. City's £40m-a-year shirt and stadium sponsorship deal with Etihad, the Abu Dhabi state airline, has been scrutinised, though City says it was done at a fair market rate.

It is understood Uefa found some of City's accounting in their original submission to be less transparent than expected, which has prompted a closer look at all the figures.

City have been on collision course with Uefa over FFP ever since the club's Abu Dhabi owners embarked on an unprecedented spending spree after buying the club in August 2008.

Since then, they have spent more than £600m on transfer fees, winning the FA Cup in 2011, the Premier League in 2012 and the League Cup this season. They require just four points from their remaining two games to be almost certain of winning the league this year.

Paris St Germain, backed by Qatari wealth, have also fallen foul of the FFP rules and face similar sanctions.

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UK House Price Warning Issued By Think-Tank

George Osborne believes the UK "should be vigilant" about the housing market amid warnings action may be needed to prevent it over-heating.

But the Chancellor said the Government had given the Bank of England "the powers, the tools" to deal with this.

It came as the Organisation for Economic Co-operation and Development (OECD) upgraded its growth forecast for the UK to 3.2% this year.

The Bank of England has the "tools" to deal with the housing market

The think-tank revised its estimate from 2.4% last November, saying it believed the recovery had now "taken hold".

But it cautioned consumer spending remained the main driver of growth, and urged the Government to consider measures to ensure "balanced" house price rises.

Globally, the body reduced its 2014 growth forecast from 3.6% to 3.4%, with the US and China downgraded to 2.6% and 7.4% respectively.

OECD secretary-general Angel Gurria said: "We are still not out of the woods yet."

Mistakes of the last government have been learned, insists Mr Osborne

The OECD said the recovery in the UK had "taken hold" and growth was now "robust", although it noted that consumer spending was still the main driver.

Its report said: "Policy interest rates are expected to begin to rise in 2015 as economic slack narrows and inflation pressures gradually build up.

"Further prudential regulation measures should be considered to ensure a balanced housing market recovery."

The Treasury has been criticised over the Help to Buy scheme underwriting home loans for people without large deposits, amid strong price growth - particularly in London and the South East.

Pressed over whether he felt the scheme should be curbed, Mr Osborne replied: "I've said we should be vigilant about the housing market and this Government has given the Bank of England the powers, the tools, to do that in an independent way.

"That didn't exist before, but we've learnt from the mistakes of the last government and the Bank of England has the tools and independence to do what it feels it needs to do to help to contribute to building that resilient economy."

On the revised growth forecast, Mr Osborne, attending a meeting of EU finance ministers in Brussels, said: "These forecasts from international bodies, the OECD, the rest of the European Union, are a real vote of confidence in the UK's long-term economic plan."

In a Twitter post Prime Minister David Cameron said the revision was a "sign our #LongTermEconomicPlan is working, meaning security #ForHardworkingPeople".

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Balfour Beatty Boss Quits On Profit Warning

The boss of infrastructure firm Balfour Beatty has resigned amid a profit warning that centred on the performance of its UK construction business.

Andrew McNaughton quit with immediate effect after a £30m shortfall was discovered in the UK operation - blamed on significant operational issues in its mechanical and electrical engineering businesses.

The statement - brought forward from a planned trading statement due next week - also cited delays in some of its major building projects.

As a result of the problems, the company said it now expected overall pre-tax profits for 2014 to be in the range of £145m to £160m.

The developments sparked a 16% fall in its share price in early trading on Tuesday.

Balfour, which operates in over 80 countries employing over 40,000 people, said it had conducted a strategic review and was looking into the possible sale of its engineering consultancy business, Parsons Brinckerhoff.

Steve Marshall, Balfour Beatty's non-executive chairman, has taken over as Group executive chairman until a successor to Mr McNaughton is appointed.

Mr Marshall said: "Andrew has served the Group for the last 17 years in a wide variety of roles. I would like to thank Andrew personally and on behalf of the Board for his major contribution.

"We wish him well for the future."

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Microsoft Plays Down Xbox 'Sell-Off' Talk

Microsoft has played down comments by Bill Gates in which he said he would "absolutely" support the firm's CEO if he wanted to spin off the Xbox division.

