Business Blog

22 April 2013 Last updated at 04:04 ET

Online betting exchange Betfair has rejected a £912m takeover approach from CVC Capital Partners and other investors.

Betfair said it had received a preliminary bid proposal last week offering 880 pence per share in cash or investments in a new entity.

But the offer "fundamentally undervalues" the company, said Betfair.

Chairman Gerald Corbett said that the company had a "unique business" that "this proposal fails to recognise".

Betfair said it had received the proposal on Friday from CVC together with investors Richard Koch, Antony Ball and partners.

Earlier this month, CVC said it had held preliminary discussions with the investors about a takeover approach.

Mr Koch, a co-founder of LEK Consulting, holds a 6.5% stake in Betfair. Mr Ball is a non-executive director at Luxembourg-listed investment group Brait.

Their preliminary proposal offered 880 pence per share in cash or an "unlisted securities alternative made up of shares and loan notes in a new entity".

But Mr Corbett said: "We have a unique business with a market position, profitability, cash flow and prospects that this proposal fails to recognise."

Betfair's exchange processes more than seven million transactions a day.

Shares in Betfair, which rose 15% last week, closed at 805 pence on Friday.

22 April 2013 Last updated at 02:59 ET

Boeing has started replacing batteries on some of its grounded 787 Dreamliner fleet, moving a step closer to getting the planes flying again.

It comes after US aircraft regulators approved a revamped battery design.

Problems with the plane's battery had resulted in the entire fleet of the 787s being grounded and deliveries of the aircraft being halted.

Japan's All Nippon Airways and Japan Airlines are among the first carriers that will have the batteries replaced.

All Nippon Airways (ANA) and Japan Airlines (JAL) are the two biggest operators of the 787 Dreamliner.

"We began the work as we have received instructions from Boeing following the Federal Aviation Administration (FAA) approval," a spokesman for JAL said.

"But we have not decided on the timing of the 787 flight resumption."

Ryosei Nomura, a spokesman for ANA, said that the technicians had started installing new batteries on five of its 17 Dreamliner aircraft.

The carriers still have to wait for approval from various regulators before they can start to fly the planes commercially.

Further approval

The FAA, which approved the battery design last week, has said that it will issue a final directive on the Dreamliner this week.

Other international regulators are likely to follow. but it may still be a couple of weeks before flights resume.

The plane is the first in the world to use the lithium-ion batteries, which are lighter, hold more power and recharge more quickly.

But after incidents in which some of the batteries emitted smoke, all of the 50 Boeing 787 planes in service were grounded in mid-January.

The problems sparked a battery fire on a parked JAL 787 at Boston's Logan International Airport and another incident in which battery smoke forced an emergency landing of an ANA 787 in Japan.

The grounding has cost Boeing an estimated $600m (£393m).

Japanese carrier ANA lost some 1.4bn yen ($15m; £9.5m) in revenue through January's disruption alone.

22 April 2013 Last updated at 03:49 ET

Philips, the world's biggest lighting maker, has reported a 38% jump in first quarter LED sales from a year earlier.

The pricey but long-life and energy-efficient bulbs now represent 23% of its lighting sales.

The Dutch healthcare and consumer appliances group said it made 162m euros ($211m; £139m) in the first three months of the year.

Appliances sales were up 10% from a year earlier, but other parts of the business were stagnant.

"We reiterate our view of a slow first half of 2013 due to adverse market trends, especially in Europe and the US," said chief executive Frans van Houten, who insisted that the firm was nonetheless on course to hit its targets for the year.

Healthcare sales fell at an underlying rate of 1% from a year earlier, while overall lighting sales were flat due to weak demand from the construction sector.

One of the parts of the business to do better was its home entertainment division, as losses on its TV sales declined, pushing the unit back into an 8m-euro profit. Philips agreed in January to sell that division to Japan's Funai Electric for 150m euros.

The company wants to focus on its healthcare, light bulbs and home appliances businesses as part of its "Accelerate!" restructuring plan.

The group's profit for the quarter somewhat beat market expectations, and represents a rebound from a sizeable loss in the previous three-month period.

However, income from its continuing operations - excluding its home entertainment division - was down about a quarter from the same period a year earlier.

Philips is looking to boost growth by increasing innovation. On Saturday, the firm announced a new partnership with Swedish medical group Elekta and the Netherlands Cancer Institute to develop new MRI scanners that can be used to guide targeted radiotherapy.

Earlier this month, Philips' lighting division unveiled a prototype LED strip light that would be twice as energy efficient as existing fluorescent lighting used in offices.

22 April 2013 Last updated at 07:12 ET

New proposals to help pub tenants struggling to pay rent or beer prices have been unveiled by the government.

They include a new code of practice and the backing of a "powerful" adjudicator after complaints about abuse of the "beer tie".

So-called "tied pubs" are required to buy supplies - often at high prices - from pub companies that own the pubs.

Half of the "tied pubs" in the UK earn less than £15,000 a year, said Consumer Minister Jo Swinson.

The Department for Business, Innovation and Skills said it hoped that the new proposals would help to save tenants £100m a year.