In an interview with Fox Business the company's co-founder initially said selling off the Xbox arm would not be an "obvious" move.

Gates at the Xbox 360 launch in 2005

He said: "I'm sure Satya and the team will look at that. It's up to them. We're going to have an overall gaming strategy so it's not as obvious as you might think."

But when pressed on whether he would support CEO Satya Nadella if he decided to do so he replied "absolutely".

That prompted a statement from the company in which it said Gates' comments were simply "reflective" of his support for Mr Nadella.

Communications chief Frank Shaw told Eurogamer: "As Mr Gates noted, Microsoft is committed to gaming across multiple platforms with Xbox as the centrepiece of our gaming strategy.

"We remain committed to Xbox and the millions of Xbox fans around the world."

Questions have lingered over Xbox's future since November last year when CEO candidate Stephen Elop was reported to be considering selling the Xbox division.

Satya Nadella and Stephen Elop

In the latest round of the console wars, Sony's PlayStation 4 has surged ahead of the Xbox One - with figures in late April showing a gap of at least two million sales.

However Xbox recently announced a planned launch in China after a 14-year-old ban on consoles was lifted.

It becomes the first foreign firm to announce the sale of a console since the ban was rescinded in January, and could give it a temporary sales edge.

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Ahrendts Secures £40m Apple 'Golden Hello'

Former Burberry chief executive Angela Ahrendts has been handed a £40m so-called 'golden hello' from her new employer, Apple.

A regulatory filing shows the 53-year old American was awarded more than 113,300 shares - currently worth $68.1m - on joining the company.

The awards - which are staggered but will fully vest over a period of four years - are conditional on her remaining with Apple.

Details of her wider remuneration were not disclosed.

She joined the iPhone and iPad maker on May 1 as its head of retail - seven months after her appointment to run Apple's store network and online store was first announced.

She was replaced at Burberry by chief creative officer Christopher Bailey, who has adopted both roles.

Ahrendts, who was credited with leading Burberry's evolution to a luxury global brand, is reported to have taken home £16m as part of a leaving settlement following completion of her notice period.

She said at the time her new role at Apple was announced:  "I have always admired the innovation and impact Apple products and services have on people's lives and hope in some small way I can help contribute to the company's continued success and leadership in changing the world."

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Refusing Zero-Hours Contracts Risks Benefits

Job hunters face losing their benefits if they refuse to take certain zero-hours contracts under the Government's welfare shake-up.

Claimants failing to take up such jobs without good reason risk having their payments docked for more than three months.

Under the casual contracts, people may not know if they have work from one week to the next.

Employment Minister Esther McVey outlined the change in a letter to Labour MP Sheila Gilmore about benefit sanctions, reports The Guardian.

Jobseekers turning down casual contracts risk losing their benefit

Jobcentre "coaches" will be able to "mandate to zero-hours contracts" if they think the role is suitable for a claimant.

Labour leader Ed Miliband has pledged to change what he branded the "worst abuses" of zero-hour contracts.

Recent research showed about 1.4 million jobs involve contracts that do not guarantee a minimum number of hours.

A study among employers showed 13% used non-guaranteed hours contracts, rising to almost half in the tourism, catering and food sectors.

Their growth has prompted trade unions to warn of a "growing sub class" of insecure, low-paid employees.

A Department for Work and Pensions spokesman said: "With Universal Credit, claimants will not be required to sign up to exclusive zero hours contracts.

"As now, if there's a good reason someone can't just take a particular job they won't be sanctioned.

"But it is right that people do everything they can to find work and that we support them to build up their working hours and earnings.

"The average zero hours contract provides workers with 25 hours of work a week - and can lead to long-term opportunities.

"Universal Credit payments will adjust automatically, depending on the hours a person works, to ensure that people whose hours may change are financially supported and do not face the hassle and bureaucracy of switching their benefit claims."

Labour's Shadow Work and Pensions Secretary Rachel Reeves said: "The huge increase in zero-hours contracts under the Tory-led Government is another sign of their failure to tackle the cost-of-living crisis and deliver a recovery that works for everyone."

TUC general secretary Frances O'Grady said: "Forcing people into uncertain employment is not the answer to unemployment and may restrict the ability of claimants to seek secure, permanent work.

"We know that for many workers zero-hours contracts mean zero job security, poor pay and no way of knowing what they'll be earning from one day to the next."

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Antivirus Is 'Dead' Says Norton Software Boss

Antivirus software is "dead" according to an executive at the firm that pioneered it.

Symantec, which developed software to protect computers from hackers 25 years ago, says it no longer thinks of antivirus as a "moneymaker in any way".

Brian Dye, senior vice president for information security, said software only catches around 45% of malware attacks because hackers are increasingly sophisticated.

He said the company is now moving its business towards "detecting and responding" to attacks, rather than simply trying to protect against them.

Mr Dye, who has been at the firm for a decade, admitted to the Wall Street Journal the company has slipped behind rivals, but said it was trying to catch up.

"It's one thing to sit there and get frustrated," he said.

"It's another thing to act on it, go get your act together and go play the game you should have been playing in the first place."

The company, which sells the Norton antivirus suite of software, has a turnover of around $1.6bn (£590m) and has an 8% share of the global antivirus market.

Revenue has fallen in each of the past two quarters, although profits have risen because of cost-cutting measures.

Antivirus still accounts for 40% of the company's revenue.

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Barclays Investment Bank Drags On Profits

Barclays has reported a 5% fall in adjusted pre-tax profits for its first quarter, dragged down by a 28% drop in income at its investment bank.

It confirmed profits of almost £1.7bn as its Fixed Income, Currencies and Commodities (FICC) operation, contained within the investment bank, delivered a 41% fall in income on the same period last year.

The bank blamed the decline on subdued client activity and changes to its business mix - reforms that are due to be announced on Thursday when the results of a strategic review are made public.

The review of the investment operation could include thousands of job losses and the creation of an internal 'bad bank'.

However, in its results statement on Tuesday the bank said its retail, cards and corporate banking franchises all generated higher returns in the last quarter while operating expenses fell to their lowest level since 2009.

Group chief executive Antony Jenkins said "a continued strong momentum" in those areas was offset by a "significant decline" in FICC income.

"As previously announced, I will update the market on Barclays strategy to deliver improved and sustainable returns and growth for our shareholders on May 8", he said.

"This plan will address issues underlying the performance challenges we have recently experienced, including positioning the investment bank for the new operating and regulatory environment." 

The bank's share price fell almost 4% when the FTSE 100 opened for business on Tuesday morning.

Barclays did not make any new provisions for compensating customers who were mis-sold payment protection insurance (PPI) - saying its pot of money set aside for redress stood at £689m and overall complaint volumes had fallen.

Earlier this year, Barclays announced a 32% fall in annual profits to £5.2bn but stoked controversy by raising its bonus pool by 10% to £2.38bn.

The bank - like many of its UK competitors - has argued it has had to pay to retain staff that are crucial to future shareholder value.

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Carphone And Dixons Set To Unveil £4bn Merger

By Mark Kleinman, City Editor

Carphone Warehouse and Dixons Retail are poised to set the seal on a £3.7bn merger of equals that will create one of Britain's biggest high street groups.

Sky News has learnt that the two companies will make a statement to outline concrete details of their tie-up before a Takeover Panel deadline on May 19.

The terms of the merger, which will see the creation of a new mobile phone and electrical goods retailer likely to be known as Dixons Carphone Group plc, have been broadly agreed in recent days, according to people close to the discussions.

The final name has not yet been formally agreed by the two companies' boards, they added.

The transaction will be structured as a 50-50 merger of equals, which will ignore the fact that Carphone's market capitalisation has been marginally higher than that of Dixons since preliminary discussions were confirmed in February, they said.

Sir Charles Dunstone, the Carphone co-founder, is to be chairman of the combined group, with Dixons occupying the top two executive roles in the form of Sebastian James, chief executive, and Humphrey Singer, chief financial officer.

Andrew Harrison, Carphone's chief executive, will become deputy chief executive, while Roger Taylor, deputy chairman of Carphone, and John Allan, the Dixons Retail chairman, will be named deputy chairmen of the new company.