The code will apply to companies that own more than 500 pubs, to focus on an area of the industry where 90% of complaints are received, it said.

The adjudicator would have the power to enforce the code, investigate breaches and deal with disputes through possible sanctions and fines. The new proposals may also allow tied pubs to have independently picked guest beers.

Pubs under pressure

Business Secretary Vince Cable said: "We gave pub companies every chance to get their house in order. But despite four select committee reports over almost a decade highlighting the problems faced by publicans, it is clear the voluntary approach isn't working."

"Pubs are small businesses under a great deal of pressure, many of which have had to close. Much of that pressure has come from the powerful pub companies and our plans are designed to rebalance this relationship," he said.

Jo Swinson said the government was "committed to stamping out abuse of the beer tie and helping British pubs to thrive".

"It has been a huge concern of mine that pubs, often the hub of our communities, are closing down at an alarming rate. What is also shocking is that the figures show that almost half of tied pubs earn less than £15,000 a year, and struggle to make ends meet because of rising beer prices and rent.

"I have heard about a variety of unfair practices such as large unjustified increases in rent, and am clear that this sort of behaviour is not good enough.

"These proposals will put a fairer system in place and will make sure that tied pubs are no worse off than free-of-tie pubs," she added.

Pubs 'quango'

Dave Mountford, a branch secretary for GMB, the union for tied tenants, said: "The test for tied tenants is whether this code is drafted in such a way that it will bring down rents to the same level as free-of-tie pubs."

"GMB want to ensure that pub [chains] are not allowed to put up rents by the backdoor by overcharging for products tenants are tied to buy from them."

A spokesman for Punch Taverns, the largest bar and pub operator in the UK, said: "We will be looking at the contents of today's announcement in detail, but we remain confused by the government's attitude to pubs.

"This year's Budget provided much-needed support to Britain's pubs, but the government is now proposing a state-backed pubs quango.

"A founding commitment of the Coalition was to reduce regulation, but ministers now seem intent on wrapping Britain's pubs in red tape."

22 April 2013 Last updated at 05:21 ET

Google's executive chairman, Eric Schmidt, has defended his company paying just £6m in UK corporation tax.

His comments came after a committee of MPs last year denounced multinationals - including Google - who pay little tax on their UK earnings, as "immoral".

In an interview to be broadcast on The World at One on BBC Radio 4, Mr Schmidt said his firm invested heavily in the UK and its services boost the economy.

He conceded that "Britain has been a very good market for us".

"We empower literally billions of pounds of start-ups through our advertising network and so forth," he said.

"And we're a key part of the electronic commerce expansion of Britain, which is driving a lot of economic growth for the country."

He added that Google's behaviour reflected the way all big international companies manage their taxes.

"The same is true for British firms operating in the US, for example," he said.

"I think the most important thing to say about our taxes is that we fully comply with the law and we'll obviously, should the law change, we'll comply with that as well."

Chancellor George Osborne, along with leaders in France and Germany, have called for international action to tackle so-called "profit shifting" by multinational companies to avoid taxes.

North Korean trip

Mr Schmidt also spoke about his well publicised trip to North Korea in January, saying his aim had been to plant a "seed" in the minds of government officials that letting the internet into the reclusive state would be necessary to having a "proper country."

"North Korea is by far the most isolated country on earth," he said.

"There's essentially no internet access. There are roughly a million mobile phones, but they don't even have the basic capability of browsing.

"So the average North Korean person is completely cut off from any of the kinds of conversations or knowledge that's going on globally. It's by far the worst such [country]."

But Mr Schmidt could not gauge the North Koreans' response.

"One of the characteristics of the North Koreans is that you can't tell what they're going to do because they don't actually acknowledge what you say," said Mr Schmidt.

He said officials listened to his speech, but that "they don't really answer you".

"The fact of the matter is the North Korean government is particularly good at PR about themselves. And if you look at the PR and essentially the spin and the stuff they say, it's bizarre."

22 April 2013 Last updated at 07:32 ET

The UK government is preparing to sell its one-third stake in Urenco, the world's second-largest provider of nuclear fuel.

The uranium enrichment company is estimated to be worth about 10bn euros ($13bn; £8.6bn).

Business and Energy Minister Michael Fallon said the "time is right" for the sale, adding it made "good commercial sense".

Several buyers are said to be interested in buying the stake.

They include French nuclear group Areva, the Canada Pension Plan Investment Board, and reactor builder Westinghouse.

The remainder of Urenco is owned by the government of the Netherlands, as well as by the German power companies E.On and RWE.

"The decision to proceed towards a sale comes after the government secured agreement from its Dutch and German partners," the UK's Department for Business, Innovation and Skills said.

As yet, no decisions have been taken with regards to how or when the sale will happen.

"Any sale will only be concluded if the government is satisfied that the UK's security and non-proliferation interests can be protected and that value for money is achieved for the UK taxpayer," the department said.

As Urenco owns top secret uranium enrichment centrifuge technology, which the authorities are eager to protect from falling into the wrong hands, all three countries would need to approve any sale of a stake.