Some of the existing non-executives on the boards of Carphone and Dixons are set to miss out on roles at the combined group and will be informed in the coming days.

The opportunity for cost savings from a merger will be restricted by the limited overlap between the two retailers' product bases but an insider conceded today that there would be "some" head office job cuts resulting from the merger.

A source close to the deal added that the newly-merged company might identify a new head office location rather than moving to either Carphone or Dixons' existing base.

The new group will have a powerful place on UK high streets, with Dixons currently operating more than 500 stores and Carphone almost 800.

The rationale for the new business will be its ability to serve consumers in the "connected world" with mobile devices and electrical goods increasingly converging.

News that the merger talks are so close to resulting in a formal deal may end any lingering hopes of Dixons' rival, Phones4U of scuppering the deal.

Sky News disclosed in March that BC Partners, Phones4U's owner, was attempting to gatecrash the merger in order to protect its existing mobile phone retailing joint venture with Dixons.

Carphone and Dixons declined to comment.

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Jobs 'Sole Interest' In Pfizer Takeover Move

A View From The City: Market Forces Must Decide Pharma Fate

Updated: 10:49am UK, Tuesday 06 May 2014

By Savvas Neophytou & David Buik, Panmure Gordon

Panmure Gordon's senior pharmaceutical analyst Savvas Neophytou and its market commentator David Buik write on the issues surrounding Pfizer's sight for AstraZeneca:

In recent weeks the pharmaceutical sector has been the subject of potentially frenzied 'M&A' activity.

Not just Pfizer and AstraZeneca. Glaxo, Novartis, Shire, Allergan, Sanofi-Aventis and Johnson & Johnson have also been in the melting pot.

A drug company's pipeline is a key component of its valuation, as once the patent runs out, that drug only has generic value.

Astra's CEO Pascal Soirot believes Pfizer has greatly under-valued Astra's pipeline and all the encouraging scientific developments associated with its Cambridge operation and Pfizer is more than aware of the added value as well as the tax advantages with a presence in the UK.

Pfizer's CEO Ian Reid has been plainly told by Astra's board that the £50 a share offer, valuing the company at about £60bn, with a 32% cash component, is wholly inadequate, despite the fact Astra shares have leapt from £35 since January, when Astra was first approached, to £48 last Friday.

Pfizer's profits, posted yesterday, were down 15%; so to tempt Astra to come to the negotiating table it may cost the US drug titan £55 a share.

Pfizer does enjoy the luxury of a $70bn cash surplus. At present Pfizer is best known for Viagra and Lipitor and Astra for Crestor, Prilosec and Nexium. However it is in the arenas of oncology, other cancer drugs and vaccinations, that Astra provides a superb platform for expansion and added value.

One fears that political interference waits in the wings.

Free enterprise, the bastion for the creation of democracy, wealth and therefore employment, is fast disappearing, there being far too much protectionism in so many parts of Europe, with France and Germany the main protagonists.

Both countries have been wilful in refusing to allow the takeover of a company by an international predator. Not only does this fact make Europe an increasingly less attractive place to rely on for business reciprocity, but also if the free enterprise system is not allowed to flourish, international trade could become adversely affected.

In recent years the following companies have fallen in to overseas hands or those of private equity -  Boots, British Airports Authority, Blue Circle, Corus, Laporte, ICI, Hanson Trust, Mercury Asset, 02, Rowntree's, Scottish & Newcastle, Abbey National and Cadbury's.

Apart from Corus, through natural wastage and some economy of the truth when Kraft bought Cadbury's, these acquisitions have created wealth and jobs, thus beneficial to the UK economy.

There really is some unnecessary froth being churned up by the prospect of an overseas takeover. If it makes good business sense then let market forces charge what the traffic will bear.

We suspect Pfizer employees are likely to suffer more than the 7000 employed by AstraZeneca in this country.

There could be cost savings of £2/3bn.

If the world is going to be a healthier place as a result of this merger of pharmaceutical titans, then as Leslie Crowther said all those years ago 'Come on down if the price is right!'

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